Renesas Electronics (6723) AI Stock Analysis

• Market Cap: ¥4.18T
• Dividend Yield: 1.31%
• Average Volume (3M): 11.54M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.31
• Revenue Growth: -10.97%
• EPS Growth: -118.87%
• Country: JP
• Employees: 21,204
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 59.06
• Shares Outstanding: 1,870,614,900
• 10 Day Avg. Volume: 12,754,450
• 30 Day Avg. Volume: 11,541,726
• PEG Ratio: -0.47
• Price to Book (P/B): 1.44
• Price to Sales (P/S): 2.71
• P/FCF Ratio: 17.38
• 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: ¥2,399.37
• Price Target Upside: 5.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: ¥2,069.00 ▼(-9.27% Downside)

Renesas Electronics' overall stock score is driven primarily by its strong technical indicators and positive earnings call sentiment, which highlight growth opportunities in AI and data center segments. However, the score is tempered by financial performance challenges, including declining revenue and profitability, and a negative P/E ratio affecting valuation. The company's robust cash flow management and operational efficiency provide a foundation for potential recovery.

Positive Factors

AI and Data Center Growth

Renesas' focus on AI and data center segments positions it well for future growth, leveraging strong demand and potential market share gains.

Cash Flow Management

Strong cash flow management enhances Renesas' ability to invest in growth opportunities and maintain financial stability.

IIoT Segment Growth

Growth in the IIoT segment indicates expanding market opportunities, supporting Renesas' long-term revenue diversification.

Negative Factors

Declining Revenue

Declining revenue reflects challenges in maintaining sales momentum, which could impact long-term profitability and market position.

Automotive Segment Challenges

Challenges in the automotive segment, particularly in China, may hinder Renesas' growth in a key market, affecting overall performance.

Gross Margin Pressure

Pressure on gross margins due to mix deterioration and increased expenses could reduce profitability and financial flexibility.

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 Industrial/Infrastructure/IoT Business segments. It offers microcontrollers (MCUs) and microprocessors; amplifiers, audio and video, data converters, power line communication, and switches and multiplexer products; battery and power management, power devices, sensors, video and display, wireless power, system-on-chips, and MCU products; and specific clocks, clock distribution and generation, jitter attenuators, and crystal oscillator clock ICs and clock timing solutions. The company also provides buffers, wireless modules, data compression, industrial Ethernet, IO-link line driver, memory interface, optical interconnect, photocouplers/optocouplers, power line communication, signal integrity, telecom datacom and interface, USB switches and hubs, and wireless communications products. In addition, it offers bus switches, first-in, first-out, memory interface, legacy memory interface, multi-port and SRAM memory, and standard logic products; and battery management, DC converters and power modules, discrete power devices, linear regulators, MOSFET and motor drivers, multi-channel power management ICs, USB type-C and power delivery, and wireless power. Further, the company provides modulators and demodulators, transistor arrays, and variable gain amplifiers, as well as RF amplifiers, attenuators, mixers, and synthesizers; and environmental, flow, light and proximity, position, biosensors, and temperature sensor products, as well as senor signal conditioners products. It serves automotive, communication and computing infrastructure, consumer electronics, industrial, Internet of Things, medical and healthcare, and power and energy industries. The company was incorporated in 2002 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Renesas generates revenue primarily through the sale of semiconductor products, with microcontrollers and automotive solutions being among its key offerings. The company's revenue model is driven by the demand for electronic components in various industries, particularly in the growing automotive and IoT sectors. Key revenue streams include the sale of integrated circuits (ICs) and other semiconductor devices, which are utilized in applications such as automotive control systems, industrial automation, and consumer electronics. Additionally, Renesas has formed strategic partnerships and collaborations with major automotive manufacturers and technology companies, enhancing its market position and driving sales. The company also benefits from a robust research and development pipeline, enabling it to innovate and capture emerging market opportunities, thus contributing to its overall earnings.

Renesas Electronics Financial Statement Overview

Summary

Renesas Electronics faces challenges with declining revenue and profitability, as evidenced by negative net income and a negative net profit margin. However, the company maintains operational efficiency with a strong EBIT margin and robust cash flow management, which are positive indicators for future recovery. The balance sheet remains stable with moderate leverage, but the negative return on equity highlights the need for improved profitability.

Income Statement

Renesas Electronics has experienced a decline in revenue over the TTM period, with a negative revenue growth rate of -7.8%. The company also reported a negative net profit margin of -3.98%, indicating a loss. However, the EBIT margin remains relatively strong at 17.6%, suggesting operational efficiency despite the net loss.

Balance Sheet

The company's debt-to-equity ratio is moderate at 0.57, indicating a balanced approach to leveraging. However, the return on equity is negative at -2.20%, reflecting the net loss. The equity ratio is stable, suggesting a solid asset base relative to equity.

Cash Flow

Renesas Electronics shows strong cash flow management with a significant free cash flow growth rate of 37.63% in the TTM period. The operating cash flow to net income ratio is robust at 0.83, indicating good cash generation relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.26T	1.35T	1.47T	1.50T	994.42B	715.67B
Gross Profit	615.01B	749.80B	834.33B	853.99B	496.40B	335.69B
EBITDA	421.18B	433.70B	589.90B	611.61B	299.85B	214.29B
Net Income	-50.26B	219.08B	337.09B	256.62B	119.54B	45.63B
Balance Sheet
Total Assets	4.01T	4.49T	3.17T	2.81T	2.41T	1.61T
Cash, Cash Equivalents and Short-Term Investments	238.44B	238.49B	434.68B	342.76B	222.66B	220.39B
Total Debt	1.28T	1.42T	667.66B	755.74B	814.09B	679.74B
Total Liabilities	1.77T	1.95T	1.16T	1.27T	1.24T	989.32B
Stockholders Equity	2.24T	2.54T	2.00T	1.53T	1.16T	616.70B
Cash Flow
Free Cash Flow	293.18B	210.59B	367.50B	391.13B	255.04B	185.70B
Operating Cash Flow	388.00B	340.48B	496.63B	479.32B	307.38B	223.89B
Investing Cash Flow	-135.16B	-1.28T	-267.49B	-97.52B	-663.13B	-40.16B
Financing Cash Flow	-268.08B	677.35B	-181.25B	-294.77B	340.92B	-104.47B

Renesas Electronics Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2280.50
• 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:6723, the sentiment is Positive. The current price of 2280.5 is above the 20-day moving average (MA) of 2139.35, above the 50-day MA of 1989.23, and above the 200-day MA of 1848.29, indicating a bullish trend. The MACD of 82.20 indicates Negative momentum. The RSI at 64.71 is Neutral, neither overbought nor oversold. The STOCH value of 68.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6723.

Renesas Electronics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6920	79 Outperform	¥2.89T	29.21	53.12%	1.11%	32.51%	57.19%
7735	78 Outperform	¥1.46T	16.00	21.73%	2.29%	11.29%	11.38%
6857	75 Outperform	¥15.08T	56.33	47.37%	0.25%	63.36%	149.43%
8035	73 Outperform	$17.49T	31.02	27.73%	1.79%	16.74%	16.03%
6146	72 Outperform	$6.04T	47.69	25.78%	0.79%	13.45%	20.37%
6723	64 Neutral	¥4.18T	-80.89	-2.51%	1.31%	-10.97%	-118.87%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Renesas Electronics Corporate Events

Renesas Brings Forward Repayment on ¥240 Billion Loan Facilities to 2025

Renesas Electronics has amended the terms of its existing 240 billion yen term loan facilities, comprising a 96 billion yen syndicated loan and a 144 billion yen facility with the Japan Bank for International Cooperation, by bringing forward the repayment date from the end of December 2026 to December 30, 2025. The company says the change is intended to support financial soundness and maintain a stable funding base while accommodating early repayment under the contractual terms, and it does not expect any material impact on its consolidated performance for fiscal 2025, suggesting limited immediate effects for shareholders and creditors while underscoring prudent balance-sheet management.

The most recent analyst rating on (JP:6723) stock is a Hold with a Yen2069.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.

Renesas Electronics Releases 2025 Financial Forecasts Amid Market Volatility

Renesas Electronics has announced its consolidated financial forecasts for the full year ending December 31, 2025, highlighting the challenges of predicting outcomes due to the volatile semiconductor market. The company provides non-GAAP figures to offer clearer insights into its business performance, with revenue expected to range between 1,300,115 and 1,315,115 million yen, and a gross margin of 57.0% and operating margin of 28.5%. These forecasts reflect Renesas’ strategic positioning in the semiconductor industry, aiming to maintain its competitive edge in a rapidly evolving market.

The most recent analyst rating on (JP:6723) stock is a Buy with a Yen2300.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.

Renesas Electronics Reports Decline in Q3 2025 Financial Results

Renesas Electronics reported a significant decline in its financial performance for the third quarter ending September 30, 2025, with an 8.2% drop in revenue compared to the previous year. The company also experienced a substantial decrease in operating profit and reported a net loss, reflecting challenges in maintaining profitability. Despite these setbacks, Renesas maintains a stable financial position with a high ratio of equity attributable to owners. The company has not announced any changes to its cash dividend forecasts and continues to provide non-GAAP financial forecasts to offer clearer insights into its business performance.

The most recent analyst rating on (JP:6723) stock is a Buy with a Yen2300.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.