Socionext Inc. (6526) AI Stock Analysis

• Market Cap: ¥370.98B
• Dividend Yield: 2.29%
• Average Volume (3M): 14.71M
• Price to Earnings (P/E): 46.0
• Beta (1Y): 2.00
• Revenue Growth: -13.21%
• EPS Growth: -54.83%
• Country: JP
• Employees: 2,534
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 15.52
• Shares Outstanding: 179,954,010
• 10 Day Avg. Volume: 13,799,260
• 30 Day Avg. Volume: 14,706,146
• PEG Ratio: -0.62
• Price to Book (P/B): 2.32
• Price to Sales (P/S): 1.69
• P/FCF Ratio: 16.67
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: ¥2,165.00 ▼(-1.12% Downside)

The score is supported primarily by a very strong, low-leverage balance sheet, but it is held back by weakened near-term profitability and negative TTM free cash flow. Technicals are notably bearish with price below all major moving averages and negative momentum, and valuation is relatively expensive given the high P/E despite a moderate dividend yield.

Positive Factors

Balance sheet strength

Extremely low leverage gives the company durable financial flexibility to fund R&D, absorb program timing delays, and pursue opportunistic investments without material refinancing risk. This balance-sheet resilience supports long-term stability through semiconductor cycles.

Fabless, diversified end markets

A fabless model plus end-to-end SoC services across data center, networking, automotive and industrial spreads program risk and keeps fixed capex low. Long product lifecycles in automotive and infrastructure provide durable NRE and recurring production revenue streams.

Historical cash generation

Prior-year operating cash flow and positive free cash flow in 2024–2025 show the business can convert successful programs into meaningful cash. That track record implies the company can fund investments and weather near-term cycles when program ramp timing normalizes.

Negative Factors

Margin compression

Operating and net margins have fallen materially versus prior annual levels, reducing internal reinvestment capacity and making profitability more sensitive to pricing or cost increases. If program mix or pricing pressure persists, lower structural margins could constrain long-term returns.

Negative TTM free cash flow

Negative trailing free cash flow despite reported net income signals weaker cash conversion, likely from working-capital or timing issues. This undermines earnings quality, limits reinvestment/dividend flexibility, and raises funding risk if the trend continues.

Revenue and EPS decline

Revenue growth turned negative in the 2025 annual period and TTM EPS growth deteriorated sharply, pointing to program timing, customer delays, or demand softness. Sustained declines increase execution risk for converting design wins into steady production revenue and margins.

Socionext Inc. Business Overview & Revenue Model

Company Description

Socionext Inc. designs, develops, manufactures, and sells system-on-chip (SoC), and solutions/services centering on SoC worldwide. It offers application specific standard products in the areas of radar sensor, servers, image processing, video processing, digital TV, digital signage, automotive, medical healthcare, HDMI module, and IoT communication. The company also provides custom SoC solutions, as well as development support, subsystem service, IP macro service, design technology, and manufacturing technology package services. It serves the automotive, data center & networking, and smart device sectors. The company was incorporated in 2014 and is headquartered in Yokohama, Japan.

How the Company Makes Money

Socionext Inc. generates revenue primarily through the sale of its semiconductor products, including custom SoCs and application-specific integrated circuits (ASICs). The company operates on a B2B model, providing tailored solutions to manufacturers in various industries, which allows for high-value contracts. Key revenue streams include direct sales to OEMs (original equipment manufacturers) and ODMs (original design manufacturers), as well as licensing fees for technology and intellectual property. Additionally, partnerships with automotive and consumer electronics companies help to secure long-term contracts and collaborations, further stabilizing the company’s revenue base. The increasing demand for advanced semiconductor technology in emerging markets, such as autonomous driving and IoT (Internet of Things), is also a significant factor contributing to Socionext's earnings.

Socionext Inc. Financial Statement Overview

Summary

Strong balance sheet with extremely low leverage supports resilience, but recent results show clear deterioration: TTM margins are much lower than prior annual levels and TTM free cash flow is negative despite positive net income, indicating weaker near-term earnings quality and cash conversion.

Income Statement

Revenue expanded strongly from 2021–2024, but growth turned negative in the 2025 annual period and only modestly positive in TTM (Trailing-Twelve-Months). Profitability also stepped down: TTM net margin (~4.3%) and operating margin (~4.9%) are well below the 2024–2025 annual levels (~10–12% net margin and ~13–16% operating margin), pointing to a recent earnings compression despite still-solid gross margins (mid-to-high 40%s in TTM). Overall, the income statement shows a good long-term trajectory, but weakening recent momentum and margins are clear watch items.

Balance Sheet

The balance sheet is a key strength. Leverage is extremely low (debt-to-equity around ~1% in recent periods, and zero in earlier years), providing significant financial flexibility. Equity remains large relative to assets, and returns on equity have been healthy historically (peaking near ~20% in 2024) though down in TTM (~7.6%), consistent with the recent profitability decline. Net-net, capital structure risk appears low, with performance (not solvency) being the main variable.

Cash Flow

Cash generation has been volatile. Annual operating cash flow was strong in 2024 and 2025, supporting positive free cash flow, but TTM (Trailing-Twelve-Months) free cash flow is negative while net income remains positive—suggesting near-term investment/working-capital pressure. The conversion of operating cash flow relative to net income also weakened sharply in TTM versus the prior annual period, which reduces earnings quality in the near term. Positives include a track record of sizable cash generation in prior years, but the latest TTM reversal lowers confidence.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	185.41B	188.53B	221.25B	192.77B	117.01B	99.75B
Gross Profit	90.22B	103.92B	110.00B	88.84B	58.44B	48.12B
EBITDA	25.91B	41.61B	48.91B	33.79B	17.28B	9.95B
Net Income	7.91B	19.60B	26.13B	19.76B	7.48B	1.47B
Balance Sheet
Total Assets	163.34B	170.31B	186.84B	193.94B	118.43B	104.23B
Cash, Cash Equivalents and Short-Term Investments	43.79B	72.84B	69.74B	45.14B	46.27B	42.66B
Total Debt	1.24B	1.30B	2.04B	1.13B	0.00	0.00
Total Liabilities	34.41B	33.27B	55.82B	84.08B	28.82B	22.56B
Stockholders Equity	128.93B	137.05B	131.02B	109.86B	89.61B	81.57B
Cash Flow
Free Cash Flow	-3.79B	19.11B	41.00B	5.39B	8.81B	6.86B
Operating Cash Flow	11.17B	31.87B	52.88B	18.02B	16.36B	10.70B
Investing Cash Flow	-23.36B	-14.55B	-23.16B	-19.73B	-7.94B	-1.45B
Financing Cash Flow	-14.08B	-13.82B	-6.62B	-333.00M	-458.00M	-410.00M

Socionext Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2189.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6526, the sentiment is Negative. The current price of 2189.5 is below the 20-day moving average (MA) of 2264.42, below the 50-day MA of 2235.02, and below the 200-day MA of 2422.59, indicating a bearish trend. The MACD of -45.08 indicates Positive momentum. The RSI at 35.53 is Neutral, neither overbought nor oversold. The STOCH value of 10.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6526.

Socionext Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6503	72 Outperform	€10.15T	25.32	10.23%	1.19%	4.62%	40.65%
6506	72 Outperform	¥1.28T	34.41	13.26%	1.49%	-2.18%	30.16%
5801	67 Neutral	¥952.30B	27.14	10.06%	1.21%	10.52%	60.75%
6504	64 Neutral	$1.57T	18.82	12.05%	1.50%	5.44%	-5.19%
5803	63 Neutral	¥5.40T	41.68	32.32%	0.91%	27.53%	137.34%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6526	60 Neutral	¥370.98B	45.98	―	2.29%	-13.21%	-54.83%

Socionext Inc. Corporate Events

Socionext Profit Slumps Despite Stable Sales, Keeps Full-Year Outlook and Dividend

Socionext reported consolidated net sales of ¥142.1 billion for the nine months ended December 31, 2025, down 2.2% year-on-year, while operating income dropped 65.1% to ¥7.2 billion and profit attributable to owners of parent fell 71.0% to ¥4.8 billion, reflecting a sharp contraction in profitability despite relatively stable top-line performance. The company’s financial position remains solid with a high equity ratio of 78.9%, and it kept its full-year forecast unchanged, projecting marginally higher annual sales of ¥190.0 billion but a roughly 60–66% decline in profits versus the prior year, signaling continued earnings pressure even as it maintains its planned annual dividend of ¥50 per share and introduces stock-based compensation schemes for executives and employees.

The most recent analyst rating on (JP:6526) stock is a Hold with a Yen2097.00 price target. To see the full list of analyst forecasts on Socionext Inc. stock, see the JP:6526 Stock Forecast page.