Renesas Electronics (6723) AI Stock Analysis

• Market Cap: $2.95T
• Dividend Yield: 1.68%
• Average Volume (3M): 10.54M
• Price to Earnings (P/E): 20.5
• Beta (1Y): 1.37
• Revenue Growth: -12.38%
• EPS Growth: -133.53%
• Country: JP
• Employees: 21,204
• Sector: Technology
• Sector Strength: 82
• Industry: Semiconductors
• EPS (TTM): -111.82
• Shares Outstanding: 1,870,614,900
• 10 Day Avg. Volume: 7,002,400
• 30 Day Avg. Volume: 10,542,626
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.47
• Enterprise Value/Revenue: 3.41
• Enterprise Value/Gross Profit: 7.10
• Enterprise Value/Ebitda: 11.35
• 1Y Price Target: $2,421.88
• Price Target Upside: 45.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 60 Neutral
• Price Target: ¥1,911.00 ▲(14.95% Upside)

Renesas Electronics' overall stock score is primarily impacted by its financial performance challenges, including negative profitability and revenue contraction. Technical analysis indicates bearish momentum, and valuation metrics suggest potential overvaluation due to negative earnings. The earnings call provided some positive insights, particularly in revenue and gross margin performance, but was offset by significant financial losses and uncertainties in the automotive sector.

Positive Factors

Automotive Segment Growth

The automotive segment experienced a 10.3% year-over-year increase in revenue, showing strong performance in this area.

Strategic Goals

Renesas has ambitious goals for 2030, aiming to become a top 3 embedded semiconductor solution provider, achieve 20x revenue growth, and increase corporate value sixfold.

Negative Factors

Demand Recovery Risks

Renesas faces risks from potential slower-than-expected demand recovery, particularly in the automotive sector, and intense competition from global players.

Earnings Performance

3Q24 EBITDA declined by 31.1% year-over-year, driven by a 9% revenue drop, falling short of expectations.

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 Electronics generates revenue primarily through the sale of its semiconductor products. The company's microcontrollers and microprocessors are widely used in automotive and industrial applications, which are significant revenue drivers. Renesas also earns money from the sale of analog and power devices, catering to sectors such as telecommunications and home electronics. Furthermore, the company's system-on-chip products, which integrate multiple functionalities onto a single chip, are in demand for their efficiency and performance. Renesas maintains strategic partnerships and collaborations with key players in the technology and automotive sectors, which help in the co-development and sales of advanced solutions, thereby contributing to its revenue streams. These collaborations often involve long-term supply agreements, providing a stable income flow and enhancing the company's market position.

Renesas Electronics Financial Statement Overview

Summary

Renesas Electronics faces challenges in profitability and revenue growth, as reflected in the TTM data. While operational efficiency is evident through reasonable EBIT and EBITDA margins, the negative net income impacts overall financial health. The balance sheet remains stable with moderate leverage, but the negative return on equity is concerning. Cash flow management shows some resilience, but improvements are necessary to ensure long-term sustainability. The company needs to address revenue contraction and profitability issues to enhance financial performance.

Income Statement

Renesas Electronics shows a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue and profitability, with a negative net profit margin of -7.54%. The gross profit margin remains healthy at 48.09%, but the revenue growth rate is negative, reflecting a contraction in sales. The EBIT and EBITDA margins are reasonable, suggesting operational efficiency, but the overall profitability is impacted by the net loss.

Balance Sheet

The balance sheet of Renesas Electronics is relatively stable, with a debt-to-equity ratio of 0.65 in the TTM, indicating moderate leverage. The equity ratio is solid, reflecting a strong capital base. However, the return on equity is negative, driven by the net loss, which is a concern for shareholder returns. The company maintains a healthy asset base, but profitability issues need addressing.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth, with a negative rate of -2.15% in the TTM. The operating cash flow to net income ratio is 0.65, indicating that operating cash flows are not fully covering the net loss. The free cash flow to net income ratio is positive, suggesting some level of cash generation despite profitability challenges. Overall, cash flow management needs improvement to support financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.27T	1.35T	1.47T	1.50T	994.42B	715.67B
Gross Profit	611.80B	749.80B	834.33B	853.99B	496.40B	335.69B
EBITDA	382.52B	433.70B	589.90B	559.70B	299.85B	214.29B
Net Income	-95.89B	219.08B	337.09B	256.62B	119.54B	45.63B
Balance Sheet
Total Assets	3.87T	4.49T	3.17T	2.81T	2.41T	1.61T
Cash, Cash Equivalents and Short-Term Investments	211.11B	238.49B	434.68B	342.76B	222.66B	220.39B
Total Debt	1.33T	1.40T	667.66B	755.74B	814.09B	679.74B
Total Liabilities	1.84T	1.95T	1.16T	1.27T	1.24T	989.32B
Stockholders Equity	2.03T	2.54T	2.00T	1.53T	1.16T	616.70B
Cash Flow
Free Cash Flow	213.01B	210.59B	367.50B	391.13B	255.04B	185.70B
Operating Cash Flow	321.88B	340.48B	496.63B	479.32B	307.38B	223.89B
Investing Cash Flow	-1.06T	-1.28T	-267.49B	-97.52B	-663.13B	-40.16B
Financing Cash Flow	703.85B	677.35B	-181.25B	-294.77B	340.92B	-104.47B

Renesas Electronics Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1662.50
• 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:6723, the sentiment is Negative. The current price of 1662.5 is below the 20-day moving average (MA) of 1762.37, below the 50-day MA of 1818.28, and below the 200-day MA of 1967.99, indicating a bearish trend. The MACD of -36.85 indicates Positive momentum. The RSI at 33.93 is Neutral, neither overbought nor oversold. The STOCH value of 7.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6723.

Renesas Electronics Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$35.55B	8.91	-10.55%	1.87%	8.47%	-8.26%
6723	60 Neutral	$2.95T	20.48	-4.72%	1.68%	-12.38%	-133.53%
ADTTF	―	$57.29B	37.16	44.94%	0.33%	―	―
DINRF	―	$6.68B	11.32	24.92%	2.74%	―	―
DISPF	―	$28.13B	33.93	28.07%	1.07%	―	―
LSRCF	―	$9.57B	16.86	47.47%	2.09%	―	―
TOELF	―	$63.57B	17.22	29.80%	―	―	―

Renesas Electronics Corporate Events

Renesas Electronics Establishes New U.S. Subsidiary to Boost Digitalization Efforts

Renesas Electronics has announced the establishment of a new subsidiary in the United States to serve as a holding company for its Software & Digitalization business. This move is part of Renesas’ strategy to strengthen its position in the digitalization sector, following its acquisition of Altium Limited and Part Analytics, Inc. The new subsidiary will consolidate the shares of its related subsidiaries, enhancing governance and operational efficiency, and allowing for flexible business development and resource allocation. Although the new subsidiary will be a specified subsidiary of Renesas, it is not expected to have a material impact on the company’s financial results for the fiscal year ending December 31, 2025.

The most recent analyst rating on (JP:6723) stock is a Buy with a Yen2700.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.

Renesas Records 235 Billion Yen Loss Due to Wolfspeed Restructuring

Renesas Electronics Corporation announced a recorded loss of 235 billion yen due to a restructuring support agreement with Wolfspeed, following a Chapter 11 filing by Wolfspeed in the U.S. The loss has been accounted for in Renesas’ financial results for the second quarter of 2025, potentially impacting its financial performance and stakeholder interests.

The most recent analyst rating on (JP:6723) stock is a Buy with a Yen2700.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.

Renesas Electronics Highlights Non-GAAP Measures in 2Q 2025 Report

Renesas Electronics has released its second-quarter 2025 financial presentation, highlighting the use of non-GAAP financial measures to provide a clearer view of its ongoing business performance. By reporting quarterly forecasts instead of annual ones, the company aims to offer more timely insights into its financial health and strategic direction.

The most recent analyst rating on (JP:6723) stock is a Buy with a Yen2700.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.

Renesas Electronics Announces Financial Forecasts Amid Market Volatility

Renesas Electronics has announced its consolidated financial forecasts for the nine months ending September 30, 2025, reflecting the challenges of predicting outcomes in the volatile semiconductor market. The company provides these forecasts in a non-GAAP format to offer clearer insights into its business performance, with revenue expected to range between 955,914 and 970,914 million yen. This announcement highlights Renesas’s strategic approach to maintaining transparency and adaptability in a competitive industry landscape.

The most recent analyst rating on (JP:6723) stock is a Buy with a Yen2700.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.

Renesas Electronics Reports Significant Financial Decline in Q2 2025

Renesas Electronics reported a significant decline in its financial performance for the second quarter ending June 30, 2025, with revenue dropping by 10.7% compared to the previous year. The company faced a substantial loss, with a profit before tax of negative 169,288 million yen, indicating challenges in its operational efficiency and market conditions.

The most recent analyst rating on (JP:6723) stock is a Buy with a Yen2700.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.

Renesas Electronics Amends Shelf Registration Statement for Stock Issuance

Renesas Electronics Corporation announced an amendment to its Shelf Registration Statement for the issuance of new shares or disposal of treasury shares, linked to the restricted stock units to be granted under its stock compensation plan. This amendment, prompted by the filing of an extraordinary report, changes the effective date of the Shelf Registration Statement, potentially impacting the company’s financial operations and stakeholder interests.

The most recent analyst rating on (JP:6723) stock is a Buy with a Yen2700.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.

Renesas Electronics Files Shelf Registration for Stock Compensation Plan

Renesas Electronics announced the filing of a Shelf Registration Statement for issuing new shares or disposing of treasury shares to grant restricted stock units (RSUs) to employees under its stock compensation plan. This move is aimed at aligning employee incentives with company performance, potentially impacting employee retention and motivation, while also affecting the company’s financial strategies and shareholder interests.

The most recent analyst rating on (JP:6723) stock is a Buy with a Yen2600.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.

Renesas Electronics Faces Financial Loss Amid Wolfspeed Restructuring

Renesas Electronics has entered into a Restructuring Support Agreement with Wolfspeed, Inc. to address Wolfspeed’s financial challenges, converting a $2.062 billion deposit into convertible notes, common stock, and warrants. This move is expected to result in a significant loss for Renesas, estimated at approximately 250 billion yen, impacting its financial statements for the first half of 2025, but it aims to strengthen its position in the semiconductor industry by acquiring a substantial stake in Wolfspeed.

The most recent analyst rating on (JP:6723) stock is a Buy with a Yen2700.00 price target. To see the full list of analyst forecasts on Renesas Electronics stock, see the JP:6723 Stock Forecast page.