Advantest (ATEYY) AI Stock Analysis

• Market Cap: $119.80B
• Dividend Yield: 0.18%
• Average Volume (3M): 66.31K
• Price to Earnings (P/E): 65.2
• Beta (1Y): 1.98
• Revenue Growth: 64.87%
• EPS Growth: 153.13%
• Country: US
• Employees: 6,766
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.71
• Shares Outstanding: 732,000,000
• 10 Day Avg. Volume: 37,091
• 30 Day Avg. Volume: 66,308
• PEG Ratio: 0.19
• Price to Book (P/B): 9.63
• Price to Sales (P/S): 6.26
• P/FCF Ratio: 18.30
• Enterprise Value/Market Cap: 160.91
• Enterprise Value/Revenue: 18.49
• Enterprise Value/Gross Profit: 29.65
• Enterprise Value/Ebitda: 43.75
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 2.94
• Revenue Forecast (FY): $6.87B

• Rating: 77 Outperform
• Price Target: $212.00 ▲(66.14% Upside)
• Action: Upgraded Date: 02/01/26
• Date: Action: Upgraded 02/01/26

Score is driven by strong financial performance (high margins, strong ROE, low leverage) and a clearly positive technical trend (price above key moving averages with positive MACD). The main constraint is valuation, with a high P/E and very low dividend yield, alongside inherent semiconductor cyclicality that can drive earnings and cash-flow volatility.

Positive Factors

High Profitability & Returns

Sustained, very high margins and elevated ROE indicate durable pricing power and product leadership in ATE equipment. This profitability supports reinvestment in R&D, funds operating leverage across cycles, and creates a long-term cushion to preserve shareholder returns.

Conservative Balance Sheet

Low leverage gives structural financial flexibility to weather semiconductor cyclicality, fund capex or M&A, and maintain customer support programs. A conservative balance sheet reduces refinancing risk and preserves strategic optionality across multi-quarter downturns.

Strong Cash Generation

High free-cash-flow conversion and recent FCF growth create a durable funding source for R&D, installed-base services, and capex tied to customer ramps. Reliable cash generation reduces reliance on external capital over multi-quarter planning horizons.

Negative Factors

Cyclical Demand Exposure

Revenue and earnings are closely tied to semiconductor capital spending and node transitions. This structural cyclicality can produce multi-quarter swings in orders and utilization, complicating capacity planning and making revenue streams inherently volatile.

Volatile Cash-Flow Conversion

Material swings in operating cash conversion driven by working-capital timing reduce predictability of free cash flow. Over a 2-6 month horizon this can constrain discretionary investments, service expansion, or shareholder returns despite strong accounting profits.

Rising Leverage Trend

Although absolute leverage remains low, an upward trend in debt increases sensitivity to cyclical downturns. Incremental leverage reduces margin for error, could raise financing costs in tighter markets, and limits flexibility for opportunistic investments.

Advantest Business Overview & Revenue Model

Company Description

Advantest Corporation manufactures and sells semiconductor and component test system products and mechatronics-related products. It operates through three segments: Semiconductor and Component Test System; Mechatronics System; and Services, Support and Others. The Semiconductor and Component Test System segment provides customers with test system products for the semiconductor industry and the electronic parts industry. This segment offers test systems for SoC semiconductor devices; and test systems for memory semiconductors devices. The Mechatronics System segment provides test handlers; mechatronic-applied products for handling semiconductor devices; and device interfaces, which serve as interfaces with the devices that are measured. This segment also engages in the operations related to nano-technology products. The Services, Support and Others segment provides customer solutions for the semiconductor and component test system and mechatronics system segments; and support services. This segment is also involved in the sale of consumables and used products; and equipment lease business and others. In addition, the company engages in the research and development activities measuring and testing technologies. Advantest Corporation serves fabless semiconductor companies, foundries, and test houses, as well as industrial, design, and manufacturing companies in Japan, rest of Asia, the United States, and Europe. Advantest Corporation has collaboration with STMicroelectronics on advanced automated test cell for IC Testing; and partnership with PDF Solutions Inc. for cloud-based software solutions. The company was founded in 1954 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Advantest generates revenue primarily through the sale of its semiconductor test equipment, systems, and software solutions. The company has a diversified revenue model that includes direct sales to semiconductor manufacturers, as well as ongoing support and maintenance services for its equipment. Key revenue streams include the sale of new test systems, upgrades and retrofits to existing systems, and software licensing. Advantest also benefits from strategic partnerships with major semiconductor companies, which can lead to long-term contracts and stable revenue flows. Additionally, the company's focus on innovation and development of cutting-edge testing technologies positions it to capture market share in emerging sectors, contributing to its overall earnings growth.

Advantest Financial Statement Overview

Summary

Strong profitability (TTM ~62% gross margin, ~28% net margin, ~40% EBIT margin) and high returns (TTM ROE ~49%) with low leverage (TTM debt-to-equity ~0.15). Offsetting factors are clear cycle-driven volatility (notably the FY2024 downturn) and uneven cash-flow conversion across periods despite solid TTM free cash flow quality.

Income Statement

TTM (Trailing-Twelve-Months) results show strong profitability with ~62% gross margin and ~28% net margin, alongside very high operating profitability (~40% EBIT margin). Revenue growth accelerated to ~6.2% in TTM versus a sharp decline in 2024 (about -13%), indicating a recovery after a cyclical downturn. Annual profitability also rebounded materially from 2024 to 2025 (net margin ~13% to ~21%). Key risk is the clear cyclicality in revenue and earnings (notably the 2024 pullback), which can create earnings volatility even with strong margins.

Balance Sheet

Leverage appears conservative: debt-to-equity is low in both TTM (~0.15) and FY2025 (~0.18), suggesting ample balance-sheet flexibility. Shareholder returns are very strong (TTM return on equity ~49%; FY2025 ~32%), reflecting robust profitability. The main watch-out is that such elevated returns can be cycle-sensitive in semiconductors, and debt levels have risen versus earlier years (e.g., FY2021), even if still manageable relative to equity.

Cash Flow

Cash generation is solid in TTM with operating cash flow (~339B) and free cash flow (~309B) tracking closely to net income (free cash flow is ~91% of net income), supporting earnings quality. Free cash flow growth is positive in TTM (~57%), but cash flow has been volatile across the cycle (FY2024 saw weak conversion with free cash flow well below net income). Operating cash flow relative to net income is around 1.09x in TTM (healthy), while FY2025 was slightly below 1.0x, indicating some variability in working capital and cash conversion.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	1.04T	779.71B	486.51B	560.19B	416.90B	312.79B
Gross Profit	650.10B	445.08B	246.03B	319.06B	235.91B	168.29B
EBITDA	440.57B	257.13B	108.98B	189.08B	129.70B	83.25B
Net Income	291.33B	161.18B	62.29B	130.40B	87.30B	69.79B
Balance Sheet
Total Assets	1.02T	854.21B	671.23B	600.22B	494.70B	422.64B
Cash, Cash Equivalents and Short-Term Investments	329.55B	262.54B	106.70B	85.54B	116.58B	149.16B
Total Debt	102.42B	93.50B	94.44B	50.84B	43.46B	11.85B
Total Liabilities	346.45B	347.67B	240.05B	231.53B	200.07B	142.27B
Stockholders Equity	674.76B	506.54B	431.18B	368.69B	294.62B	280.37B
Cash Flow
Free Cash Flow	308.76B	266.54B	12.13B	46.64B	60.67B	54.55B
Operating Cash Flow	339.38B	285.97B	32.67B	70.22B	78.89B	67.83B
Investing Cash Flow	-47.24B	-42.19B	-27.94B	-26.71B	-46.91B	-16.83B
Financing Cash Flow	-122.63B	-82.82B	10.76B	-77.43B	-68.74B	-30.41B

Advantest Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 127.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ATEYY, the sentiment is Positive. The current price of 127.6 is below the 20-day moving average (MA) of 171.38, below the 50-day MA of 151.40, and above the 200-day MA of 106.12, indicating a bullish trend. The MACD of 6.45 indicates Positive momentum. The RSI at 53.94 is Neutral, neither overbought nor oversold. The STOCH value of 66.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ATEYY.

Advantest Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATEYY	77 Outperform	$119.80B	65.24	51.90%	0.18%	64.87%	153.13%
TER	77 Outperform	$50.10B	92.26	19.73%	0.24%	4.56%	-15.44%
ON	64 Neutral	$26.19B	199.16	1.47%	―	-16.13%	-81.06%
STM	64 Neutral	$29.89B	180.31	0.93%	1.28%	-17.33%	-76.71%
ASX	63 Neutral	$53.97B	40.41	12.53%	2.29%	8.01%	10.41%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
MCHP	58 Neutral	$40.39B	-259.26	-1.09%	2.79%	-23.36%	-131.15%