TEAC CORPORATION (6803) AI Stock Analysis

• Market Cap: ¥3.86B
• Dividend Yield: 1.08%
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): 7.6
• Beta (1Y): 1.11
• Revenue Growth: 7.21%
• EPS Growth: N/A
• Country: JP
• Employees: 571
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 10.36
• Shares Outstanding: 28,931,711
• 10 Day Avg. Volume: 1,616,160
• 30 Day Avg. Volume: 1,247,910
• PEG Ratio: -0.11
• Price to Book (P/B): 0.63
• Price to Sales (P/S): 0.14
• P/FCF Ratio: 2.12
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: ¥143.00 ▲(55.43% Upside)
• Action: Reiterated Date: 02/08/26
• Date: Action: Reiterated 02/08/26

The score is driven by solid technical strength and a low P/E valuation. These positives are tempered by weak financial fundamentals, led by a steep TTM revenue contraction, thin margins, and meaningful leverage, despite notably improved cash generation.

Positive Factors

Strong cash generation

TEAC's materially improved operating and free cash flow, with FCF roughly 0.89x of net income, indicates durable internal funding capacity. Reliable cash conversion supports debt servicing, targeted capex or R&D, and gives management flexibility to shore up operations or invest despite cyclical hardware demand.

Resilient product margins

A roughly 42% gross margin provides a structural buffer versus peers in hardware: strong unit-level economics help absorb input cost swings and protect contribution per sale. That margin level supports sustainable break-even and allows profitability to recover faster if revenue stabilizes or rises.

Established brands and multi-market reach

TEAC's long-standing TEAC and TASCAM brands and presence in both consumer and pro audio create durable competitive advantages: brand equity, diversified end-markets, aftermarket and B2B channels. These reduce dependence on a single channel and support recurring accessory/service revenue streams.

Negative Factors

Sharp revenue contraction

A roughly 64% TTM revenue decline is a structural red flag: it reduces operating leverage, undermines forecasting confidence and weakens bargaining power with suppliers and distributors. Sustained top-line weakness would impair margins, cash generation consistency and strategic investment capacity.

Thin operating and net margins

Very low EBIT and net margins leave limited room to absorb cost inflation, competitive pricing pressure, or lower volumes. Marginal profitability constrains reinvestment in product development and marketing, raising the risk that cyclical downturns or structural demand shifts could force deeper cuts or margin erosion.

Meaningful leverage

Leverage above equity (debt/equity ~1.32x) constrains strategic options: interest burden and covenant risk rise if revenues remain depressed. High leverage reduces capacity for opportunistic M&A, R&D spending, or sustained marketing investments, and increases vulnerability to macro shocks.

TEAC CORPORATION Business Overview & Revenue Model

Company Description

Teac Corporation engages in the audio and information product businesses in Japan and internationally. Its audio products comprise high-end and general audio products; audio equipment for music production and broadcasting; and contract/professional audio products. The company's information products include recording and reproducing equipment for aircraft, medical image recording and reproducing products, and optical drives for industrial market, as well as measurement products, such as sensors/transducers, and data recorders; and in-flight entertainment, data storage, and disc publishing products. It also provides commissioned design and contract manufacturing solutions; business solutions; and repair and maintenance services. The company was incorporated in 1948 and is headquartered in Tokyo, Japan. Teac Corporation is a subsidiary of Global Acoustic Partners LLC.

How the Company Makes Money

TEAC Corporation generates revenue through several key streams. Primarily, it sells consumer electronics, including high-end audio equipment and digital recording devices. The company also offers professional audio solutions for broadcasting and studio applications, which contribute significantly to its revenue. Additionally, TEAC generates income from the sale of data storage devices and related technology solutions. The company has established partnerships with various distributors and retailers to enhance its market reach, and it also benefits from ongoing demand in the professional audio market, which has seen growth due to the increasing popularity of content creation and streaming services.

TEAC CORPORATION Financial Statement Overview

Summary

Cash flow is the strongest area with materially improved TTM operating and free cash flow and healthy FCF-to-earnings conversion (~0.89x). However, the income statement is pressured by a very sharp TTM revenue decline (~-64%) and thin profitability (TTM net margin ~1.4%, EBIT margin ~2.8%), while leverage is a constraint (debt-to-equity ~1.32x).

Income Statement

TTM (Trailing-Twelve-Months) revenue is down sharply (about -64% growth), which is the main earnings quality concern despite stable gross margin (~42%). Profitability is positive but thin (TTM net margin ~1.4%, EBIT margin ~2.8%), though it improved versus the prior annual period where net income was near breakeven. Overall, the company remains profitable, but the steep revenue contraction and low margins reduce confidence in near-term earnings durability.

Balance Sheet

Leverage is meaningful with debt running above equity (TTM debt-to-equity ~1.32x), limiting balance-sheet flexibility, although equity has been relatively stable. Returns have improved in TTM (return on equity ~6.6%) after a weak prior year, but still sit well below stronger historical levels. Overall, the balance sheet is serviceable, but leverage remains a clear constraint if operating conditions weaken.

Cash Flow

Cash generation strengthened materially in TTM, with operating cash flow and free cash flow both solid and free cash flow up sharply versus the prior annual period. Free cash flow conversion is healthy relative to earnings (TTM free cash flow is ~0.89x net income), supporting liquidity and potential de-leveraging capacity. The key watch-out is inconsistency across the cycle (including a period of negative operating/free cash flow in earlier years), suggesting cash flow can be volatile.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2021
Income Statement
Total Revenue	16.07B	15.67B	15.67B	15.70B	16.00B	14.59B
Gross Profit	6.91B	6.80B	7.01B	6.87B	6.77B	6.26B
EBITDA	1.10B	833.00M	718.00M	985.00M	1.14B	1.07B
Net Income	508.00M	81.00M	-53.00M	305.00M	392.00M	301.00M
Balance Sheet
Total Assets	11.29B	10.81B	11.87B	10.96B	10.08B	9.65B
Cash, Cash Equivalents and Short-Term Investments	1.70B	1.55B	1.23B	1.20B	1.30B	1.87B
Total Debt	4.79B	4.21B	4.75B	4.26B	3.47B	3.71B
Total Liabilities	7.48B	7.26B	8.30B	7.85B	7.61B	7.81B
Stockholders Equity	3.81B	3.56B	3.57B	3.11B	2.47B	1.84B
Cash Flow
Free Cash Flow	1.49B	1.06B	10.00M	180.00M	-302.00M	697.00M
Operating Cash Flow	1.63B	1.18B	116.00M	294.00M	-153.00M	866.00M
Investing Cash Flow	-134.00M	-115.00M	-106.00M	-102.00M	-136.00M	-164.00M
Financing Cash Flow	-1.07B	-706.00M	-69.00M	-333.00M	-299.00M	-314.00M

TEAC CORPORATION Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 92.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6803, the sentiment is Positive. The current price of 92 is below the 20-day moving average (MA) of 119.05, below the 50-day MA of 105.30, and below the 200-day MA of 96.69, indicating a bullish trend. The MACD of 7.53 indicates Negative momentum. The RSI at 71.19 is Negative, 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:6803.

TEAC CORPORATION Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6734	73 Outperform	¥5.05B	13.85	―	1.89%	33.70%	36.99%
6840	66 Neutral	¥5.11B	12.80	―	―	20.86%	―
6803	63 Neutral	¥3.86B	7.60	―	1.08%	7.21%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6836	55 Neutral	¥4.30B	128.02	―	―	17.29%	―
6731	47 Neutral	¥4.40B	-3.98	―	―	-13.93%	―
7709	46 Neutral	¥2.42B	-8.34	―	―	-23.14%	-829.31%