Advantest (6857) AI Stock Analysis

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Advantest

(OTC:6857)

Rating:74Outperform

Price Target:

¥12,970.00

▲(13.37% Upside)

Advantest's strong financial performance and positive technical indicators drive the overall score. However, the high valuation and low dividend yield slightly temper the outlook. The absence of earnings call data and corporate events means the score is primarily influenced by financials and technicals.

Advantest (6857) vs. iShares MSCI Japan ETF (EWJ)

Market Cap

¥8.27T

Dividend Yield0.34%

Average Volume (3M)11.44M

Price to Earnings (P/E)36.2

Beta (1Y)1.46

Revenue Growth72.67%

EPS Growth196.67%

CountryJP

Employees6,766

SectorTechnology

Sector Strength83

IndustrySemiconductors

Share Statistics

EPS (TTM)123.14

Shares Outstanding766,141,240

10 Day Avg. Volume10,074,550

30 Day Avg. Volume11,444,356

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

¥11,857.31

Price Target Upside3.65% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering9

Advantest Business Overview & Revenue Model

Company DescriptionAdvantest Corporation manufactures and sells semiconductor and component test system products and mechatronics-related products. It operates through three segments: Semiconductor and Component Test System; Mechatronics System; and Services, Support and Others. The Semiconductor and Component Test System segment provides customers with test system products for the semiconductor industry and the electronic parts industry. This segment offers test systems for SoC semiconductor devices; and test systems for memory semiconductors devices. The Mechatronics System segment provides test handlers; mechatronic-applied products for handling semiconductor devices; and device interfaces, which serve as interfaces with the devices that are measured. This segment also engages in the operations related to nano-technology products. The Services, Support and Others segment provides customer solutions for the semiconductor and component test system and mechatronics system segments; and support services. This segment is also involved in the sale of consumables and used products; and equipment lease business and others. In addition, the company engages in the research and development activities measuring and testing technologies. Advantest Corporation serves fabless semiconductor companies, foundries, and test houses, as well as industrial, design, and manufacturing companies in Japan, rest of Asia, the United States, and Europe. Advantest Corporation has collaboration with STMicroelectronics on advanced automated test cell for IC Testing; and partnership with PDF Solutions Inc. for cloud-based software solutions. The company was founded in 1954 and is headquartered in Tokyo, Japan.

How the Company Makes MoneyAdvantest Corporation generates revenue primarily through the sale of its automated test equipment (ATE), which is in high demand by semiconductor manufacturers around the world. The company also offers maintenance and support services for its testing equipment, providing an additional revenue stream through service contracts and upgrades. Advantest's earnings are significantly influenced by the cyclical nature of the semiconductor industry, technological advancements, and the ongoing demand for more sophisticated and efficient chips. Strategic partnerships with major semiconductor companies and continuous innovation in testing solutions further bolster its revenue potential.

Advantest Earnings Call Summary

Earnings Call Date:Jul 29, 2025

(Q4-2024)

% Change Since: |

Next Earnings Date:Oct 29, 2025

Earnings Call Sentiment Positive

Advantest reported a strong financial performance in FY 2024 with record-high sales and profits, driven by robust demand for AI-related semiconductors. Despite some challenges including impairment losses and geopolitical uncertainties, the company maintains a positive outlook for FY 2025, expecting continued high demand and market presence.

Q4-2024 Updates

Positive Updates

Record High Financial Performance

FY 2024 sales, operating income, and net income all posted record highs due to strong tester demand for AI-related high-performance semiconductors. The demand was driven by increasing semiconductor complexity and enhanced supply capabilities.

Profitability and Revenue Surpassing Guidance

Full year sales exceeded the guidance issued in January 2025 by approximately JPY 40 billion. Core operating income was JPY 249.7 billion with a margin of 32%, significantly surpassing guidance.

Strategic Supply Chain Management

Advantest enhanced its supply chain management, resulting in record-high sales booking and a clean balance sheet for FY 2025.

Market Expansion and Share

Advantest maintained a majority share in the semiconductor tester market, with a notable market share of approximately 58% overall and over 60% in the memory test market.

Positive Outlook for FY 2025

Advantest expects sustained high demand for AI-related SoC semiconductors, with FY 2025 sales projected to grow slightly year-over-year on a constant currency basis.

Negative Updates

Impairment Loss Impact

An impairment loss of approximately JPY 24.1 billion was booked for a portion of goodwill and intangible assets related to Essai's socket business, impacting the operating margin and net profit.

Higher Effective Tax Rate

The effective tax rate rose to approximately 28%, higher than expected due to impairment losses which are not deductible for tax purposes.

Soft Demand for Non-AI Semiconductors

Demand for semiconductors for applications other than AI remained soft throughout the fiscal year, affecting overall sales growth.

Geopolitical and Economic Uncertainties

Ongoing geopolitical risks and macroeconomic uncertainties, including potential tariff impacts, pose challenges for the business environment.

Company Guidance

During the financial briefing for Advantest Corporation's fiscal year 2024, several key metrics were highlighted. The company achieved record highs in sales, operating income, and net income due to strong demand for AI-related high-performance semiconductors. Full-year sales exceeded the guidance by approximately JPY40 billion, driven by better-than-expected deliveries, particularly for SoC testers. The core operating income was JPY249.7 billion, with a margin of 32%, significantly surpassing expectations. However, one-time items such as an impairment loss affected the operating margin and net profit. The effective tax rate rose to approximately 28% due to non-deductible impairment losses. The annual dividend forecast was JPY39. The company anticipates continued high demand for testers in FY 2025, projecting sales of JPY755 billion and operating income of JPY242 billion. The gross profit margin is expected to remain around 58%. Advantest's market share in the semiconductor tester market was approximately 58%, with a decrease in the SoC market share due to competition from local suppliers in China, while the memory test market share exceeded 60%. The company also plans a share repurchase program up to JPY70 billion to enhance shareholder returns.

Advantest Financial Statement Overview

Summary

Advantest exhibits a strong financial position with robust revenue growth, healthy margins, and efficient operations. The balance sheet is stable with low leverage and high returns on equity, while cash flow generation is strong, supporting liquidity and financial flexibility.

Income Statement

Very Positive

Advantest's income statement shows strong performance with a notable revenue growth rate of 16.04% in the TTM period, indicating robust demand and market expansion. The company maintains healthy margins, with a gross profit margin of 57.09% and a net profit margin of 20.67%, reflecting efficient cost management and profitability. EBIT and EBITDA margins are also solid at 29.62% and 33.09%, respectively, showcasing operational efficiency. Overall, the income statement reflects a positive growth trajectory and strong profitability.

Balance Sheet

Positive

The balance sheet of Advantest is stable, with a low debt-to-equity ratio of 0.18, indicating prudent financial leverage. The return on equity is impressive at 33.30%, highlighting effective use of shareholder funds to generate profits. The equity ratio stands at 64.54%, suggesting a strong equity base relative to total assets. While the balance sheet is solid, the slight increase in total debt over the periods should be monitored.

Cash Flow

Very Positive

Advantest's cash flow statement demonstrates healthy cash generation, with a free cash flow growth rate of 6.44% in the TTM period. The operating cash flow to net income ratio is robust at 0.92, indicating strong cash earnings quality. The free cash flow to net income ratio of 0.94 further underscores the company's ability to convert profits into cash. Overall, the cash flow position is strong, supporting ongoing operations and potential investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	904.81B	779.71B	486.51B	560.19B	416.90B	312.79B
Gross Profit	539.86B	445.08B	246.03B	319.06B	235.91B	168.29B
EBITDA	349.05B	257.13B	105.63B	193.38B	131.59B	83.25B
Net Income	227.52B	161.18B	62.29B	130.40B	87.30B	69.79B
Balance Sheet
Total Assets	889.87B	854.21B	671.23B	600.22B	494.70B	422.64B
Cash, Cash Equivalents and Short-Term Investments	273.41B	262.54B	106.70B	85.54B	116.58B	149.16B
Total Debt	91.78B	93.50B	94.44B	50.84B	43.46B	11.85B
Total Liabilities	315.65B	347.67B	240.05B	231.53B	200.07B	142.27B
Stockholders Equity	574.22B	506.54B	431.18B	368.69B	294.62B	280.37B
Cash Flow
Free Cash Flow	285.86B	268.56B	12.13B	46.64B	60.67B	54.55B
Operating Cash Flow	305.14B	285.97B	32.67B	70.22B	78.89B	67.83B
Investing Cash Flow	-37.28B	-42.19B	-27.94B	-26.71B	-46.91B	-16.83B
Financing Cash Flow	-99.19B	-82.82B	10.76B	-77.43B	-68.74B	-30.41B

Advantest Technical Analysis

Technical Analysis Sentiment

Positive

Last Price11440.00

Price Trends

50DMA

10947.00

Positive

100DMA

9123.93

Positive

200DMA

8806.46

Positive

Market Momentum

MACD

117.11

Positive

RSI

56.97

Neutral

STOCH

53.36

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6857, the sentiment is Positive. The current price of 11440 is above the 20-day moving average (MA) of 11120.25, above the 50-day MA of 10947.00, and above the 200-day MA of 8806.46, indicating a bullish trend. The MACD of 117.11 indicates Positive momentum. The RSI at 56.97 is Neutral, neither overbought nor oversold. The STOCH value of 53.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6857.

Advantest Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6857	74 Outperform	¥8.27T	36.20	44.94%	0.34%	72.67%	196.67%
Sector *	61 Neutral	$35.52B	8.84	-11.06%	1.87%	8.55%	-8.14%
DINRF	―	$6.69B	11.32	24.92%	2.74%	―	―
DISPF	―	$27.93B	33.44	28.07%	1.07%	―	―
LSRCF	―	$9.16B	16.63	47.47%	2.09%	―	―
RNECF	―	$20.40B	20.80	-4.72%	1.51%	―	―
TOELF	―	$62.77B	17.10	29.80%	―	―	―

* Technology Sector Average

Performance Comparison

JP:6857

Advantest

11,440.00

5,642.20

97.32%

DINRF

SCREEN Holdings Co

76.25

10.93

16.73%

DISPF

Disco

258.56

22.68

9.62%

LSRCF

Lasertec

105.77

-46.47

-30.52%

RNECF

Renesas Electronics

11.75

-2.70

-18.69%

TOELF

Tokyo Electron

134.03

-12.72

-8.67%

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: Aug 29, 2025