Disco (6146) AI Stock Analysis

• Market Cap: $3.81T
• Dividend Yield: 1.12%
• Average Volume (3M): 6.34M
• Price to Earnings (P/E): 31.3
• Beta (1Y): 1.57
• Revenue Growth: 27.88%
• EPS Growth: 47.09%
• Country: JP
• Employees: 4,886
• Sector: Technology
• Sector Strength: 76
• Industry: Semiconductors
• EPS (TTM): 356.52
• Shares Outstanding: 108,420,660
• 10 Day Avg. Volume: 5,098,250
• 30 Day Avg. Volume: 6,338,303
• PEG Ratio: 10.28
• Price to Book (P/B): 6.83
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 142.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $40,719.49
• Price Target Upside: 15.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

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 Business Overview & Revenue Model

Company Description

Disco Corporation, headquartered in Tokyo, Japan, is a leading manufacturer in the semiconductor industry. The company specializes in precision processing equipment and tools, including dicing saws, grinders, and polishing machines. These products are essential for the production of semiconductors and electronic components, serving various sectors such as consumer electronics, automotive, telecommunications, and industrial applications.

How the Company Makes Money

Disco 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

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

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

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.

Breakdown
TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
376.89B	393.31B	307.55B	284.13B	253.78B	182.86B
	Gross Profit
264.65B	277.45B	208.64B	184.51B	154.01B	106.88B
	EBIT
161.20B	166.72B	121.49B	110.41B	91.51B	53.11B
	EBITDA
168.17B	180.34B	132.49B	120.78B	100.06B	59.87B
	Net Income Common Stockholders
120.68B	123.89B	84.20B	82.89B	66.21B	39.09B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
263.49B	229.17B	215.49B	163.05B	125.77B	109.81B
	Total Assets
628.79B	654.09B	556.06B	468.80B	404.54B	329.03B
	Total Debt
0.00	0.00	0.00	0.00	0.00	0.00
	Net Debt
-263.49B	-229.17B	-215.49B	-163.05B	-125.77B	-109.81B
	Total Liabilities
174.69B	161.38B	149.50B	120.76B	110.73B	76.67B
	Stockholders Equity
453.77B	492.36B	406.37B	347.80B	293.54B	252.14B
Cash Flow		Free Cash Flow
23.68B	52.41B	81.27B	67.53B	40.02B	35.60B
	Operating Cash Flow
28.01B	120.36B	97.52B	81.78B	83.65B	56.71B
	Investing Cash Flow
-4.39B	-68.00B	-16.40B	-13.08B	-43.59B	-13.11B
	Financing Cash Flow
-4.09B	-38.15B	-30.94B	-32.09B	-27.19B	-15.82B

Disco Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 35150.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6146, the sentiment is Neutral. The current price of 35150 is above the 20-day moving average (MA) of 29655.75, above the 50-day MA of 30693.43, and below the 200-day MA of 39157.73, indicating a neutral trend. The MACD of 1308.33 indicates Negative momentum. The RSI at 63.76 is Neutral, neither overbought nor oversold. The STOCH value of 87.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:6146.

Disco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6920	84 Outperform	$1.34T	19.03	44.53%	1.68%	-2.37%	4.89%
8035	81 Outperform	$10.86T	20.41	29.69%	2.58%	32.83%	50.73%
6857	80 Outperform	$5.37T	33.90	34.01%	0.51%	60.27%	158.92%
6146	73 Outperform	$3.81T	31.34	27.22%	1.12%	27.88%	47.09%
7735	71 Outperform	$1.03T	10.35	24.78%	2.83%	30.34%	55.11%
6141	68 Neutral	$419.07B	25.72	8.94%	3.19%	-4.91%	-16.52%
Sector *	60 Neutral	$11.59B	10.44	-7.23%	2.94%	7.46%	-10.66%

Disco Corporate Events

Disco Corporation Announces Dividend Payout for Fiscal Year 2024

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.