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AU Optronics
(OTC:AUOTY)
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Rating:47Neutral
Price Target:
$10.00
▲(20.34% Upside)
Action:Reiterated
Date:10/29/26
The score is held back primarily by weak financial quality (thin margins and poor/volatile free cash flow) and a demanding valuation (very high P/E). Technicals are mixed with longer-term trend support but softer near-term momentum. The latest earnings call adds caution due to guided revenue declines and elevated inventories, partially offset by improving cash flow and strategic progress in new growth areas.
Positive Factors
Recent Cash Flow Improvement
Three consecutive quarters of positive free cash flow and a higher cash balance indicate improving liquidity after prior volatility. While the amount remains modest, sustained cash generation can support operations, reduce financing pressure, and fund selected strategic investments through the next several quarters.
Negative Factors
Persistently Weak Profitability
The recovery from earlier losses has not yet produced durable operating profitability. A sub-1% net margin and continuing operating losses leave little buffer against weaker demand, higher input costs, or unfavorable product mix, limiting the earnings resilience of the core business.
Read all positive and negative factors
Positive Factors
Negative Factors
Recent Cash Flow Improvement
Three consecutive quarters of positive free cash flow and a higher cash balance indicate improving liquidity after prior volatility. While the amount remains modest, sustained cash generation can support operations, reduce financing pressure, and fund selected strategic investments through the next several quarters.
Read all positive factors
AU Optronics (AUOTY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.82B
Dividend Yield1.17%
Average Volume (3M)42.77K
Price to Earnings (P/E)141.9
Beta (1Y)1.14
Revenue Growth-1.36%
EPS Growth-86.83%
CountryUS
Employees38,635
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)2.50
Shares Outstanding754,709,900
10 Day Avg. Volume28,699
30 Day Avg. Volume42,767
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)0.60
Price to Sales (P/S)0.32
P/FCF Ratio-12.89
Enterprise Value/Market Cap1.25
Enterprise Value/Revenue0.03
Enterprise Value/Gross Profit0.31
Enterprise Value/Ebitda0.48
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.07
Revenue Forecast (FY)$8.67B
AU Optronics Business Overview & Revenue Model
Company Description
AUO Corporation, established in 1996 in Hsinchu City, Taiwan, and formerly known as AU Optronics Corp. until its rebranding in June 2022, operates as a comprehensive technology company. Its primary business revolves around the research, developmen...
How the Company Makes Money
AU Optronics primarily makes money by selling display hardware—most notably LCD display panels and integrated modules—to original equipment manufacturers (OEMs) and brand customers that incorporate these components into end products such as televi...
AU Optronics Earnings Call Summary
Earnings Call Date:Oct 29, 2026
(Q3-2026)
| Next Earnings Date:Feb 04, 2027
Earnings Call Sentiment Neutral
The call presented a mixed outlook. AUO reported substantial near-term financial and Display pillar pressure, including lower revenue, negative operating profit, weaker notebook and monitor demand, elevated inventory, rising input costs, and expectations for further Q4 revenue declines. These challenges were balanced by positive cash generation, a declining gearing ratio, stable Mobility Solutions revenue, growth in Vertical Solutions, automotive and Micro LED project progress, semiconductor-related growth, and significant investment in new technology platforms. Overall, the call was cautious regarding near-term operating conditions but constructive about longer-term strategic opportunities.Positive Updates
Healthy Cash Position and Positive Free Cash Flow
Cash and cash equivalents increased by TWD 2.7 billion QoQ to TWD 56.5 billion at the end of Q3. Operating cash inflow was approximately TWD 3.9 billion, and free cash flow was approximately TWD 300 million, marking three consecutive quarters of positive free cash flow.
Negative Updates
Revenue Decline in Q3
Q3 revenue was TWD 66.9 billion, down roughly 5.7% QoQ, or approximately 6% according to the chairman. The decline was mainly attributable to weaker Display pillar performance.
Read all updates
Q3-2026 Updates
Positive
Negative
Healthy Cash Position and Positive Free Cash Flow
Cash and cash equivalents increased by TWD 2.7 billion QoQ to TWD 56.5 billion at the end of Q3. Operating cash inflow was approximately TWD 3.9 billion, and free cash flow was approximately TWD 300 million, marking three consecutive quarters of positive free cash flow.
Read all positive updates
Company Guidance
For Q4 2026, Mobility Solutions revenue is expected to remain roughly flat compared with Q3, Vertical Solutions revenue is expected to decline by a low to mid-single digit percentage point compared with Q3, and Display pillar revenue is expected to continue declining compared with Q3; excluding the impact of the energy business, Vertical Solutions pillar revenue would decrease by a low single-digit percentage QoQ. TV shipment volumes are likely to experience a single-digit decline while demand by shipment area is still expected to achieve single-digit growth; monitor sale through in Q4 is expected to decline by low single-digit percentage, and next year demand is also expected to decline by a low single-digit percentage. OPEX ratio is targeted within the range of 11%-12% in the short term and below 10% over the medium to long term; total inventory is expected to remain at a relatively elevated level over the next two years and begin declining gradually after the second half of the next year. Depreciation expense for 2026 is still expected to be approximately TWD 28 billion, while cash outflows for CapEx have been revised downward to no more than TWD 15 billion; new initiatives are expected to begin making meaningful contributions to overall revenue within the next two to three years, and Micro LED-related revenue is expected to grow by several times over the next one to two years.AU Optronics Financial Statement Overview
Summary
Income Statement
45
Neutral
Balance Sheet
58
Neutral
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 281.51B | 282.93B | 280.25B | 247.96B | 246.79B | 370.69B |
| Gross Profit | 31.82B | 32.53B | 24.22B | 4.61B | 1.57B | 90.77B |
| EBITDA | 20.60B | 28.95B | 36.81B | 13.55B | 13.47B | 102.29B |
| Net Income | 1.84B | 6.88B | -3.06B | -18.20B | -21.10B | 61.33B |
Balance Sheet | ||||||
| Total Assets | 380.21B | 380.95B | 392.87B | 383.47B | 386.84B | 424.81B |
| Cash, Cash Equivalents and Short-Term Investments | 55.19B | 56.12B | 73.61B | 84.55B | 85.57B | 92.29B |
| Total Debt | 108.49B | 117.11B | 127.79B | 121.18B | 96.19B | 64.49B |
| Total Liabilities | 212.19B | 217.57B | 233.10B | 218.11B | 195.43B | 186.84B |
| Stockholders Equity | 155.43B | 151.57B | 153.30B | 159.17B | 185.10B | 231.79B |
Cash Flow | ||||||
| Free Cash Flow | 27.48M | -7.08B | -3.78B | -16.79B | -8.98B | 87.69B |
| Operating Cash Flow | 12.95B | 11.19B | 23.15B | 9.99B | 26.97B | 104.72B |
| Investing Cash Flow | -482.94M | -5.92B | -33.09B | -24.15B | -31.91B | -30.35B |
| Financing Cash Flow | -19.20B | -18.82B | -7.39B | 18.37B | 2.35B | -83.47B |
AU Optronics Technical Analysis
Positive
8.31
Price Trends
10.02
Positive
9.11
Positive
7.24
Positive
Market Momentum
0.12
Positive
50.79
Neutral
43.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AUOTY, the sentiment is Positive. The current price of 8.31 is below the 20-day moving average (MA) of 11.20, below the 50-day MA of 10.02, and above the 200-day MA of 7.24, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 50.79 is Neutral, neither overbought nor oversold. The STOCH value of 43.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $3.82B | 17.15 | 13.54% | 2.30% | -1.91% | 6.11% | |
69 Neutral | $34.39B | 33.60 | 19.23% | ― | 17.55% | ― | |
66 Neutral | $111.02B | 51.52 | 17.25% | 0.87% | 18.80% | 56.55% | |
64 Neutral | $29.63B | 29.16 | 74.11% | 0.11% | 20.64% | 63.69% | |
64 Neutral | $9.28B | 30.36 | 12.57% | ― | 58.56% | 19.37% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
47 Neutral | $7.82B | 141.88 | 0.48% | 1.17% | -1.36% | -86.83% |
* Technology Sector Average
AUOTY
AU Optronics
10.80
6.89
175.91%
GLW
Corning
128.88
40.57
45.94%
FLEX
Flex
93.07
30.55
48.86%
JBL
Jabil
287.77
67.13
30.43%
SANM
Sanmina-Sci
173.06
36.01
26.28%
OLED
Universal Display
84.90
-59.33
-41.14%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.