Canon (CAJPY) AI Stock Analysis

• Market Cap: $28.47B
• Dividend Yield: 3.09%
• Average Volume (3M): 6.39K
• Price to Earnings (P/E): 24.2
• Beta (1Y): 0.36
• Revenue Growth: 4.88%
• EPS Growth: -39.81%
• Country: US
• Employees: 111,733
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 0.47
• Shares Outstanding: 1,333,763,400
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 6,389
• PEG Ratio: -0.83
• Price to Book (P/B): 1.46
• Price to Sales (P/S): 1.10
• P/FCF Ratio: 13.39
• Enterprise Value/Market Cap: 1.10
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: 0.01
• Enterprise Value/Ebitda: 0.04
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 2.22
• Revenue Forecast (FY): $29.69B

• Rating: 68 Neutral
• Price Target: $32.00 ▲(9.51% Upside)

Canon's overall stock score reflects solid financial performance with strong revenue growth and operational efficiency, although profitability and cash flow metrics need improvement. Technical analysis indicates mixed signals with potential short-term weakness. The valuation suggests the stock might be overvalued, but the dividend yield offers some appeal for income investors.

Positive Factors

Revenue Growth

Canon's robust revenue growth highlights its expanding market presence and effective product strategies, supporting long-term business stability.

Balance Sheet Health

A strong balance sheet with low leverage enhances financial flexibility, enabling Canon to invest in growth opportunities and withstand economic downturns.

Operational Efficiency

High operational efficiency through cost management supports sustained profitability, allowing Canon to maintain competitive pricing and invest in innovation.

Negative Factors

Profitability Concerns

Low net profit margins suggest challenges in converting revenue into profit, which may hinder long-term financial performance and shareholder returns.

Cash Flow Generation

Declining free cash flow growth can limit Canon's ability to fund new projects, pay dividends, or reduce debt, impacting future financial flexibility.

Earnings Growth

Negative EPS growth indicates declining profitability, which could affect investor confidence and Canon's capacity to reinvest in business expansion.

Canon Business Overview & Revenue Model

Company Description

Canon Inc., together with its subsidiaries, manufactures and sells office multifunction devices (MFDs), laser and inkjet printers, cameras, medical equipment, and lithography equipment worldwide. The company operates through Printing Business Unit, Imaging Business Unit, Medical Business Unit, Industrial Business Unit, and Others segments. The Printing Business Unit segment offers office MFDs, document solutions, laser multifunction printers, image scanners, calculators, digital continuous feed presses, digital sheet-fed presses, and large format printers. The Imaging Business Unit segment provides interchangeable-lens digital cameras, digital compact cameras, interchangeable lenses, compact photo printers, network cameras, video management and video content analytics software, digital camcorders, digital cinema cameras, broadcast equipment, and projectors. The Medical System Business Unit segment offers computed tomography systems, diagnostic ultrasound systems, diagnostic X-ray systems, magnetic resonance imaging systems, clinical chemistry analyzers, digital radiography systems, and ophthalmic equipment. The Industrial and Others Business segment provides semiconductor lithography equipment, flat panel display lithography equipment, vacuum thin-film deposition equipment, organic light-emitting diode display manufacturing equipment, handy terminals, document scanners, and die bonders. The company also provides maintenance services. It sells its products under the Canon brand through subsidiaries to retail dealers. Canon Inc. was founded in 1933 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Canon generates revenue through multiple streams primarily divided into three segments: Imaging System, Printing Technologies, and Medical Systems. The Imaging System segment, which includes digital cameras and camcorders, contributes significantly to the company's earnings, driven by both consumer and professional markets. The Printing Technologies segment offers a range of printers, including inkjet and laser printers, catering to both home users and large enterprises, thus generating substantial revenue from both hardware sales and consumables like ink and toner. The Medical Systems segment, which includes diagnostic imaging equipment and healthcare solutions, is a growing area for Canon, contributing to its diversification and revenue growth. Additionally, Canon enhances its earnings through strategic partnerships with other technology companies and service providers, as well as through its focus on research and development to innovate and improve its product offerings. The company also benefits from recurring revenue through service contracts and ongoing supplies, which complement its product sales.

Canon Financial Statement Overview

Summary

Canon's financial statements present a mixed picture. The company demonstrates strong profitability and a stable balance sheet with moderate leverage. However, the decline in revenue growth and free cash flow growth in the TTM period are areas of concern. While operational efficiency is improving, the company needs to address the negative growth trends to enhance its financial performance.

Income Statement

Canon's income statement shows a mixed performance. The TTM data indicates a decline in revenue growth rate, which is concerning. However, the company maintains a healthy gross profit margin of approximately 47%, and the net profit margin is stable at around 3.6%. The EBIT and EBITDA margins have improved in the TTM period, suggesting operational efficiency. Overall, while profitability is stable, the negative revenue growth is a key area of concern.

Balance Sheet

Canon's balance sheet is strong, with a debt-to-equity ratio of 0.35 in the TTM period, indicating moderate leverage. The return on equity is modest at 5.1%, reflecting stable profitability. The equity ratio stands at 53.8%, showcasing a solid capital structure. Overall, the balance sheet reflects financial stability with manageable debt levels.

Cash Flow

The cash flow statement reveals some challenges, with a significant decline in free cash flow growth in the TTM period. The operating cash flow to net income ratio is 0.29, indicating moderate cash generation relative to net income. The free cash flow to net income ratio is 0.54, suggesting that a reasonable portion of net income is converted into free cash flow. While cash flow generation is adequate, the decline in free cash flow growth is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.58T	4.51T	4.18T	4.03T	3.51T	3.16T
Gross Profit	2.14T	2.14T	1.97T	1.83T	1.63T	1.38T
EBITDA	700.83B	540.37B	631.71B	579.98B	524.60B	358.96B
Net Income	161.03B	160.03B	264.51B	243.96B	214.72B	83.32B
Balance Sheet
Total Assets	6.01T	5.77T	5.42T	5.10T	4.75T	4.63T
Cash, Cash Equivalents and Short-Term Investments	702.99B	506.34B	405.14B	373.01B	404.77B	407.75B
Total Debt	1.21T	663.50B	517.32B	417.41B	320.97B	506.17B
Total Liabilities	2.58T	2.12T	1.81T	1.75T	1.65T	1.84T
Stockholders Equity	3.16T	3.38T	3.35T	3.11T	2.87T	2.58T
Cash Flow
Free Cash Flow	280.18B	369.83B	220.88B	74.08B	273.68B	169.09B
Operating Cash Flow	527.38B	606.83B	451.19B	262.60B	451.03B	333.81B
Investing Cash Flow	-282.57B	-297.32B	-275.37B	-180.82B	-207.26B	-155.44B
Financing Cash Flow	-117.29B	-226.00B	-156.73B	-146.84B	-267.37B	-183.45B

Canon Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 29.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CAJPY, the sentiment is Negative. The current price of 29.22 is below the 20-day moving average (MA) of 29.66, below the 50-day MA of 29.28, and below the 200-day MA of 29.74, indicating a neutral trend. The MACD of 0.29 indicates Negative momentum. The RSI at 48.99 is Neutral, neither overbought nor oversold. The STOCH value of 32.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CAJPY.

Canon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WDC	77 Outperform	$61.91B	26.40	31.48%	0.18%	-16.35%	316.56%
NTAP	76 Outperform	$22.16B	19.48	125.35%	1.86%	2.64%	4.12%
CAJPY	68 Neutral	$28.47B	24.18	4.98%	3.09%	4.88%	-39.81%
STX	68 Neutral	$63.29B	38.04	―	0.97%	31.56%	106.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
HPQ	61 Neutral	$21.35B	8.77	―	5.02%	4.09%	-5.77%
SMCI	58 Neutral	$18.57B	24.93	12.79%	―	12.22%	-48.34%