Renesas Electronics (6723) AI Stock Analysis

• Market Cap: ¥3.44T
• Dividend Yield: 1.28%
• 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: ¥2,100.37
• Price Target Upside: 9.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: ¥2,069.00 ▲(7.90% Upside)

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 (6723) is a leading global semiconductor manufacturer headquartered in Japan, specializing in microcontrollers, analog, power management, and system-on-chip (SoC) solutions. The company serves a wide range of sectors including automotive, industrial, and consumer electronics, providing essential components that enable smart and connected devices. Renesas is particularly known for its focus on automotive applications, offering products that enhance vehicle safety, efficiency, and connectivity.

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: 1917.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 1917.5 is below the 20-day moving average (MA) of 1949.07, above the 50-day MA of 1897.90, and above the 200-day MA of 1897.18, indicating a bullish trend. The MACD of 80.24 indicates Negative momentum. The RSI at 65.94 is Neutral, neither overbought nor oversold. The STOCH value of 80.25 is Negative, 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
7735	77 Outperform	$1.17T	13.38	21.73%	2.36%	11.29%	11.38%
6857	75 Outperform	$15.15T	58.44	47.37%	0.24%	63.36%	149.43%
6146	73 Outperform	$5.62T	44.49	25.78%	0.77%	13.45%	20.37%
8035	73 Outperform	$15.94T	29.46	27.73%	1.88%	16.74%	16.03%
6920	67 Neutral	$2.77T	29.28	53.12%	1.06%	32.51%	57.19%
6723	64 Neutral	¥3.44T	-68.58	-2.51%	1.28%	-10.97%	-118.87%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Renesas Electronics Corporate Events

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.

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.