Tera Probe, Inc. (6627) AI Stock Analysis

• Market Cap: ¥67.32B
• Dividend Yield: 1.85%
• Average Volume (3M): 93.21K
• Price to Earnings (P/E): 21.7
• Beta (1Y): 1.91
• Revenue Growth: 3.60%
• EPS Growth: -17.45%
• Country: JP
• Employees: 1,042
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 96.92
• Shares Outstanding: 9,282,500
• 10 Day Avg. Volume: 113,350
• 30 Day Avg. Volume: 93,213
• PEG Ratio: -0.52
• Price to Book (P/B): 0.70
• Price to Sales (P/S): 0.71
• P/FCF Ratio: 9.72
• 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: 74 Outperform
• Price Target: ¥8,534.00 ▲(35.46% Upside)

The score is driven primarily by solid financial performance (strong margins and steady growth), supported by a clear bullish technical trend. This is tempered by weakening free cash flow and overbought technical readings, alongside only moderate valuation support (P/E 21.36 and 1.44% yield).

Positive Factors

Strong margins

Sustained gross and net margins alongside high EBIT/EBITDA indicate durable operational efficiency and pricing power in Tera Probe's semiconductor niche. Robust margins support reinvestment, R&D and shareholder returns, providing resilience through cyclical industry periods.

Improving ROE and equity base

An improving ROE and near-50% equity ratio signal effective use of shareholder capital and a strong balance sheet cushion. This structural financial strength enhances capacity for strategic investments and buffers against semiconductor cyclical downturns over the medium term.

Strong operating cash generation

Very strong operating cash conversion relative to net income shows the business reliably turns profits into cash. This durable cash generation underpins funding for capex, maintenance of operations and potential shareholder distributions without over-reliance on external financing.

Negative Factors

Material free cash flow decline

A 36.5% drop in free cash flow materially reduces internal funding for capex, R&D and strategic initiatives. Over several quarters this can constrain growth investments, force prioritization of projects, or increase reliance on external financing, weakening strategic flexibility.

Declining earnings / EPS weakness

A decline in net income and materially negative EPS growth indicate pressure on profitability drivers. If sustained, this erodes return metrics and limits retained earnings for reinvestment, increasing risk that operational or market challenges are impacting long-term earnings power.

Substantial total debt despite moderate leverage

Although debt-to-equity is moderate, the firm notes total debt is substantial. With weakening free cash flow and cyclicality in semiconductors, elevated absolute debt levels could constrain financial flexibility, raise interest burdens, and limit ability to fund growth without raising capital.

Tera Probe, Inc. Business Overview & Revenue Model

Company Description

Tera Probe, Inc. engages in wafer testing, final testing, and test engineering business in Japan and internationally. The company provides testing and test related services for various semiconductor devices, including DRAM, SoC, CPU, image sensors, and analog devices; and test program cross-platform conversion services for debugging, as well as test patterns conversion services to work with testers. It also offers design and development support services, and mass production for various probe cards; and provides card evaluation and parallelism testing services. The company was founded in 2005 and is headquartered in Yokohama, Japan. Tera Probe, Inc. is a subsidiary of Powertech Technology Inc.

How the Company Makes Money

Tera Probe, Inc. generates revenue through the sale of its semiconductor testing equipment and related software services. The company primarily makes money by providing automated test equipment to semiconductor manufacturers, which includes not only the initial sale of the hardware but also ongoing revenue from maintenance contracts, software updates, and technical support services. Key revenue streams include direct sales to major semiconductor firms, partnerships with electronics manufacturers for tailored testing solutions, and the licensing of its proprietary testing technology. Additionally, Tera Probe benefits from long-term contracts with established clients, which provide a steady flow of income and contribute to its overall financial stability.

Tera Probe, Inc. Financial Statement Overview

Summary

Strong profitability and steady revenue growth support the score, with manageable leverage. Offsetting factors include a slight net income decline and a notable drop in free cash flow, which increases risk to reinvestment capacity.

Income Statement

Tera Probe, Inc. demonstrates strong profitability with a stable gross profit margin of 25.9% and a solid net profit margin of 9.5% for 2024. The company has shown consistent revenue growth, with a growth rate of 4.8% from 2023 to 2024. Both EBIT and EBITDA margins are robust at 18.7% and 54.8% respectively, indicating efficient operations. However, there was a slight decline in net income from 2023, which could be an area of concern if continued.

Balance Sheet

The balance sheet reflects a healthy financial structure with a debt-to-equity ratio of 0.37, suggesting moderate leverage. Return on equity improved to 9.4% in 2024, showcasing effective use of equity funds. The equity ratio stands at 49.6%, indicating a strong equity base. However, the total debt remains substantial, which could impact financial flexibility if not managed carefully.

Cash Flow

Cash flows are stable with an operating cash flow to net income ratio of 4.98, indicating strong cash generation relative to net income. Free cash flow has decreased by 36.5% from 2023 to 2024, which may limit reinvestment capabilities. The free cash flow to net income ratio is 0.77, suggesting that while cash flow covers net income, there is room for improvement in cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	37.25B	37.11B	35.40B	33.21B	25.94B	18.34B
Gross Profit	9.48B	9.60B	9.68B	9.38B	6.17B	2.08B
EBITDA	19.92B	21.53B	21.18B	19.61B	14.59B	9.76B
Net Income	2.98B	3.51B	4.09B	3.13B	1.79B	238.65M
Balance Sheet
Total Assets	85.75B	75.36B	69.44B	72.26B	62.96B	54.74B
Cash, Cash Equivalents and Short-Term Investments	14.66B	11.69B	11.80B	15.69B	11.22B	11.11B
Total Debt	18.47B	13.77B	14.13B	20.99B	19.49B	19.36B
Total Liabilities	30.12B	21.43B	20.43B	30.06B	26.40B	23.70B
Stockholders Equity	38.33B	37.40B	34.12B	29.58B	26.19B	23.25B
Cash Flow
Free Cash Flow	0.00	2.71B	4.26B	3.93B	1.56B	2.28B
Operating Cash Flow	0.00	17.47B	18.33B	17.03B	11.42B	9.70B
Investing Cash Flow	0.00	-14.61B	-14.66B	-12.19B	-9.65B	-5.36B
Financing Cash Flow	0.00	-3.56B	-9.62B	-382.90M	-2.01B	-2.98B

Tera Probe, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6300.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6627, the sentiment is Positive. The current price of 6300 is below the 20-day moving average (MA) of 6956.00, below the 50-day MA of 6344.19, and above the 200-day MA of 4473.42, indicating a bullish trend. The MACD of 343.83 indicates Negative momentum. The RSI at 64.32 is Neutral, neither overbought nor oversold. The STOCH value of 72.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6627.

Tera Probe, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7609	81 Outperform	¥53.76B	10.32	―	2.87%	10.24%	61.61%
6627	74 Outperform	¥67.32B	21.65	―	1.85%	3.60%	-17.45%
6855	74 Outperform	¥60.60B	15.91	―	1.72%	36.31%	101.77%
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%
6625	60 Neutral	¥47.77B	456.30	―	4.32%	-44.89%	-97.21%