Renesas Electronics Corporation (JP:6723)
:6723
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Renesas Electronics
(6723)
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Rating:56Neutral
Price Target:
¥2,497.00
▲(4.87% Upside)
Action:ReiteratedDate:03/26/26
The score is primarily supported by solid cash generation and a generally resilient balance sheet, but is held back by the 2025 profitability hit (including a GAAP loss/impairment) and weak technical momentum. Valuation is also less attractive due to negative P/E, partially offset by constructive near-term guidance and AI/data-center growth commentary from the earnings call.
Positive Factors
Strong cash generation
Consistent positive operating and free cash flow provides durable financial flexibility for capex, R&D, and debt reduction. Over 2–6 months this supports capacity expansion and strategic moves without immediate equity raises, underpinning long-term investment and resilience versus cyclical revenue swings.
Negative Factors
Large GAAP impairment & GAAP net loss
A material impairment and GAAP loss indicate that prior investments or acquired assets underperformed, reducing reported equity and signaling execution or integration risks. Over months this can weaken reported returns, constrain investor confidence, and complicate comparisons of accounting earnings versus cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent positive operating and free cash flow provides durable financial flexibility for capex, R&D, and debt reduction. Over 2–6 months this supports capacity expansion and strategic moves without immediate equity raises, underpinning long-term investment and resilience versus cyclical revenue swings.
Read all positive factors
Renesas Electronics (6723) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥4.31T
Dividend Yield1.31%
Average Volume (3M)11.54M
Price to Earnings (P/E)―
Beta (1Y)1.39
Revenue Growth-10.97%
EPS Growth-118.87%
CountryJP
Employees21,204
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)9.63
Shares Outstanding1,870,614,900
10 Day Avg. Volume12,754,450
30 Day Avg. Volume11,541,726
Financial Highlights & Ratios
PEG Ratio0.61
Price to Book (P/B)1.58
Price to Sales (P/S)2.93
P/FCF Ratio11.11
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥3,318.99Price Target Upside39.39% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)191.31
Revenue Forecast (FY)¥1.49T
Renesas Electronics Business Overview & Revenue Model
Company Description
Renesas Electronics Corporation researches, develops, designs, manufactures, sells, and services semiconductors in Japan, China, North America, Europe, rest of Asia, and internationally. The company operates through Automotive Business and Industr...
How the Company Makes Money
Renesas primarily makes money by selling semiconductor products (integrated circuits) to equipment manufacturers and tiered supply chains—especially automotive OEMs and Tier 1 suppliers, and industrial equipment makers—through direct sales and dis...
Renesas Electronics Earnings Call Summary
Earnings Call Date:Feb 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Neutral
Mixed/Neutral: The call highlighted strong Q4 results, solid margins, a constructive Q1 revenue outlook, a strategic ~$3.0 billion timing-business transaction, and robust AI/data-center demand that could drive double-digit growth in AI-related businesses. Offsetting these positives are a modest full-year revenue decline (-2.2% YoY), a large GAAP impairment (JPY 237.6 billion) producing a GAAP loss, segment-level margin deterioration (Industrial/IIoT), potential DRAM supply risks, and higher inventory targets that will consume working capital. Given strong operational momentum and strategic moves balanced against material one-time impairments and demand/supply uncertainties, the overall tone is balanced.Positive Updates
Strong Q4 Financial Performance
Q4 revenue JPY 350.9 billion; gross profit margin 59.3%; operating profit ~JPY 108 billion (operating margin 30.8%); EBITDA JPY 127.8 billion; net profit JPY 90 billion. Quarter-on-quarter revenue +3.2% and gross margin improvement +2.3 percentage points.
Negative Updates
Full-Year Revenue Decline and Volume Headwinds
FY2025 revenue declined ~2.2% year-over-year. Management cited sales-volume decreases that partly offset manufacturing cost savings, and operating profit margin worsened ~0.2 percentage points YoY.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Q4 Financial Performance
Q4 revenue JPY 350.9 billion; gross profit margin 59.3%; operating profit ~JPY 108 billion (operating margin 30.8%); EBITDA JPY 127.8 billion; net profit JPY 90 billion. Quarter-on-quarter revenue +3.2% and gross margin improvement +2.3 percentage points.
Read all positive updates
Company Guidance
Renesas guided Q1 FY26 with a midpoint revenue of JPY 375.0 billion, gross margin 58.5% and operating margin 32.0% on FX assumptions of JPY 154/USD and JPY 182/EUR, implying Q‑on‑Q revenue growth of 6.9% (inclusive FX +1.9%, excluding FX +4.9%) and a gross‑margin decline of 0.8 percentage points; management noted FX sensitivity such that at JPY 100/USD and JPY 120/EUR the implied OP margin would be about 25.7%. They expect fab utilization around ~50% (Q4 near 50%; Q1 slightly above 50%), plan capacity‑expanding CapEx in Q1, will raise in‑house days of inventory (DOI) target from 120 to 150 days (Q4 DOI 117 days) while channel weeks of inventory were 7.5 weeks, and anticipate higher channel inventory in Q1 to support brisk orders. For the year they gave no firm full‑year numeric guidance but reiterated expectations of strong AI/data‑center growth (management said AI business could roughly double year‑on‑year), moderate/solid growth in Automotive, Industrial and IIoT (with DRAM shortages a possible H2 headwind), and noted the $3.0 billion timing‑business transaction (timing business ~$207–208m revenue in FY24/FY25) expected to close by year‑end; FY25 reported non‑GAAP results were revenue JPY 1,318.5bn, gross 57.6%, operating profit JPY 386.9bn (29.3%), EBITDA JPY 464.1bn, net profit JPY 329.3bn (Q4: rev JPY 350.9bn, gross 59.3%, OP JPY 108bn/30.8%, EBITDA JPY 127.8bn, net JPY 90bn), while GAAP showed a net loss JPY 51.8bn including impairment losses of JPY 237.6bn; dividend guidance was JPY 28 per share.Renesas Electronics Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
64
Positive
Cash Flow
72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.32T | 1.35T | 1.47T | 1.50T | 993.91B |
| Gross Profit | 636.22B | 752.40B | 834.63B | 859.63B | 544.34B |
| EBITDA | 404.42B | 340.96B | 459.96B | 516.82B | 307.18B |
| Net Income | -51.76B | 219.08B | 337.09B | 256.63B | 119.54B |
Balance Sheet | |||||
| Total Assets | 4.18T | 4.49T | 3.17T | 2.81T | 2.43T |
| Cash, Cash Equivalents and Short-Term Investments | 295.90B | 229.25B | 434.68B | 336.07B | 221.92B |
| Total Debt | 1.21T | 1.42T | 667.66B | 770.01B | 831.32B |
| Total Liabilities | 1.73T | 1.95T | 1.16T | 1.28T | 1.27T |
| Stockholders Equity | 2.44T | 2.54T | 2.00T | 1.53T | 1.15T |
Cash Flow | |||||
| Free Cash Flow | 347.87B | 195.59B | 402.98B | 407.24B | 261.76B |
| Operating Cash Flow | 437.02B | 325.48B | 491.20B | 473.38B | 298.70B |
| Investing Cash Flow | -124.69B | -1.28T | -267.49B | -97.52B | -663.13B |
| Financing Cash Flow | -253.84B | 692.35B | -175.82B | -288.82B | 349.60B |
Renesas Electronics Technical Analysis
Negative
2381.00
Price Trends
2655.75
Negative
2338.51
Positive
2073.01
Positive
Market Momentum
-87.16
Positive
40.41
Neutral
25.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6723, the sentiment is Negative. The current price of 2381 is below the 20-day moving average (MA) of 2608.65, below the 50-day MA of 2655.75, and above the 200-day MA of 2073.01, indicating a neutral trend. The MACD of -87.16 indicates Positive momentum. The RSI at 40.41 is Neutral, neither overbought nor oversold. The STOCH value of 25.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6723.
Renesas Electronics Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | ¥138.94B | 2.91 | 1.86% | 0.76% | -16.19% | -50.21% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
56 Neutral | ¥4.31T | -74.70 | -2.51% | 1.31% | -10.97% | -118.87% | |
56 Neutral | ¥9.61B | -25.29 | ― | 1.86% | -7.54% | ― | |
55 Neutral | ¥146.94B | -13.62 | ― | ― | -51.82% | -96.08% | |
52 Neutral | ¥1.33T | 47.56 | -4.26% | 2.30% | 0.04% | -323.26% | |
45 Neutral | ¥18.61B | 15.70 | ― | 3.98% | -6.84% | 50.71% |
* Technology Sector Average
JP:6723
Renesas Electronics
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Renesas Electronics Corporate Events
Renesas to Divest Timing Business to SiTime in $3 Billion Deal and Forge Strategic Partnership
Feb 5, 2026
Renesas Electronics has agreed to transfer its timing business to SiTime in a $3 billion deal composed equally of cash and common stock, covering a unit that generated $201.4 million in revenue in fiscal 2024 and provides high-performance clock ge...
Renesas Forecasts Higher Revenue and Margins for March 2026 Quarter
Feb 5, 2026
Renesas Electronics has issued its non-GAAP consolidated forecast for the quarter ending March 31, 2026, projecting revenue between ¥367.5 billion and ¥382.5 billion, up from ¥308.8 billion a year earlier, with gross margin expected...
Renesas Swings to Loss in 2025 on Automotive Weakness and Wolfspeed-Linked Charge
Feb 5, 2026
Renesas Electronics reported a 2.0% year-on-year decline in consolidated revenue to 1,321.2 billion yen for the year ended December 31, 2025, as weaker demand in its Automotive Business outweighed growth in its Industrial, Infrastructure and IoT o...
Renesas Swings to 2025 Net Loss but Maintains Dividend and Signals Margin Resilience
Feb 5, 2026
Renesas Electronics reported a decline in full-year 2025 performance, with revenue slipping 2.0% year-on-year to ¥1.32 trillion and operating profit falling 9.8% to ¥201.2 billion, while the company swung from a ¥219.1 billion profi...
Renesas to Sell Timing Business to SiTime in US$3 Billion Deal and Forge MEMS Partnership
Feb 4, 2026
Renesas Electronics will transfer its timing business, which generated about 2.3% of group revenue and 7.1% of operating profit in fiscal 2024, to SiTime Corporation for roughly US$3.0 billion in a mix of cash and SiTime stock, with completion exp...
Renesas Denies Reaching Decision on Reported Sale of Timing Business to SiTime
Feb 4, 2026
Renesas Electronics has responded to recent media reports claiming that it plans to sell its timing business to SiTime, stating that the articles are not based on any official announcement by the company. Renesas confirmed that discussions with Si...
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.