Allied Telesis Holdings KK (6835) AI Stock Analysis

• Market Cap: ¥35.91B
• Dividend Yield: 0.77%
• Average Volume (3M): 435.20K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 0.48
• Revenue Growth: 6.43%
• EPS Growth: 368.06%
• Country: JP
• Employees: 1,879
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 10.77
• Shares Outstanding: 105,012,180
• 10 Day Avg. Volume: 524,630
• 30 Day Avg. Volume: 435,196
• PEG Ratio: 0.01
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.23
• P/FCF Ratio: 2.23
• 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: 80 Outperform
• Price Target: ¥380.00 ▲(35.23% Upside)

The score is driven primarily by strong financial performance (profitability, leverage improvement, and positive free cash flow) and attractive valuation (low P/E with a solid dividend yield). Technicals are supportive of an uptrend, but extremely overbought RSI/Stoch readings temper the overall score due to elevated near-term reversal risk.

Positive Factors

Revenue Growth

Sustained multi-year revenue expansion demonstrates durable demand for the company’s networking products and solutions. This scale expansion supports higher operating leverage, broader channel reach, and reinvestment capacity for R&D and service capabilities, improving long-term competitive positioning.

Margin Sustainability

Consistently high gross margins and rising net margins indicate strong cost management and pricing power in core product lines. Sustained margins improve cash conversion and fund strategic investments, making profitability less vulnerable to single-period revenue swings over the medium term.

Balance Sheet & Cash Generation

Marked deleveraging and a turnaround to positive free cash flow strengthen financial flexibility and reduce refinancing risk. Healthy equity levels and reliable cash generation support capital allocation for product development, service expansion, and potential opportunistic investments over the next several quarters.

Negative Factors

Cyclical Demand Risk

Dependence on IT refresh cycles and discrete customer projects creates lumpy, timing-sensitive revenues. This cyclicality can produce uneven capacity utilization and planning challenges, requiring cautious inventory and workforce management and making multi-quarter revenue predictability more difficult.

Product Concentration

A concentrated product portfolio focused on networking hardware leaves the company exposed to technological shifts, commoditization, and pricing competition. Long-term resilience depends on continued R&D and service differentiation to avoid margin erosion as networks adopt new architectures or vendor consolidation occurs.

Visibility & Disclosure

Limited forward guidance and few disclosed corporate events reduce visibility into management’s near-term plans and capital allocation priorities. For investors and partners this raises execution risk and makes it harder to assess sustainability of growth and margin improvements beyond reported historical results.

Allied Telesis Holdings KK Business Overview & Revenue Model

Company Description

Allied Telesis Holdings K.K., a holding company, engages in the planning, development, manufacture, and sale of network devices and solutions worldwide. The company manufactures network products, including network equipment; AlliedWare Plus, a network OS for IoT infrastructure including autonomous management framework for stable system operation and autonomous wave control, an autonomous wireless LAN solution; and solutions that will expand the possibilities of network infrastructure, such as systems where network infrastructure blocks unauthorized access in collaboration with security software and asset management software, as well as systems where monitoring cameras monitor and detect physical hazards that include acts of terrorism. It also provides support services, which comprise planning and consulting, installation and structuring, operation and monitoring, and education services. The company was incorporated in 1971 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Allied Telesis generates revenue primarily through the sale of networking equipment and software solutions. The company's key revenue streams include direct sales to end customers, distribution through global partners, and ongoing service and support contracts. Additionally, Allied Telesis benefits from strategic partnerships with technology providers and system integrators, which help expand its market reach and enhance product offerings. The company also invests in research and development to innovate and meet the evolving needs of its clients, thereby maintaining a competitive edge in the market.

Allied Telesis Holdings KK Financial Statement Overview

Summary

Strong fundamentals supported by solid Income Statement (85) with improved profitability and margins, a healthier Balance Sheet (78) with materially lower leverage, and improving Cash Flow (80) including a turnaround to positive free cash flow.

Income Statement

Allied Telesis Holdings KK has shown impressive revenue growth over the years, with a notable increase from ¥29.38 billion in 2020 to ¥48.46 billion in 2024. The gross profit margin remains strong, consistently above 50%, indicating effective cost management. The net profit margin has improved significantly, rising from 0.63% in 2020 to 7.43% in 2024, reflecting enhanced profitability. EBIT and EBITDA margins have also increased, showing operational efficiency gains. Overall, the income statement displays strong growth and profitability trends.

Balance Sheet

The company's balance sheet reflects a robust equity base, with stockholders' equity growing consistently to reach ¥19.45 billion in 2024. The debt-to-equity ratio has improved, down from 2.05 in 2020 to 0.39 in 2024, indicating reduced leverage. Return on equity has shown positive trends, supported by increasing net income. However, the total assets to equity ratio indicates a balanced approach to asset financing. Overall, the balance sheet is stable with a positive trajectory towards lower leverage.

Cash Flow

Allied Telesis' cash flows reflect a significant turnaround in free cash flow, which has grown from negative figures in earlier years to ¥5.09 billion in 2024. The operating cash flow to net income ratio is strong, suggesting effective conversion of income to cash. The company has shown resilience in cash flow management, despite past volatility. The free cash flow to net income ratio is also favorable, indicating healthy cash generation relative to earnings. Overall, cash flow stability and growth are commendable.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	49.72B	48.46B	44.39B	41.50B	33.27B	29.38B
Gross Profit	28.35B	27.90B	25.04B	24.21B	20.63B	17.92B
EBITDA	4.77B	6.74B	3.19B	12.86B	2.02B	1.40B
Net Income	3.74B	3.60B	1.09B	8.61B	1.37B	185.90M
Balance Sheet
Total Assets	44.01B	46.49B	45.50B	41.64B	28.88B	25.77B
Cash, Cash Equivalents and Short-Term Investments	15.62B	14.26B	10.70B	9.05B	4.72B	4.06B
Total Debt	3.61B	7.67B	9.69B	6.56B	8.81B	10.09B
Total Liabilities	25.56B	27.03B	28.03B	25.87B	22.68B	21.43B
Stockholders Equity	18.45B	19.45B	17.47B	15.77B	6.20B	4.34B
Cash Flow
Free Cash Flow	0.00	5.09B	-954.62M	7.12B	2.19B	377.59M
Operating Cash Flow	0.00	5.74B	-74.37M	8.41B	2.54B	913.11M
Investing Cash Flow	0.00	2.88B	-967.43M	-1.45B	-423.31M	-542.79M
Financing Cash Flow	0.00	-5.44B	2.58B	-4.25B	-1.62B	782.77M

Allied Telesis Holdings KK Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 281.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6835, the sentiment is Positive. The current price of 281 is below the 20-day moving average (MA) of 305.70, above the 50-day MA of 266.95, and above the 200-day MA of 201.37, indicating a bullish trend. The MACD of 18.40 indicates Negative momentum. The RSI at 79.27 is Negative, neither overbought nor oversold. The STOCH value of 81.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6835.

Allied Telesis Holdings KK Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6718	81 Outperform	¥45.36B	18.96	―	4.43%	0.63%	-24.87%
6835	80 Outperform	¥35.91B	7.92	24.14%	0.77%	6.43%	368.06%
6820	70 Outperform	¥42.71B	18.45	―	2.93%	-0.90%	-13.24%
6703	69 Neutral	¥180.65B	17.11	7.16%	2.31%	-2.36%	-61.50%
6778	63 Neutral	¥5.64B	29.81	―	3.54%	19.28%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6771	53 Neutral	¥4.29B	10.34	―	2.01%	13.56%	―

Allied Telesis Holdings KK Corporate Events

Allied Telesis to Divest U.S. IP Triple-Play Services Business to Warrior Communications

Allied Telesis Holdings K.K. has approved the transfer of the IP Triple-Play Services Business of its wholly owned U.S. subsidiary, Allied Telesis Capital Corp., to Warrior Communications, Inc. The divested business provides cable TV, internet and telephone services to U.S. military bases and surrounding communities and accounted for 4.8% of consolidated sales and roughly a quarter of operating and ordinary profit in the fiscal year ended December 2024. Management cited declining revenues driven by customer migration to cloud-based telephony and streaming services, as well as the April 2028 expiry of contracts with U.S. authorities, as reasons for exiting. The transaction, to be settled in cash for an undisclosed price, is intended to free up resources for reinvestment in the group’s core businesses and is positioned as a step to enhance medium- to long-term corporate value.

The most recent analyst rating on (JP:6835) stock is a Buy with a Yen368.00 price target. To see the full list of analyst forecasts on Allied Telesis Holdings KK stock, see the JP:6835 Stock Forecast page.