Advantest (6857) AI Stock Analysis

• Market Cap: ¥18.69T
• Dividend Yield: 0.25%
• Average Volume (3M): 13.33M
• Price to Earnings (P/E): 64.7
• Beta (1Y): 1.66
• Revenue Growth: 63.36%
• EPS Growth: 149.43%
• Country: JP
• Employees: 6,766
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 108.41
• Shares Outstanding: 766,141,240
• 10 Day Avg. Volume: 15,502,300
• 30 Day Avg. Volume: 13,331,246
• PEG Ratio: 0.19
• Price to Book (P/B): 9.42
• Price to Sales (P/S): 6.12
• P/FCF Ratio: 17.76
• 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: ¥26,655.35
• Price Target Upside: -0.76% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: ¥30,486.00 ▲(13.50% Upside)

The score is driven primarily by strong financial performance (high margins, low leverage, solid cash conversion) and supportive technical trend. This is tempered by a stretched technical setup (overbought signals) and a high valuation with minimal dividend yield.

Positive Factors

Sustained High Profitability

Very high core margins reflect differentiated ATE products and pricing power versus peers. Durable margin strength supports reinvestment in R&D, funds capital expenditures and enables strong returns on equity, providing a structural cushion through normal market cycles.

Conservative Balance Sheet

Low leverage affords financial flexibility to fund R&D, capex, and strategic initiatives without stressing liquidity. A strong balance sheet reduces refinancing risk in downturns, enabling the company to sustain operations and invest when competitors might retrench.

Recurring Aftermarket and Service Revenue

Recurring revenues from consumables, spares and service contracts create annuity-like cash flows and customer stickiness. Over time this stabilizes top-line visibility, improves lifetime customer value, and supports margin sustainability independent of new system cycles.

Negative Factors

Cyclicality of Results

Earnings and margins have historically swung with semiconductor demand, making revenue and profitability sensitive to industry cycles. This structural cyclicality complicates forecasting, capital allocation and can produce sharp earnings normalization during industry downturns.

Weakening Free Cash Flow Growth

Although current cash conversion is strong, negative FCF growth and prior periods of weak conversion indicate volatility. Persistent FCF erosion would constrain investments, reduce optionality for buybacks/dividends or M&A, and heighten sensitivity to profit downticks.

Dependence on Semiconductor Capex & Tech Transitions

Revenue mix is structurally tied to customer capex timing and node/packaging transitions. Delays or shifts in customer investment patterns materially affect system demand, and sustaining competitiveness requires ongoing R&D and capital intensity during technology inflection points.

Advantest Business Overview & Revenue Model

Company Description

Advantest 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 Money

Advantest generates revenue primarily through the sale of its semiconductor test equipment and related services. The company's main revenue streams include the sale of ATE systems, which are pivotal for semiconductor manufacturers in ensuring the quality and performance of their products. Additionally, Advantest earns significant income from maintenance and support services, software licensing, and system upgrades. The company has established strategic partnerships with major semiconductor manufacturers and foundries, which bolsters its market position and contributes to consistent demand for its testing solutions. Advantest's earnings are also influenced by market trends in the semiconductor industry, including the increasing complexity of chips and the growing demand for advanced testing solutions in emerging technologies such as 5G and artificial intelligence.

Advantest Financial Statement Overview

Summary

Strong TTM profitability (about 61% gross margin, ~27% net margin, ~38% EBIT margin) with continued revenue growth (+5.69%) and materially improved margins vs FY2024. Balance sheet is conservatively leveraged (~0.15x debt/equity). Cash generation is solid with FCF ~91% of net income, but FCF growth is negative (-14.7%) and results are notably cyclical.

Income Statement

TTM (Trailing-Twelve-Months) results show strong profitability with ~61% gross margin and ~27% net margin, alongside very high operating profitability (~38% EBIT margin). Revenue is still growing (+5.69% TTM), and margins have expanded materially versus FY2024, which was a down year (revenue decline and much lower profitability). The main drawback is cyclicality: results have swung meaningfully across years, indicating earnings sensitivity to industry demand.

Balance Sheet

Leverage is conservative with low debt relative to equity (about 0.15x TTM), supporting financial flexibility. Equity and asset base have grown over time, and returns on equity are exceptionally strong in TTM (~48%), reflecting high profitability. The key watch-out is that such elevated returns can be cycle-driven and may normalize if earnings cool, though the balance sheet itself remains solid.

Cash Flow

Cash generation is healthy in TTM with operating cash flow (~334B) and free cash flow (~304B) closely tracking earnings (free cash flow at ~91% of net income). However, free cash flow growth is negative in TTM (-14.7%), and history shows volatility—FY2024 had notably weak cash conversion versus profits. Overall cash flow quality is good today, but it can fluctuate materially through the cycle.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.03T	779.71B	486.51B	560.19B	416.90B	312.79B
Gross Profit	644.22B	445.08B	246.03B	319.06B	235.91B	168.29B
EBITDA	437.54B	257.13B	105.63B	193.38B	131.59B	83.25B
Net Income	288.49B	161.18B	62.29B	130.40B	87.30B	69.79B
Balance Sheet
Total Assets	1.02T	854.21B	671.23B	600.22B	494.70B	422.64B
Cash, Cash Equivalents and Short-Term Investments	329.32B	262.54B	106.70B	85.54B	116.58B	149.16B
Total Debt	102.35B	93.50B	94.44B	50.84B	43.46B	11.85B
Total Liabilities	346.22B	347.67B	240.05B	231.53B	200.07B	142.27B
Stockholders Equity	674.30B	506.54B	431.18B	368.69B	294.62B	280.37B
Cash Flow
Free Cash Flow	304.00B	268.56B	12.13B	46.64B	60.67B	54.55B
Operating Cash Flow	334.16B	285.97B	32.67B	70.22B	78.89B	67.83B
Investing Cash Flow	-50.09B	-42.19B	-27.94B	-26.71B	-46.91B	-16.83B
Financing Cash Flow	-150.39B	-82.82B	10.76B	-77.43B	-68.74B	-30.41B

Advantest Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26860.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 26860 is above the 20-day moving average (MA) of 22625.75, above the 50-day MA of 20992.50, and above the 200-day MA of 14071.06, indicating a bullish trend. The MACD of 1387.37 indicates Negative momentum. The RSI at 65.88 is Neutral, neither overbought nor oversold. The STOCH value of 75.42 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6920	81 Outperform	¥3.54T	37.32	53.12%	1.11%	32.51%	57.19%
6857	77 Outperform	¥18.69T	64.65	47.37%	0.25%	63.36%	149.43%
6146	75 Outperform	¥7.64T	58.20	25.78%	0.79%	13.45%	20.37%
8035	73 Outperform	¥20.07T	37.09	27.73%	1.79%	16.74%	16.03%
7735	72 Outperform	¥1.87T	21.31	21.73%	2.29%	11.29%	11.38%
6723	63 Neutral	¥4.60T	-93.09	-2.51%	1.31%	-10.97%	-118.87%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%