TEAC CORPORATION (6803) AI Stock Analysis

• Market Cap: ¥3.23B
• Dividend Yield: 1.08%
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): 2.2
• Beta (1Y): 1.15
• 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: ¥133.00 ▲(44.57% 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

Cash generation

Materially stronger TTM operating and free cash flow with FCF roughly 0.89x of net income shows the business can convert earnings into liquidity. Durable cash conversion supports working capital, capex and debt servicing over the next several quarters even if revenues remain volatile.

Gross margin resilience

A roughly 42% gross margin despite a sharp top-line drop indicates structural profitability in product sourcing or pricing. Sustained gross margin gives management room to restore volumes or shift mix without immediate margin erosion, aiding medium-term recovery plans and cash flow stability.

Diversified hardware end-markets

Serving both consumer and professional channels via distinct brands and distribution (retail, e‑commerce, dealers/distributors) diversifies demand exposure. This structural mix reduces dependence on any single market cycle and supports cross‑sell, aftermarket and B2B contract opportunities over months to years.

Negative Factors

Sharp revenue contraction

A ~64% TTM revenue decline is a major structural headwind that impairs operating leverage and forecast visibility. Such a steep drop can force cost cuts, reduce scale economics, and slow product investment, making earnings recovery and strategic execution more difficult over the coming quarters.

Thin profitability

Net and EBIT margins near breakeven leave limited buffer for input cost inflation or volume shortfalls. Low operating profitability constrains retained earnings and reinvestment capacity, increasing dependence on cash or borrowing to fund growth or weather continued softness.

Meaningful leverage

Debt running above equity (D/E ~1.32x) reduces balance-sheet flexibility and raises refinancing and interest risk if cash flows slip. Elevated leverage limits ability to pursue strategic investments or absorb further revenue declines without corrective measures over the medium term.

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 makes money primarily by selling hardware products and related accessories under its core audio brands. Its revenue model is centered on (1) product sales to end users through retail and e-commerce channels and to business customers through distributors and dealers, and (2) B2B/professional equipment sales where systems are purchased for studio, broadcast, live sound, and other professional-use applications. Key revenue streams typically include: (a) consumer audio equipment sales (e.g., audio components and playback/recording-related products), (b) professional audio and recording equipment sales (often via the TASCAM brand through specialized pro-audio distribution networks), and (c) ancillary revenue from related items such as accessories, replacement parts, and after-sales support/service tied to installed products. The company’s earnings are influenced by its product mix (consumer vs. professional), channel performance (direct sales vs. distributor/dealer sales), and demand cycles for audio hardware. Specific breakdowns of revenue by segment, named partnerships, and exact channel contribution are null.

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	877.00M	912.00M	980.00M	1.13B	920.00M
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	4.39B	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	-263.00M
Financing Cash Flow	-1.07B	-706.00M	-69.00M	-333.00M	-299.00M	-215.00M

TEAC CORPORATION Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6803, the sentiment is Neutral. The current price of 92 is below the 20-day moving average (MA) of 122.15, below the 50-day MA of 113.34, and below the 200-day MA of 99.17, indicating a neutral trend. The MACD of -0.26 indicates Positive momentum. The RSI at 43.86 is Neutral, neither overbought nor oversold. The STOCH value of 6.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:6803.

TEAC CORPORATION Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6750	79 Outperform	¥149.98B	2.97	12.77%	2.84%	4.48%	22.39%
6727	72 Outperform	¥101.53B	8.23	22.46%	4.06%	-8.93%	48.98%
7751	69 Neutral	¥4.15T	12.61	―	3.27%	4.02%	-41.52%
6737	69 Neutral	¥87.77B	11.91	―	4.76%	1.81%	9.07%
6724	67 Neutral	¥624.61B	9.47	6.07%	3.69%	0.48%	6.92%
6803	63 Neutral	¥3.23B	2.22	―	1.08%	7.21%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%