Sony (6758) AI Stock Analysis

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Sony

(OTC:6758)

Rating:73Outperform

Price Target:

¥4,099.00

▲(12.61%Upside)

Sony's overall stock score is driven primarily by its strong financial performance, characterized by stable profitability, effective leverage management, and strong cash flows. While technical analysis shows mixed signals, the long-term trend remains positive. Valuation is fair, aligning with industry norms. The absence of earnings call and corporate events data did not impact the score.

Positive Factors

Entertainment Segment Growth

Sony has a series of high-profile game and movie releases in the pipeline, potentially boosting its entertainment segment.

PlayStation Success

Sony showed strong confidence in the competitiveness of PlayStation 5, as superior hardware performance enables a highly immersive experience.

Technological Advancements

The shift to higher density sensors and improved imaging technology is expected to drive growth in Sony's business.

Negative Factors

Bond Sale Losses

Selling USD-denominated bonds is expected to result in losses on sales of USD bonds of ¥65-¥70bn in FY3/26 and FY3/27.

Investment Efficiency

I&SS needs to improve investment efficiency given its FY3/25 ROIC of just 9.8%, highlighting a potential area of concern in financial performance.

Sony (6758) vs. iShares MSCI Japan ETF (EWJ)

Market Cap

$23.16T

Dividend Yield0.53%

Average Volume (3M)14.23M

Price to Earnings (P/E)20.1

Beta (1Y)1.18

Revenue Growth-0.49%

EPS Growth19.71%

CountryJP

Employees113,000

SectorTechnology

Sector Strength88

IndustryConsumer Electronics

Share Statistics

EPS (TTM)32.88

Shares Outstanding6,149,810,500

10 Day Avg. Volume14,825,740

30 Day Avg. Volume14,225,153

Financial Highlights & Ratios

PEG Ratio2.25

Price to Book (P/B)2.05

Price to Sales (P/S)0.00

P/FCF Ratio-49.54

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$4,435.34

Price Target Upside21.85% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering9

Sony Business Overview & Revenue Model

Company DescriptionSony Group Corporation, commonly known as Sony, is a multinational conglomerate corporation headquartered in Tokyo, Japan. It operates in various sectors, including electronics, gaming, entertainment, and financial services. Sony is renowned for its consumer electronics products such as televisions, cameras, and audio equipment. It also has a significant presence in the gaming industry through its PlayStation brand, in the entertainment industry via its motion pictures, television programming, and music businesses, and in financial services through its insurance and banking operations.

How the Company Makes MoneySony generates revenue through multiple business segments. The Electronics Products & Solutions segment provides income from sales of televisions, cameras, audio and video devices, and other consumer electronics. The Game & Network Services segment, driven primarily by the PlayStation brand, generates revenue from hardware sales, game software, network services, and subscription services like PlayStation Plus. The Music segment earns from recorded music, music publishing, and visual media and platform businesses. The Pictures segment brings in revenue through motion picture and television production and distribution. Lastly, the Financial Services segment contributes income through life insurance and non-life insurance, banking operations, and other related financial services. Strategic partnerships, technological innovation, and a diversified portfolio are key factors that contribute to Sony's earnings.

Sony Earnings Call Summary

Earnings Call Date:May 14, 2025

(Q3-2024)

% Change Since: -0.38%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong performance, particularly in the Games & Network Services and Music segments, with record-high income and a positive revision of the full-year forecast. However, challenges were noted in the Pictures and ET&S segments, alongside a decline in operating income in financial services. Despite these challenges, the overall growth and strategic planning suggest optimism.

Q3-2024 Updates

Positive Updates

Record Sales and Operating Income

Consolidated sales excluding the financial services segment increased 7% year-on-year to ¥3,695.7 trillion. Operating income increased 10% to ¥423 billion. Including the financial services segment, sales increased 18% year-on-year to ¥4,409.6 trillion, and operating income increased 1% to ¥469.3 billion, setting a record for the third quarter.

Strong Performance in Games & Network Services

Sales for the quarter increased 16% year-on-year to ¥1,682.3 billion, with operating income increasing 37% year-on-year to ¥118.1 billion, a record high for the third quarter. The number of monthly active users across PlayStation platforms reached 129 million, the highest in PlayStation history.

Music Segment Growth

Sales for the quarter increased 14% year-on-year to ¥481.7 billion, primarily due to higher streaming revenue. Operating income increased 28% year-on-year to ¥97.4 billion.

Upward Revision of Full Year Forecast

Consolidated sales, including the financial services segment, have been upwardly revised 4% from the previous forecast to ¥13.200 trillion. Operating income has been revised upward by 2% to ¥335 billion, and net income has been revised upward by 10% to ¥1.80 trillion.

Negative Updates

Challenges in the Pictures Segment

Operating income in the Pictures segment decreased 18% year-on-year to ¥34 billion due to increased marketing costs for theatrical releases and the impact of production delays from strikes.

ET&S Segment Sales Decline

Sales for the ET&S segment decreased 4% year-on-year to ¥704.5 billion, primarily due to a decrease in unit sales of televisions. The segment faces a severe operating environment, with further fixed cost reduction measures planned.

Decreased Operating Income in Financial Services

Operating income in the financial services segment decreased ¥30.9 billion year-on-year to ¥46.4 billion, largely due to the absence of significant gains related to market fluctuations recorded in the previous fiscal year.

Company Guidance

During Sony Group Corporation's fiscal year 2024 third-quarter earnings call, significant guidance was provided, highlighting several key financial metrics. Consolidated sales excluding the financial services segment increased 7% year-on-year to ¥3,695.7 trillion, while operating income rose 10% to ¥423 billion. Including the financial services segment, consolidated sales surged 18% to ¥4,409.6 trillion, with operating income climbing 1% to a record ¥469.3 billion for the third quarter. Notably, net income increased 3% to ¥373.7 billion. The company revised its full-year forecast upward, projecting consolidated sales of ¥11.900 trillion, up 4% from the previous forecast, and operating income of ¥335 billion, a 2% increase. The PlayStation segment experienced remarkable growth, with sales up 16% year-on-year to ¥1,682.3 billion, and operating income soaring 37% to ¥118.1 billion. The Music segment also saw a 14% rise in sales to ¥481.7 billion and a 28% increase in operating income to ¥97.4 billion. Meanwhile, the Pictures segment's sales grew 9% to ¥398.2 billion, although operating income decreased 18% to ¥34 billion. The company emphasized its strategic focus on enhancing local music repertoire and strengthening engagements in the Anime sector, with expectations for continued growth driven by innovative content and technological advancements.

Sony Financial Statement Overview

Summary

Sony exhibits strong financial performance with robust profitability and efficient cash flow management. The income statement reveals a high net profit margin and strong operational efficiency. The balance sheet displays healthy leverage and equity ratios, while the cash flow statement underscores strong cash generation capabilities.

Income Statement

Very Positive

Sony's income statement demonstrates robust performance with a significant gross profit margin of 28.3% and a net profit margin of 8.8% for the latest year. The revenue growth rate over the past year was a modest 1.2%, but the company has shown consistent revenue growth over the past five years. The EBIT margin of 10.8% and EBITDA margin of 20.9% reflect strong operational efficiency. The overall trajectory indicates stable profitability with room for future growth.

Balance Sheet

Positive

The balance sheet shows a healthy financial position with a debt-to-equity ratio of 0.51, indicating a balanced approach to leveraging. The return on equity (ROE) stands at 14.0%, showcasing effective utilization of shareholder funds. The equity ratio of 23.2% suggests a solid equity base, though there is potential to improve asset financing through equity. The balance sheet remains stable and well-positioned to support further growth.

Cash Flow

Very Positive

Sony's cash flow statement highlights strong cash generation capabilities with an operating cash flow to net income ratio of 2.76, reflecting efficient cash conversion from earnings. The free cash flow to net income ratio of 2.19 indicates ample free cash availability for reinvestment. Remarkably, the free cash flow growth rate was significant over the past year, underscoring a strong cash flow trajectory.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	12.96T	13.02T	11.54T	9.92T	9.00T
Gross Profit	3.66T	3.34T	3.14T	2.70T	2.44T
EBITDA	2.71T	2.46T	2.29T	2.03T	1.74T
Net Income	1.14T	970.57B	1.01T	882.18B	1.03T
Balance Sheet
Total Assets	35.29T	34.11T	32.04T	30.48T	26.35T
Cash, Cash Equivalents and Short-Term Investments	3.43T	2.33T	1.92T	2.56T	4.69T
Total Debt	4.20T	4.09T	4.06T	3.35T	2.46T
Total Liabilities	26.78T	26.35T	24.75T	23.28T	20.73T
Stockholders Equity	8.18T	7.59T	7.23T	7.14T	5.58T
Cash Flow
Free Cash Flow	2.50T	749.27B	-298.94B	792.55B	837.91B
Operating Cash Flow	3.15T	1.37T	314.69B	1.23T	1.35T
Investing Cash Flow	-779.32B	-818.89B	-1.05T	-728.78B	-1.78T
Financing Cash Flow	-449.05B	-210.71B	84.30B	-336.58B	666.97B

Sony Technical Analysis

Technical Analysis Sentiment

Positive

Last Price3640.00

Price Trends

50DMA

3678.84

Positive

100DMA

3625.71

Positive

200DMA

3301.46

Positive

Market Momentum

MACD

-7.35

Positive

RSI

51.54

Neutral

STOCH

73.59

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6758, the sentiment is Positive. The current price of 3640 is below the 20-day moving average (MA) of 3734.90, below the 50-day MA of 3678.84, and above the 200-day MA of 3301.46, indicating a neutral trend. The MACD of -7.35 indicates Positive momentum. The RSI at 51.54 is Neutral, neither overbought nor oversold. The STOCH value of 73.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6758.

Sony Peers Comparison

Overall Rating

UnderperformOutperform

Sector (69)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6752	74 Outperform	$3.57T	9.76	7.85%	2.61%	-0.45%	-17.53%
6758	73 Outperform	$23.16T	20.08	14.32%	0.53%	-0.49%	19.71%
6952	73 Outperform	¥248.13B	30.92	3.45%	4.13%	-2.63%	-31.17%
6632	71 Outperform	¥173.90B	8.53	16.78%	1.73%	3.02%	60.53%
Sector *	69 Neutral	¥231.71B	14.67	7.64%	2.71%	9.09%	8.52%
6971	61 Neutral	¥2.43T	100.87	0.71%	2.90%	0.51%	-76.08%
6753	53 Neutral	¥450.65B	12.49		―	-6.97%	―

* Technology Sector Average

Performance Comparison

JP:6758

Sony

3,730.00

955.01

34.41%

JP:6753

Sharp Corporation

694.10

-245.90

-26.16%

JP:6632

JVCKENWOOD Corporation

1,154.50

283.95

32.62%

JP:6752

Panasonic

1,544.50

256.25

19.89%

JP:6971

Kyocera

1,719.00

-111.16

-6.07%

JP:6952

Casio Computer Co

1,093.50

-69.93

-6.01%

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.Date of analysis: Jun 27, 2025