AU Optronics (AUOTY) AI Stock Analysis

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AU Optronics

(OTC:AUOTY)

Rating:49Neutral

Price Target:

$4.00

▲(4.17%Upside)

AU Optronics' overall score reflects financial struggles with some recovery in revenue. While the earnings call signals a return to profitability, challenges such as tariff uncertainties and high leverage remain significant risks. The technical analysis shows a neutral to bearish trend, and the valuation suggests the stock might be overvalued, limiting its immediate appeal.

AU Optronics (AUOTY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.37B

Dividend Yield4.38%

Average Volume (3M)18.64K

Price to Earnings (P/E)39.5

Beta (1Y)0.44

Revenue Growth10.62%

EPS GrowthN/A

CountryUS

Employees38,635

SectorTechnology

Sector Strength77

IndustryHardware, Equipment & Parts

Share Statistics

EPS (TTM)0.14

Shares Outstanding766,788,100

10 Day Avg. Volume0

30 Day Avg. Volume18,637

Financial Highlights & Ratios

PEG Ratio0.17

Price to Book (P/B)0.91

Price to Sales (P/S)0.00

P/FCF Ratio-69.94

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

AU Optronics Business Overview & Revenue Model

Company DescriptionAUO Corporation researches, develops, produces, and sells thin film transistor liquid crystal displays (TFT-LCDs) and other flat panel displays. It operates through two segments, Display and Energy. The company also designs, manufactures, and sells ingots, solar wafers, and solar modules, as well as provides technical engineering and maintenance services for solar system projects. In addition, it sells and leases content management system and related hardware; plans, designs, and develops construction project for environmental protection and related project management; and designs, manufactures, and sells TFT-LCD modules, TV sets and related parts, backlight modules, automotive parts, and precision plastic parts. Further, the company engages in the design, manufacture, and sale of InGaN epi wafers and chips, and light emitting diode packages and modules; development, manufacturing, and sale of medical equipment; services related to educational activities and site rental; research and development, and IP related business; solar power generation; and sale and sales support of TFTLCD panels. Additionally, it develops and sells software and hardware for health care industry; provides software and hardware integration system and equipment relating to intelligent manufacturing, as well as related consulting services; and investment services. The company operates in the People's Republic of China, Taiwan, Japan, Singapore, and internationally. The company was formerly known as AU Optronics Corp. and changed its name to AUO Corporation in June 2022. AUO Corporation was founded in 1996 and is headquartered in Hsinchu City, Taiwan.

How the Company Makes MoneyAU Optronics generates revenue primarily through the sale of its diverse range of display panels. The company's key revenue streams include the production and sale of LCD panels, which are widely used in consumer electronics such as televisions, computer monitors, and mobile devices. In addition to consumer electronics, AUO also supplies display solutions for industrial, automotive, and medical applications. The company often partners with major electronics manufacturers to supply display components that are integral to their end products. Significant revenue is also derived from the company's innovation in advanced display technologies, such as OLED and other emerging display formats, which cater to the growing demand for high-performance visual solutions. AUO's strategic focus on research and development helps maintain its competitive edge in the rapidly evolving display market, contributing to its financial performance.

AU Optronics Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: -0.52%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Neutral

The earnings call presented a positive financial performance in Q1 with revenue growth and a return to profitability. However, there are significant concerns related to tariff impacts and potential revenue decline in Q2. The company's strong financial structure and advancements in technology are positive, but the uncertainties around tariffs pose challenges.

Q1-2025 Updates

Positive Updates

Revenue Growth and Profitability

Net sales for Q1 were NT$72.1 billion, up by 5% QoQ. The company returned to profitability at the operating level, generating NT$1.1 billion in OP profit, with a net profit attributable to the owner of NT$3.3 billion and an EBITDA margin improved to 12.2%.

Strong Performance in Display and Mobility Solutions

The Display segment benefited from stock replacement and trade-in policy in China. Mobility Solution saw better-than-expected performance due to stronger demand for high-value-added products and subsidies from China.

Advancements in Micro LED Technology

Demonstrated 114-inch Micro LED TV and transparent Micro LED applications at Touch Taiwan. Announced production capabilities and future projects with major automotive OEMs.

Resilient Financial Structure

Maintained a healthy financial structure with a gearing ratio of 34.5% and cash and cash equivalents of NT$67.4 billion.

Negative Updates

Tariff-related Uncertainties

Ongoing uncertainties related to tariffs are expected to disrupt seasonal patterns and impact global consumption and economic growth.

Potential Revenue Decline in Q2

Anticipated revenue decline in Q2 for Mobility Solutions and Display segment due to a higher base period and tariff-related uncertainties.

Debt and Gearing Ratio Increase

Debt increased to NT$122.2 billion, and the gearing ratio rose by 3.3% due to peak employee compensation payments and share buybacks leading to increased borrowings.

Company Guidance

During AU Optronics' 2025 first-quarter financial results conference, the company outlined its guidance and performance metrics for the second quarter. The company's net sales reached NT$72.1 billion, marking a 5% QoQ increase, driven by growth across its three main segments: Display, Mobility Solution, and Vertical Solution. The Display segment, benefiting from stock replacement and trade-in policies in China, is expected to experience a slight revenue decline QoQ in Q2. Conversely, the Vertical Solution segment is anticipated to see revenue growth in the mid-to-high single-digit range, supported by demand recovery and new project volumes. The Mobility Solution segment is projected to post a low single-digit percentage revenue decline due to a higher base period and customer project timelines. On profitability, AUO reported a gross margin improvement to 12.2% and an operating profit of NT$1.1 billion, while the net profit attributable to owners was NT$3.3 billion with an EPS of NT$0.43. The EBITDA margin improved to 12.2%, supported by revenue growth, product mix optimizations, and cost improvements. The company also highlighted its strategic response to tariff uncertainties, emphasizing its global manufacturing footprint and the need for prudent management of CapEx and OpEx to maintain financial stability.

AU Optronics Financial Statement Overview

Summary

AU Optronics is experiencing financial challenges with some recovery signs. Revenue is growing, but profitability is hampered by operational inefficiencies, as reflected in a negative EBIT margin. The balance sheet shows increased leverage, raising financial risk, while cash flow issues persist due to high capital expenditures.

Income Statement

Neutral

AU Optronics has shown a significant decline in profitability over the recent periods, with the Net Profit Margin turning positive to 1.28% in TTM (Trailing-Twelve-Months) from a negative margin in previous years. The Gross Profit Margin for TTM is 10.6%, indicating some improvement from the prior period. However, the negative EBIT Margin of -0.81% suggests challenges in operational efficiency. Revenue has grown by 4.5% compared to the last annual period, which is a positive sign of top-line recovery.

Balance Sheet

Neutral

The company's Debt-to-Equity Ratio has increased to 0.86 in the TTM, indicating a rise in leverage, which could pose financial risks. However, the Equity Ratio of 38.7% suggests a reasonable proportion of assets are financed by equity. Return on Equity (ROE) has improved to 2.46% in TTM from negative values, indicating a recovery in shareholder returns.

Cash Flow

Negative

Cash flow analysis reveals a negative Free Cash Flow in TTM, though it has improved from the previous year. The Operating Cash Flow to Net Income Ratio is 6.21, showing strong cash generation relative to reported earnings. However, the Free Cash Flow to Net Income Ratio is negative, highlighting ongoing capital expenditure challenges.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
292.87B	280.25B	247.96B	246.79B	370.69B	270.96B
	Gross Profit
31.03B	24.22B	4.61B	1.57B	90.77B	22.77B
	EBIT
-2.39B	-8.47B	-21.96B	-18.00B	68.62B	5.73B
	EBITDA
42.87B	36.81B	13.55B	13.47B	102.29B	41.13B
	Net Income Common Stockholders
3.76B	-3.06B	-18.20B	-20.97B	61.33B	3.38B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
73.83B	73.61B	84.55B	85.57B	92.29B	91.51B
	Total Assets
393.84B	392.87B	383.47B	386.84B	424.81B	407.27B
	Total Debt
131.35B	127.79B	121.18B	96.19B	64.49B	127.09B
	Net Debt
63.93B	59.34B	37.21B	15.58B	-15.46B	36.82B
	Total Liabilities
234.93B	233.10B	218.11B	195.43B	186.84B	213.48B
	Stockholders Equity
152.40B	153.30B	159.17B	185.10B	231.79B	182.80B
Cash Flow		Free Cash Flow
-1.96B	-3.78B	-16.79B	-8.98B	87.65B	10.15B
	Operating Cash Flow
23.33B	23.15B	9.99B	26.97B	104.72B	25.75B
	Investing Cash Flow
-33.08B	-33.09B	-24.15B	-31.91B	-30.35B	-17.71B
	Financing Cash Flow
-11.81B	-7.39B	18.37B	2.35B	-83.47B	2.70B

AU Optronics Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.84

Price Trends

50DMA

3.99

Negative

100DMA

4.18

Negative

200DMA

4.61

Negative

Market Momentum

MACD

-0.03

Negative

RSI

45.91

Neutral

STOCH

>-0.01

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AUOTY, the sentiment is Negative. The current price of 3.84 is below the 20-day moving average (MA) of 3.84, below the 50-day MA of 3.99, and below the 200-day MA of 4.61, indicating a bearish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 45.91 is Neutral, neither overbought nor oversold. The STOCH value of >-0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AUOTY.

AU Optronics Risk Analysis

AU Optronics disclosed 65 risk factors in its most recent earnings report. AU Optronics reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

AU Optronics Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TSEM	71 Outperform	$4.65B	23.02	7.88%	―	5.22%	-58.99%
HIMX	70 Neutral	$1.51B	17.20	9.79%	3.41%	0.61%	80.97%
SLAB	66 Neutral	$4.08B	―	-14.77%	―	2.16%	-55.38%
Sector *	61 Neutral	$11.29B	10.17	-6.88%	2.97%	7.41%	-8.93%
ALGM	60 Neutral	$4.83B	―	-7.09%	―	-30.91%	-148.73%
LPL	58 Neutral	$2.94B	―	-28.93%	―	17.34%	34.72%
AUOTY	49 Neutral	$3.37B	39.51	2.46%	4.38%	10.62%	―

* Technology Sector Average

Performance Comparison

AUOTY

AU Optronics

3.84

-1.48

-27.82%

HIMX

Himax Technologies

8.62

2.39

38.36%

LPL

LG Display

3.03

-0.49

-13.92%

SLAB

Silicon Laboratories

125.38

3.36

2.75%

TSEM

Tower

41.57

4.38

11.78%

ALGM

Allegro MicroSystems

26.12

-3.74

-12.53%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.