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Disco
(6146)
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Rating:67Neutral
Price Target:
¥69,158.00
▲(13.58% Upside)
Action:Downgraded
Date:08/06/26
The score is supported primarily by excellent financial performance (exceptional margins and a debt-free, conservative balance sheet). It is held back by a currently weak-to-mixed technical setup (below key moving averages with negative MACD) and a demanding valuation (high P/E with a low dividend yield).
Positive Factors
Exceptional margins
Sustained very high gross and operating margins indicate durable product pricing power and efficiency in manufacturing and R&D. These margins create persistent cash generation capacity, allow reinvestment into technology, and provide a structural buffer through semiconductor demand cycles, supporting long-term profitability.
Negative Factors
Uneven revenue growth
Revenue swings tied to semiconductor cyclicality create persistent forecasting and planning risk. Uneven top-line growth can force variable utilization and pricing pressure across product lines, making multi-quarter investment outcomes and steady margin expansion harder to sustain for management and capital allocators.
Read all positive and negative factors
Positive Factors
Negative Factors
Exceptional margins
Sustained very high gross and operating margins indicate durable product pricing power and efficiency in manufacturing and R&D. These margins create persistent cash generation capacity, allow reinvestment into technology, and provide a structural buffer through semiconductor demand cycles, supporting long-term profitability.
Read all positive factors
Disco (6146) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥6.34T
Dividend Yield0.86%
Average Volume (3M)4.03M
Price to Earnings (P/E)45.0
Beta (1Y)1.33
Revenue Growth15.20%
EPS Growth17.70%
CountryJP
Employees5,547
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)1346.11
Shares Outstanding108,483,730
10 Day Avg. Volume3,686,180
30 Day Avg. Volume4,033,456
Financial Highlights & Ratios
PEG Ratio5.26
Price to Book (P/B)11.30
Price to Sales (P/S)15.20
P/FCF Ratio67.88
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥93,000.00Price Target Upside52.73% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)1,698.51
Revenue Forecast (FY)¥552.19B
Disco Business Overview & Revenue Model
Company Description
Established in Tokyo in 1937, Disco Corporation is a leading global manufacturer and distributor of high-precision equipment for cutting, grinding, and polishing. Its extensive catalog of precision machinery encompasses dicing and laser saws, grin...
How the Company Makes Money
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Disco Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Neutral
The call presents a mixed picture: strong, record-breaking Q1 shipments (JPY111.1bn) and clear momentum from generative AI-related ICs and OSAT drove an upward revision to near-term guidance (≈JPY9bn uplift). However, nearer-term volatility is expected with a Q2 timing-related decline, FX-related gross margin pressure (Q1 GP 68.1% vs ~70% FX-adjusted; Jul–Sep GP expected to fall <2pp), weakness in power semiconductors and SiC consumables, and reduced order visibility from customers. Strategic technology progress (NAND hybrid bonding, PLP pipeline) is a positive but not yet fully monetized. Overall the positives in Q1 are offset by material near-term uncertainties and headwinds.Positive Updates
Record Quarterly Shipments
Q1 shipments reached JPY111.1 billion, the highest quarterly shipment on record and well above external forecasts.
Negative Updates
Near-Term Timing-Driven Shipment Volatility (Q2 Dip Expected)
Management expects Q2 shipments to decline from Q1 largely due to timing (advance shipments recorded in Q1) and a reaction to concentrated generative AI-related shipments; Q3 may recover somewhat, but Q4 visibility remains weak.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Quarterly Shipments
Q1 shipments reached JPY111.1 billion, the highest quarterly shipment on record and well above external forecasts.
Read all positive updates
Company Guidance
Management guided that Q1 shipments were JPY111.1 billion (a quarterly record, above external forecasts) and that they raised expected shipments by about JPY9 billion overall—more than JPY5 billion for machinery & equipment (including just over JPY4 billion from some evaluation/advanced machine deliveries moved into Q1) and roughly JPY3 billion for other products; Q1 product mix was memory just over 40%, OSAT about 30% and power semiconductors under 10% (SiC at single‑digit percentages), with DRAM:NAND roughly 6:4–7:3, while Q2 is expected to see memory ~35%, OSAT <30% and power <10% as a timing‑related pullback from generative‑AI concentration in Q1. On profitability, Q1 gross profit was 68.1% (would have been ~70% at last year’s FX of JPY158; Apr–Jun FX was JPY144) and management expects Q2 GP to decline by under 2 percentage points assuming a JPY135 FX for Jul–Sep; SG&A is forecast at about JPY27.0 billion for Jul–Sep (JPY26.7 billion in the prior quarter). They noted a JPY5 billion Q4-to‑H1 carryover (JPY3 billion slipped into Q1, ~JPY2 billion into Q2), North America accounts for ~10% of projects, consumables weakness is driven by lower SiC (occupancy should recover into Q2/Q3), and strategic areas show NAND hybrid bonding progressing toward mass production, WMCM demand not yet large, and PLP customer inquiries increasing but not yet volume‑contributory; overall Q3 is expected to be modestly stronger than Q2 but Q4 remains uncertain.Disco Financial Statement Overview
Summary
Income Statement
90
Very Positive
Balance Sheet
94
Very Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Mar 2026 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 461.28B | 436.89B | 393.31B | 307.55B | 284.13B | 253.78B |
| Gross Profit | 325.79B | 305.50B | 277.45B | 208.60B | 184.47B | 153.97B |
| EBITDA | 214.35B | 198.63B | 180.34B | 125.61B | 123.16B | 100.80B |
| Net Income | 145.98B | 135.52B | 123.89B | 84.21B | 82.89B | 66.21B |
Balance Sheet | ||||||
| Total Assets | 751.16B | 743.41B | 654.09B | 560.42B | 472.69B | 404.54B |
| Cash, Cash Equivalents and Short-Term Investments | 283.89B | 284.57B | 229.17B | 215.49B | 163.05B | 125.77B |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 168.63B | 155.28B | 161.38B | 153.85B | 124.65B | 110.73B |
| Stockholders Equity | 582.17B | 587.76B | 492.36B | 406.37B | 347.80B | 293.54B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 97.83B | 52.41B | 81.31B | 67.58B | 40.08B |
| Operating Cash Flow | 0.00 | 133.54B | 120.36B | 97.52B | 81.78B | 83.65B |
| Investing Cash Flow | 0.00 | -135.77B | -68.00B | -16.40B | -13.08B | -43.59B |
| Financing Cash Flow | 0.00 | -45.03B | -38.15B | -30.94B | -32.09B | -27.19B |
Disco Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | ¥713.46B | 27.88 | 13.70% | 1.50% | 13.77% | 3.10% | |
70 Outperform | ¥24.77T | 41.40 | 28.89% | 1.79% | 8.25% | 16.50% | |
69 Neutral | ¥3.38T | 44.28 | 40.97% | 0.76% | -8.35% | -8.09% | |
68 Neutral | ¥2.44T | 29.52 | 20.78% | 0.92% | -5.60% | -10.68% | |
67 Neutral | ¥6.34T | 45.05 | 26.19% | 0.83% | 15.20% | 17.70% | |
62 Neutral | ¥1.94T | 55.89 | ― | 0.43% | 14.73% | 17.69% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
JP:6146
Disco
58,440.00
18,179.29
45.15%
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Disco Corporate Events
Disco grants performance-linked stock options to executive officers
Jul 23, 2026
Disco Corporation’s board has approved the issuance of new share acquisition rights as stock options for six executive officers, including those who also serve as directors. The program covers 36 rights linked to 3,600 common shares and is s...
Disco Adopts Long-Term Restricted Stock Plan for Executive Officers
Jul 23, 2026
Disco Corporation has approved the issuance of 3,000 new common shares as restricted stock-based remuneration for six executive officers, with a total value of approximately ¥205.77 million and a payment date set for August 7, 2026. The move ...
Disco Lifts Q1 Results Above Forecasts and Issues First-Half Outlook, Dividend Guidance
Jul 23, 2026
Disco Corporation reported that customer inspection and acceptance of its precision processing equipment progressed faster than expected in the first quarter of fiscal 2026, resulting in higher-than-forecast net sales and profits at all levels. Th...
Disco Lifts Outlook as Profit Surges in Strong First Quarter
Jul 23, 2026
Disco Corporation reported strong first-quarter fiscal 2026 results, with sharp year-on-year gains in net sales, operating income, ordinary income, and net income, driving comprehensive income up nearly 50%. The company’s balance sheet remai...
Disco’s Record Shipments Beat Forecasts on Generative AI Demand
Jul 6, 2026
Disco Corporation reported first-quarter fiscal 2026 non-consolidated net sales of 95.0 billion yen, beating its latest forecast by around 10 percent and marking a 26.0 percent year-on-year increase, despite a sequential decline from the previous ...
Disco Weighs Cutting Share Investment Unit to Boost Liquidity
Jun 19, 2026
Disco Corporation has outlined its stance on potentially reducing the minimum investment unit of its shares, saying it views a lower trading unit as a way to broaden participation by individual investors and improve liquidity in its stock. The com...
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.