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Disco Corporation (JP:6146)
:6146
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Disco (6146) AI Stock Analysis

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JP:6146

Disco

(OTC:6146)

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Outperform 73 (OpenAI - 4o)
Rating:73Outperform
Price Target:
Disco exhibits strong financial fundamentals, with impressive revenue growth and a robust balance sheet characterized by zero debt. Despite the solid financial performance, technical indicators highlight a bearish trend with the stock trading below key moving averages and negative momentum signals. The stock's valuation appears fair, with a moderate P/E ratio and a modest dividend yield. These mixed factors lead to an overall score that reflects strong financial health but tempered by current market sentiment.

Disco (6146) vs. iShares MSCI Japan ETF (EWJ)

Disco Business Overview & Revenue Model

Company DescriptionDisco Corporation manufactures and sells precision cutting, grinding, and polishing machines in Japan and internationally. The company's precision machines include dicing saws, laser saws, grinders, polishers, wafer mounters, die separators, surface planers, and waterjet saws, as well as products for dicing before grinding process and package singulation. It also offers precision processing tools comprising dicing blades, grinding wheels, and dry polishing wheels; and other products, such as accessory equipment, as well as frames and cassettes, and additives for cutting waters. In addition, the company is involved in the disassembly and recycling of precision cutting, grinding, and polishing machines, as well as provides training services for the maintenance and operation of its products. Further, it leases precision machines; and purchases and sells used machines. The company was founded in 1937 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyDisco Corporation primarily generates revenue through the sale of its precision processing equipment and consumables. The company's key revenue streams include the sale of dicing saws, grinders, and polishing machines, which are critical for semiconductor and electronic component manufacturing. Additionally, Disco earns significant income from consumables like blades and wheels that are used with their machines. The company also provides maintenance and support services, which contribute to its earnings. Partnerships with semiconductor manufacturers and continuous innovation in processing technology play a crucial role in sustaining Disco's revenue growth.

Disco Financial Statement Overview

Summary
Disco is in a strong financial position with impressive revenue growth and profitability. The company's balance sheet shows excellent financial health with no debt and a high equity ratio, minimizing financial risk. While cash flow generation remains strong, the recent decline in operating cash flow warrants attention. Overall, Disco is well-positioned for continued growth and stability in the semiconductor industry.
Income Statement
92
Very Positive
Disco demonstrates remarkable growth with a TTM revenue of ¥376.9 billion, reflecting a substantial increase from ¥253.8 billion in 2022. Gross profit margin is strong at 70.2%, and the net profit margin is impressive at 32.0%, indicating efficient cost management and strong profitability. EBIT and EBITDA margins are also robust at 42.8% and 44.6% respectively, showcasing operational efficiency.
Balance Sheet
95
Very Positive
The company maintains a solid balance sheet with zero debt, resulting in a debt-to-equity ratio of 0. The equity ratio is strong at 72.2%, highlighting financial stability. Return on equity stands at 26.6%, indicating effective use of equity to generate profits. The absence of debt and high equity ratio reduces financial risk significantly.
Cash Flow
88
Very Positive
Operating cash flow is robust at ¥28 billion, with a healthy free cash flow of ¥23.7 billion. The free cash flow to net income ratio is healthy, indicating strong cash generation relative to profits. However, there is a noticeable decline in operating cash flow compared to previous years, which could be monitored for potential liquidity risks.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue400.43B393.31B307.55B284.13B253.78B182.86B
Gross Profit281.02B277.45B208.60B184.47B153.97B106.83B
EBITDA178.39B180.34B125.61B123.16B100.80B60.25B
Net Income123.94B123.89B84.21B82.89B66.21B39.09B
Balance Sheet
Total Assets620.08B654.09B560.42B472.69B404.54B329.03B
Cash, Cash Equivalents and Short-Term Investments198.50B229.17B215.49B163.05B125.77B109.81B
Total Debt0.000.000.000.000.000.00
Total Liabilities135.16B161.38B153.85B124.65B110.73B76.67B
Stockholders Equity484.62B492.36B406.37B347.80B293.54B252.14B
Cash Flow
Free Cash Flow0.0052.41B81.31B67.58B40.08B35.68B
Operating Cash Flow0.00120.36B97.52B81.78B83.65B56.71B
Investing Cash Flow0.00-68.00B-16.40B-13.08B-43.59B-13.11B
Financing Cash Flow0.00-38.15B-30.94B-32.09B-27.19B-15.82B

Disco Technical Analysis

Technical Analysis Sentiment
Positive
Last Price46510.00
Price Trends
50DMA
42240.67
Positive
100DMA
39436.39
Positive
200DMA
38645.72
Positive
Market Momentum
MACD
1989.81
Negative
RSI
60.03
Neutral
STOCH
47.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6146, the sentiment is Positive. The current price of 46510 is above the 20-day moving average (MA) of 42859.32, above the 50-day MA of 42240.67, and above the 200-day MA of 38645.72, indicating a bullish trend. The MACD of 1989.81 indicates Negative momentum. The RSI at 60.03 is Neutral, neither overbought nor oversold. The STOCH value of 47.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6146.

Disco Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
¥12.14T22.7329.33%2.23%21.68%26.74%
74
Outperform
¥11.08T48.9539.62%0.27%72.67%196.67%
73
Outperform
$5.08T40.9328.07%0.76%19.04%30.11%
72
Outperform
¥1.22T13.2723.65%2.29%16.20%22.07%
67
Neutral
¥1.82T21.531.42%17.78%43.29%
55
Neutral
¥418.50B39.065.37%3.36%-8.83%-39.67%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:6146
Disco
46,510.00
7,581.26
19.47%
JP:6857
Advantest
14,650.00
7,788.16
113.50%
JP:7735
SCREEN Holdings Co
13,460.00
3,435.70
34.27%
JP:6920
Lasertec
20,305.00
-3,233.09
-13.74%
JP:6723
Renesas Electronics
1,706.00
-424.64
-19.93%
JP:3436
SUMCO Corporation
1,577.00
7.86
0.50%

Disco Corporate Events

Disco Corporation Announces Dividend Payout for Fiscal Year 2024
Apr 17, 2025

Disco Corporation announced a resolution to distribute surplus earnings as dividends, with a total year-end dividend of 289 yen per share, bringing the total annual dividend to 413 yen. This decision aligns with their performance-linked dividend policy, aiming to prioritize shareholder returns by setting a target payout ratio of 25% of consolidated net income and adding surplus cash to dividends, reflecting a stable financial strategy.

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: Apr 21, 2025