Towa Corporation (6315) AI Stock Analysis

• Market Cap: ¥224.16B
• Dividend Yield: 1%
• Average Volume (3M): 6.94M
• Price to Earnings (P/E): 36.4
• Beta (1Y): 2.24
• Revenue Growth: -12.50%
• EPS Growth: -26.08%
• Country: JP
• Employees: 1,985
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 31.71
• Shares Outstanding: 75,157,364
• 10 Day Avg. Volume: 5,118,940
• 30 Day Avg. Volume: 6,944,783
• PEG Ratio: 0.53
• Price to Book (P/B): 1.82
• Price to Sales (P/S): 2.08
• P/FCF Ratio: 20.92
• 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: ¥3,099.78
• Price Target Upside: 3.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: ¥3,143.00 ▲(5.36% Upside)

Score is led by strong financial performance (profitability, low leverage, and positive cash generation). Technicals are supportive due to a clear uptrend but are tempered by overbought momentum signals, increasing near-term pullback risk. Valuation is a notable constraint given the higher P/E and modest dividend yield.

Positive Factors

Margin and Profitability

Sustained high gross and operating margins indicate durable product differentiation and pricing power in semiconductor packaging equipment. These margins support reinvestment in R&D and product upgrades, provide a cushion through downturns, and enable consistent internal funding for growth initiatives.

Conservative Balance Sheet

Very low leverage and a strong equity base give the company financial flexibility to fund capex, absorb cyclical demand swings, and pursue strategic investments without stressing liquidity. A solid ROE also shows efficient capital use, aiding long-term stability and resilience.

Strong Cash Generation

Positive and material free cash flow with strong cash conversion supports ongoing equipment maintenance, after-sales service networks, and selective capex. Reliable FCF underpins sustainable operations, funds innovation, and reduces reliance on external financing over multi-quarter horizons.

Negative Factors

Recent Revenue Contraction

A notable year-over-year revenue decline signals weakening end-market demand or order timing shifts. Persistent revenue contraction can erode scale advantages, pressure fixed-cost absorption, reduce future R&D funding, and weaken long-term growth visibility if not reversed over subsequent quarters.

Earnings Pressure and Volatility

Sharp EPS decline reflects margin or volume stress and increases earnings volatility. Extended earnings weakness can limit reinvestment, constrain hiring or production capacity expansion, and make long-term planning harder for management in a capital-intensive equipment business.

End-market Cyclicality Exposure

Concentration in semiconductor packaging ties revenue to capital spending cycles, tech node transitions, and consumer/auto demand swings. This structural exposure can lead to multi-quarter demand variability, making revenue predictability and capacity utilization more uncertain over the medium term.

Towa Corporation Business Overview & Revenue Model

Company Description

TOWA Corporation designs, develops, manufactures, and sells semiconductor manufacturing equipment and high-precision molds in Japan and internationally. The company's products include molding equipment, singulation equipment, ultra-precision molds, THPL-CBN end mills, and TEN-systems. It also sells used equipment. The company was formerly known as TOWA Precision Industries Limited and changed its name to TOWA Corporation in December 1988. TOWA Corporation was incorporated in 1979 and is headquartered in Kyoto, Japan.

How the Company Makes Money

Towa Corporation generates revenue through the sale of its semiconductor packaging equipment and solutions, which is a significant part of its business model. The company primarily earns money by selling its automatic molding machines and related products to semiconductor manufacturers, who utilize these machines to produce packaging for various electronic components. Additionally, Towa benefits from after-sales services, including maintenance and support, which further contributes to its revenue. The company has established partnerships with key players in the semiconductor industry, enhancing its market reach and facilitating consistent demand for its products. Factors such as advancements in technology, the growing demand for miniaturized electronic devices, and the expansion of the global semiconductor market play crucial roles in driving Towa's earnings.

Towa Corporation Financial Statement Overview

Summary

Strong overall fundamentals: solid profitability (gross margin 37.2%, net margin 15.2%) and healthy operating efficiency (EBIT margin 16.6%, EBITDA margin 26.4%). Balance sheet is conservatively financed (debt-to-equity 0.16, equity ratio 73.7%) and cash generation is positive (FCF 5.3B JPY; operating cash flow to net income 1.28). Minor watchouts include the prior-year revenue dip (2023 to 2024) and lower free cash flow versus the previous year.

Income Statement

Towa Corporation demonstrates strong financial performance with a consistent revenue growth rate of approximately 6% from 2024 to 2025. The gross profit margin stands at 37.2% for 2025, indicating efficient cost management. The net profit margin of 15.2% further underscores profitability. EBIT and EBITDA margins are robust at 16.6% and 26.4%, respectively, showcasing solid operational efficiency. However, slight declines in revenue from 2023 to 2024 should be monitored for potential future impact.

Balance Sheet

The balance sheet reveals a strong financial position with a debt-to-equity ratio of 0.16, indicating low leverage and reduced financial risk. The equity ratio is solid at 73.7%, reflecting substantial equity backing. The return on equity (ROE) is impressive at 13.2%, demonstrating effective use of equity to generate profits. While the total assets decreased slightly in 2025, the company maintains a healthy liquidity position.

Cash Flow

Towa Corporation's cash flow statement shows a positive trajectory, with a free cash flow of 5.3 billion JPY in 2025. The operating cash flow to net income ratio of 1.28 indicates strong cash conversion from profits. Although the free cash flow decreased from the previous year, the company maintains positive cash flow, supporting operations and growth initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	48.31B	53.48B	50.47B	53.82B	50.67B	29.71B
Gross Profit	17.29B	19.91B	18.20B	18.81B	18.65B	9.62B
EBITDA	9.39B	14.12B	11.87B	12.87B	13.71B	5.50B
Net Income	5.90B	8.12B	6.44B	7.35B	8.13B	2.66B
Balance Sheet
Total Assets	86.62B	83.23B	87.86B	73.47B	71.33B	51.79B
Cash, Cash Equivalents and Short-Term Investments	23.61B	21.34B	20.83B	16.55B	12.41B	10.69B
Total Debt	13.21B	10.06B	14.02B	15.87B	10.42B	7.81B
Total Liabilities	26.38B	21.84B	29.43B	25.85B	30.21B	20.29B
Stockholders Equity	60.24B	61.39B	58.44B	47.22B	40.73B	31.18B
Cash Flow
Free Cash Flow	0.00	5.33B	8.00B	99.81M	1.13B	2.62B
Operating Cash Flow	0.00	10.37B	9.67B	2.83B	6.40B	5.31B
Investing Cash Flow	0.00	-4.76B	-2.77B	-2.75B	-6.60B	-2.77B
Financing Cash Flow	0.00	-5.13B	-3.52B	3.96B	1.93B	-2.24B

Towa Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2983.00
• 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 JP:6315, the sentiment is Positive. The current price of 2983 is above the 20-day moving average (MA) of 2815.55, above the 50-day MA of 2390.42, and above the 200-day MA of 1976.82, indicating a bullish trend. The MACD of 210.36 indicates Positive momentum. The RSI at 64.09 is Neutral, neither overbought nor oversold. The STOCH value of 53.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6315.

Towa Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5384	77 Outperform	¥207.81B	20.82	―	3.09%	14.85%	29.86%
6890	76 Outperform	$278.85B	21.68	5.41%	3.28%	11.15%	-19.39%
6966	75 Outperform	¥135.97B	13.22	―	2.45%	4.60%	-21.64%
6315	71 Outperform	¥224.16B	36.41	10.10%	1.00%	-12.50%	-26.08%
6871	70 Outperform	¥342.62B	34.00	―	1.02%	29.60%	24.39%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6707	55 Neutral	¥146.38B	127.51	―	―	-51.82%	-96.08%

Towa Corporation Corporate Events

Towa Corporation Exceeds Profit Forecasts for FY2025 Q2

Towa Corporation reported a positive variance between its forecasted and actual results for the second quarter of the fiscal year ending March 31, 2026. The company achieved higher profits than expected due to an improved profit margin driven by an increased sales ratio of high value-added products, indicating a strong operational performance.

The most recent analyst rating on (JP:6315) stock is a Buy with a Yen2535.00 price target. To see the full list of analyst forecasts on Towa Corporation stock, see the JP:6315 Stock Forecast page.

Towa Corporation Reports Decline in Semi-Annual Financial Results

Towa Corporation reported a significant decline in its consolidated financial results for the six months ending September 30, 2025, with net sales dropping by 14.4% and operating profit falling by 52.6% compared to the previous year. Despite the downturn, the company maintains a strong equity-to-asset ratio of 70.1%, indicating a solid financial position, and forecasts a modest recovery in sales and profits for the fiscal year ending March 31, 2026.

The most recent analyst rating on (JP:6315) stock is a Buy with a Yen2535.00 price target. To see the full list of analyst forecasts on Towa Corporation stock, see the JP:6315 Stock Forecast page.