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TDK Corporation (JP:6762)
:6762
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TDK Corporation
(6762)
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Rating:77Outperform
Price Target:
¥2,209.00
▲(5.74% Upside)
TDK Corporation's stock is supported by strong financial performance and positive technical indicators. However, valuation concerns and mixed earnings call sentiment, particularly regarding profit declines and cash flow issues, temper the overall score. The company is well-positioned but faces challenges that require careful management.
Positive Factors
Revenue Growth
The consistent increase in net sales reflects strong demand in the ICT and industrial equipment markets, indicating robust market expansion and product adoption.
Energy Application Products Growth
Growth in the energy application products segment, driven by small capacity batteries, highlights TDK's strength in meeting rising energy storage demands, crucial for future revenue.
Balance Sheet Health
A conservative leverage position enhances TDK's financial stability, providing resilience against economic fluctuations and supporting long-term investment capacity.
Negative Factors
Declining Free Cash Flow
Declining free cash flow could limit TDK's ability to fund future investments and innovations, potentially impacting its competitive position and growth prospects.
Challenges in Automotive Market
Reduced demand in the automotive market, particularly for BEVs, poses a risk to TDK's revenue streams from this sector, necessitating strategic adjustments.
Significant Decrease in Net Profit
A significant drop in net profit due to foreign exchange losses and tax reversals could strain profitability, affecting TDK's ability to reinvest and grow.
TDK Corporation (6762) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥3.96T
Dividend Yield0.77%
Average Volume (3M)7.39M
Price to Earnings (P/E)26.6
Beta (1Y)1.47
Revenue Growth4.83%
EPS Growth-12.18%
CountryJP
Employees105,067
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)21.85
Shares Outstanding1,943,859,900
10 Day Avg. Volume9,867,949
30 Day Avg. Volume7,391,809
Financial Highlights & Ratios
PEG Ratio0.52
Price to Book (P/B)1.63
Price to Sales (P/S)1.33
P/FCF Ratio13.32
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥2,154.00Price Target Upside3.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
TDK Corporation Business Overview & Revenue Model
Company DescriptionTDK Corporation is a Japanese multinational electronics company headquartered in Tokyo, Japan. Founded in 1935, TDK specializes in the manufacture of electronic components, modules, and systems. The company's core products include passive components such as capacitors, inductors, and ferrite cores, as well as magnetic application products like recording devices and sensors. TDK serves a wide range of sectors including telecommunications, automotive, consumer electronics, and industrial equipment.
How the Company Makes MoneyTDK Corporation generates revenue through the design, manufacture, and sale of electronic components and systems. The company's key revenue streams include passive components, such as capacitors and inductors, which are critical in electronic circuits; magnetic application products, including hard disk drives and sensors, which are used in data storage and automotive applications; and energy devices, such as batteries, which power various electronic devices. Additionally, TDK collaborates with and supplies to major technology and automotive companies, enhancing its market presence and revenue potential. The company's global distribution network and focus on innovation in electronic materials contribute significantly to its earnings.
TDK Corporation Earnings Call Summary
Earnings Call Date:Aug 01, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment. While there were notable achievements such as growth in net sales, energy application products, and a return to profitability for sensor applications, these were tempered by declines in operating and net profits, challenges in the automotive market, and negative free cash flow.Q1-2026 Updates
Positive Updates
Increase in Net Sales
Net sales for Q1 FY2026 were JPY535.8 billion, up JPY16.9 billion or 3.3% YoY, driven by increased sales in the ICT market and recovery in the industrial equipment market.
Energy Application Products Segment Growth
The energy application products segment saw net sales increase by 8.6% YoY to JPY285.5 billion, with operating profit slightly higher than the previous year, driven by higher sales volume of small capacity batteries.
Sensor Application Products Return to Profitability
Net sales for sensor application products were JPY46.4 billion, up 5.3% YoY, with operating profit returning to profitability from a loss in the previous year.
Magnetic Application Products Profit Increase
The magnetic application products segment maintained flat sales YoY but saw a significant increase in operating profit to JPY6.3 billion, due to improved product mix and cost efficiency.
Negative Updates
Decrease in Operating Profit
Operating profit decreased by 2.5% YoY to JPY56.4 billion, impacted by yen appreciation and a decline in shipments for automotive applications.
Significant Decrease in Net Profit
Net profit was JPY41.5 billion, down JPY18.2 billion or 30.5% YoY, due to foreign exchange losses and the absence of the previous year's tax expense reversal.
Challenges in Automotive Market
Sales of passive components and sensors decreased in the automotive market due to a slowdown in BEV demand, leading to lower sales and profits in this segment.
Negative Free Cash Flow
Free cash flow was negative JPY3.9 billion in Q1, attributed to investment cash flow exceeding operating cash flow.
Company Guidance
In the Q1 performance briefing for the fiscal year ending March 2026, TDK provided a comprehensive overview of its financial results and guidance. Net sales for the quarter increased by 3.3% year-over-year (YoY) to JPY535.8 billion, while operating profit decreased by 2.5% YoY to JPY56.4 billion, impacted by a significant yen appreciation against the US dollar and euro, resulting in foreign exchange losses of JPY37.6 billion in sales and JPY7.1 billion in operating profit. Net profit fell by 30.5% YoY to JPY41.5 billion, with earnings per share at JPY21.85. The energy application products segment saw an 8.6% YoY increase in net sales to JPY285.5 billion, driven by strong demand for small capacity batteries in the ICT market. In contrast, the passive components segment experienced a 3.4% YoY decline in net sales to JPY138.1 billion due to reduced demand in the automotive market. The company maintained its full-year projections, citing ongoing uncertainties related to US tariff policies and geopolitical risks, and outlined two scenarios—a base scenario and a risk scenario—to navigate these challenges. TDK's guidance for Q2 anticipates revenue increases across several segments, with expected demand growth in the automotive and ICT markets, and it maintains its full-year financial forecasts, with exchange rates set at JPY140 per US dollar and JPY155 per euro.TDK Corporation Financial Statement Overview
Summary
TDK Corporation demonstrates strong revenue growth and profitability, supported by efficient operations and a solid balance sheet. The company maintains a conservative leverage position, enhancing financial stability. However, declining free cash flow growth presents a potential risk to future investments and liquidity.Income Statement
TDK Corporation shows strong revenue growth with a TTM increase of 76.9%, indicating robust demand and market expansion. The gross profit margin is healthy at 31.2%, and the net profit margin stands at 7.6%, reflecting efficient cost management. EBIT and EBITDA margins are solid at 10.0% and 18.9%, respectively, showcasing operational efficiency. However, the slight decline in EBIT margin from the previous year suggests potential cost pressures.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio is 0.34, indicating a conservative leverage position, which is favorable for financial stability. Return on equity is decent at 9.2%, suggesting effective use of shareholder funds. The equity ratio of 49.1% reflects a strong capital structure, though the slight decrease in stockholders' equity compared to total assets may need monitoring.78
Positive
Cash Flow
Operating cash flow is strong, with a coverage ratio of 0.41, indicating good cash generation relative to net income. However, free cash flow has declined by 14.2% TTM, which could impact future investments. The free cash flow to net income ratio of 0.49 suggests moderate cash conversion efficiency, but the negative growth trend in free cash flow is a concern.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.22T | 2.20T | 2.10T | 2.18T | 1.90T | 1.48T |
| Gross Profit | 690.41B | 688.04B | 603.02B | 584.52B | 563.85B | 434.32B |
| EBITDA | 424.78B | 420.42B | 384.71B | 385.25B | 355.08B | 271.40B |
| Net Income | 149.00B | 167.16B | 124.69B | 114.19B | 131.30B | 74.68B |
Balance Sheet | ||||||
| Total Assets | 3.62T | 3.54T | 3.42T | 3.15T | 3.04T | 2.36T |
| Cash, Cash Equivalents and Short-Term Investments | 710.40B | 697.31B | 650.00B | 506.19B | 439.34B | 380.39B |
| Total Debt | 669.82B | 608.40B | 685.74B | 752.16B | 679.81B | 525.68B |
| Total Liabilities | 1.83T | 1.73T | 1.70T | 1.68T | 1.74T | 1.40T |
| Stockholders Equity | 1.78T | 1.80T | 1.71T | 1.46T | 1.30T | 958.93B |
Cash Flow | ||||||
| Free Cash Flow | 189.28B | 220.55B | 228.42B | -12.94B | -112.35B | 18.66B |
| Operating Cash Flow | 432.26B | 445.84B | 447.01B | 262.77B | 178.99B | 230.85B |
| Investing Cash Flow | -251.99B | -244.84B | -216.59B | -234.40B | -281.66B | -237.37B |
| Financing Cash Flow | -89.74B | -143.33B | -146.37B | 14.95B | 113.86B | 27.04B |
TDK Corporation Technical Analysis
Positive
2089.00
Price Trends
1877.28
Positive
1721.51
Positive
1721.09
Positive
Market Momentum
60.47
Negative
61.45
Neutral
78.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6762, the sentiment is Positive. The current price of 2089 is above the 20-day moving average (MA) of 1980.97, above the 50-day MA of 1877.28, and above the 200-day MA of 1721.09, indicating a bullish trend. The MACD of 60.47 indicates Negative momentum. The RSI at 61.45 is Neutral, neither overbought nor oversold. The STOCH value of 78.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6762.
TDK Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | ¥3.96T | 26.60 | 0.77% | 4.83% | -12.18% | ||
75 Outperform | 4.81T | 22.36 | 8.62% | 2.19% | 2.58% | 11.54% | |
73 Outperform | 1.11T | 19.50 | 8.00% | 1.65% | 4.71% | -11.61% | |
70 Outperform | 778.07B | 23.79 | 2.11% | 2.63% | 1.05% | 0.00% | |
66 Neutral | 1.19T | 31.73 | 6.87% | 0.47% | 4.00% | 13.97% | |
59 Neutral | 394.97B | -80.77 | 0.73% | 2.86% | 4.21% | -135.36% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
JP:6762
TDK Corporation
2,089.00
245.17
13.30%
IBIDF
IBIDEN CO
48.81
16.57
51.40%
MNBEF
MinebeaMitsumi
18.32
-0.59
-3.12%
MRAAF
Murata Manufacturing Co
19.00
2.31
13.84%
OMRNF
OMRON
26.86
-15.84
-37.10%
JP:6976
Taiyo Yuden Co., Ltd.
3,145.00
328.91
11.68%
TDK Corporation Corporate Events
TDK Corporation Reports Q1 FY2026 Financial Results with Mixed Performance
Aug 1, 2025
TDK Corporation reported its consolidated financial results for the first quarter of FY March 2026, showing a slight increase in net sales by 3.3% compared to the previous year. However, the company experienced a decline in operating profit, profit before tax, and net profit, with significant decreases in net profit attributable to owners of the parent by 30.5%. The financial outlook for FY March 2026 anticipates a potential decrease in net sales and profits, reflecting challenges in the market environment.
The most recent analyst rating on (JP:6762) stock is a Buy with a Yen2100.00 price target. To see the full list of analyst forecasts on TDK Corporation stock, see the JP:6762 Stock Forecast page.
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.