AUO Corporation (2409) AI Stock Analysis

AUO Corporation

(TWSE:2409)

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Rating:43Neutral

Price Target:TWD 26.00▼(-9.25% Downside)

Action:initiatedcoverage

Date:11/09/26

AUO scores poorly overall, driven primarily by weak financial fundamentals: negative free cash flow for a fourth year in five, halved operating cash flow, an operating line still in the red, and a shrinking equity base against NT$117B of debt. Technicals compound the concern, with the share price below its 20-, 50- and 100-day moving averages and negative MACD momentum, though an oversold Stochastic/RSI reading and support near the 200-day average could permit a short-term bounce. Valuation offers no cushion at a 356x P/E, partly mitigated by a 1.5% dividend yield. The latest earnings call confirms near-term pressure — a TWD 2.5B quarterly loss, weaker Display demand, elevated inventories and component shortages — but also highlights genuine positives: three straight quarters of positive free cash flow, falling gearing, reduced CapEx and strategic investments in automotive, Micro LED and semiconductor-related technologies. This is an early-stage, high-risk turnaround in a deeply cyclical industry.

Positive Factors

Moderate leverageA sizable equity base and moderate leverage provide AUO with greater resilience through display-cycle downturns. The improvement in debt-to-equity also supports financial flexibility, helping the company continue funding strategic investments while reducing pressure on future cash flows.

Negative Factors

Persistent negative free cash flowRepeatedly negative free cash flow indicates that accounting earnings have not translated into internally funded investment and liquidity. This reduces financial flexibility, increases execution sensitivity, and may constrain AUO’s ability to pursue new growth initiatives without relying more heavily on its balance sheet.

AUO Corporation (2409) vs. SPDR S&P 500 ETF (SPY)

Market Cap: TWD 225.66B
Dividend Yield: 1.40%
Average Volume (3M): 344.93M
Price to Earnings (P/E): 358.1
Beta (1Y): 1.06
Revenue Growth: -1.07%
EPS Growth: -88.79%
Country: TW
Employees: 38,635
Sector: General
Sector Strength: 55
Industry: Hardware, Equipment & Parts

AUO Corporation Business Overview & Revenue Model

Company Description

AUO Corporation, established in 1996 and headquartered in Hsinchu City, Taiwan, is a leading technology company primarily engaged in the research, development, production, and sale of thin-film transistor liquid crystal displays (TFT-LCDs) and a wide...

AUO Corporation Financial Statement Overview

Summary

Weak overall, with only early signs of a turnaround. The income statement (44) shows a return to a NT$6.8B net profit and gross margin expansion to 11.5%, but the operating line remains slightly negative (-0.4% margin), revenue is flat and EBITDA fell to NT$28.8B. The balance sheet (52) is adequately capitalized at ~40% equity funding with debt reduced by ~NT$10B, yet equity has eroded by nearly NT$80B since 2021 and leverage has climbed from 0.28 to 0.77 debt-to-equity. Cash flow (33) is the weakest link: operating cash flow halved to NT$11.1B, free cash flow was negative at -NT$7.0B (the fourth negative year in five), and operating cash covers only ~9% of a NT$117B debt load, signalling poor earnings quality and continued reliance on external funding.

Income Statement

44Neutral

Balance Sheet

52Neutral

Cash Flow

33Negative

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	279.97B	281.39B	280.25B	247.96B	246.79B	370.69B
Gross Profit	31.65B	32.35B	24.22B	4.61B	1.57B	90.77B
EBITDA	19.68B	28.79B	36.66B	13.55B	13.47B	102.29B
Net Income	1.80B	6.84B	-3.06B	-18.20B	-20.97B	61.33B
Balance Sheet
Total Assets	377.68B	382.02B	392.87B	383.47B	386.84B	424.81B
Cash, Cash Equivalents and Short-Term Investments	54.82B	56.28B	73.61B	84.55B	85.57B	92.29B
Total Debt	107.77B	117.44B	127.79B	121.18B	96.19B	64.49B
Total Liabilities	210.77B	218.18B	233.10B	218.11B	195.43B	186.84B
Stockholders Equity	154.40B	152.00B	153.30B	159.17B	185.10B	231.79B
Cash Flow
Free Cash Flow	-35.24M	-7.05B	-3.78B	-16.79B	-8.98B	87.65B
Operating Cash Flow	12.89B	11.13B	23.15B	9.99B	26.97B	104.72B
Investing Cash Flow	-13.45M	-5.88B	-33.09B	-24.15B	-31.91B	-30.35B
Financing Cash Flow	-19.62B	-18.72B	-7.39B	18.37B	2.35B	-83.47B

AUO Corporation Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

TW:2409 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TW:3005	77Outperform	TWD 66.83B	12.88	―	6.20%	11.11%	3.90%
TW:2385	64Neutral	TWD 63.95B	9.74	―	8.25%	-10.82%	-28.50%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
TW:2377	50Neutral	TWD 118.28B	12.57	―	2.90%	1.41%	111.21%
TW:3481	45Neutral	TWD 313.18B	51.50	―	2.46%	10.66%	-35.60%
TW:2352	44Neutral	TWD 47.26B	29.19	―	11.06%	1.60%	19.60%
TW:2409	43Neutral	TWD 207.55B	358.13	―	1.40%	-1.07%	-88.79%

* General Sector Average

Performance Comparison

TW:2409 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TW:2409	AUO Corporation	28.65	16.85	142.86%
TW:2352	Qisda Corporation	28.90	1.63	5.97%
TW:2377	Micro-Star International Co., Ltd.	145.00	38.64	36.33%
TW:2385	Chicony Electronics Co. Ltd.	87.30	-33.21	-27.56%
TW:3005	Getac Holdings Corporation	109.50	-12.60	-10.32%
TW:3481	Innolux Corp.	40.60	27.60	212.33%

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.

Date of analysis: Nov 09, 2026

AUO Corporation AI Stock Analysis