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Advantest Corp. (JP:6857)
:6857
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Advantest
(6857)
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Select Model
Rating:75Outperform
Price Target:
¥22,709.00
▲(18.43% Upside)
Advantest's strong financial performance and positive technical indicators are key strengths, supporting a favorable stock outlook. However, the high P/E ratio suggests potential overvaluation, which tempers the overall score.
Positive Factors
Revenue Growth
Consistent revenue growth reflects Advantest's strong market position and demand for its semiconductor testing solutions, supporting long-term business expansion.
Balance Sheet Strength
A strong balance sheet with low leverage and high equity base enhances financial stability and provides flexibility for future investments.
Cash Flow Generation
Strong cash generation supports ongoing operations and strategic initiatives, indicating effective cash management and financial health.
Negative Factors
High P/E Ratio
A high P/E ratio suggests potential overvaluation, which could impact investor sentiment and limit stock price appreciation potential.
Dividend Yield
A low dividend yield offers limited income potential for investors, which may reduce attractiveness for income-focused portfolios.
Market Volatility
Higher market volatility, as indicated by the beta, can lead to increased risk and uncertainty for investors, affecting long-term investment stability.
Advantest (6857) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
$14.03T
Dividend Yield0.25%
Average Volume (3M)13.33M
Price to Earnings (P/E)53.7
Beta (1Y)1.62
Revenue Growth63.36%
EPS Growth149.43%
CountryJP
Employees6,766
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)109.05
Shares Outstanding766,141,240
10 Day Avg. Volume15,502,300
30 Day Avg. Volume13,331,246
Financial Highlights & Ratios
PEG Ratio0.19
Price to Book (P/B)9.42
Price to Sales (P/S)6.12
P/FCF Ratio17.76
Enterprise Value/Market Cap0.54
Enterprise Value/Revenue7.82
Enterprise Value/Gross Profit12.88
Enterprise Value/Ebitda19.39
Forecast
1Y Price Target
$20,150.18Price Target Upside5.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 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 Earnings Call Summary
Earnings Call Date:Apr 25, 2025
(Q4-2024)
| % Change Since: |
Next Earnings Date:Feb 04, 2026
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 across all verticals. The income statement reflects significant growth and profitability, supported by efficient operations. The balance sheet is stable with low leverage and high returns on equity. Cash flow generation is robust, ensuring liquidity and financial flexibility. The company is well-positioned for continued growth, although monitoring debt levels and maintaining cash flow strength will be crucial.Income Statement
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.90
Very Positive
Balance Sheet
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.85
Very Positive
Cash Flow
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.88
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 977.28B | 779.71B | 486.51B | 560.19B | 416.90B | 312.79B |
| Gross Profit | 593.41B | 445.08B | 246.03B | 319.06B | 235.91B | 168.29B |
| EBITDA | 394.09B | 257.13B | 105.63B | 193.38B | 131.59B | 83.25B |
| Net Income | 261.68B | 161.18B | 62.29B | 130.40B | 87.30B | 69.79B |
Balance Sheet | ||||||
| Total Assets | 971.54B | 854.21B | 671.23B | 600.22B | 494.70B | 422.64B |
| Cash, Cash Equivalents and Short-Term Investments | 298.20B | 262.54B | 106.70B | 85.54B | 116.58B | 149.16B |
| Total Debt | 91.14B | 93.50B | 94.44B | 50.84B | 43.46B | 11.85B |
| Total Liabilities | 361.20B | 347.67B | 240.05B | 231.53B | 200.07B | 142.27B |
| Stockholders Equity | 610.34B | 506.54B | 431.18B | 368.69B | 294.62B | 280.37B |
Cash Flow | ||||||
| Free Cash Flow | 304.45B | 268.56B | 12.13B | 46.64B | 60.67B | 54.55B |
| Operating Cash Flow | 333.03B | 285.97B | 32.67B | 70.22B | 78.89B | 67.83B |
| Investing Cash Flow | -47.48B | -42.19B | -27.94B | -26.71B | -46.91B | -16.83B |
| Financing Cash Flow | -153.97B | -82.82B | 10.76B | -77.43B | -68.74B | -30.41B |
Advantest Technical Analysis
Neutral
19175.00
Price Trends
19339.00
Negative
15690.12
Positive
11814.56
Positive
Market Momentum
218.16
Positive
46.01
Neutral
25.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6857, the sentiment is Neutral. The current price of 19175 is below the 20-day moving average (MA) of 19973.00, below the 50-day MA of 19339.00, and above the 200-day MA of 11814.56, indicating a neutral trend. The MACD of 218.16 indicates Positive momentum. The RSI at 46.01 is Neutral, neither overbought nor oversold. The STOCH value of 25.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:6857.
Advantest Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | ¥1.17T | 13.34 | 21.73% | 2.36% | 11.29% | 11.38% | |
75 Outperform | $14.03T | 53.72 | 47.37% | 0.25% | 63.36% | 149.43% | |
73 Outperform | $5.02T | 39.73 | 25.78% | 0.78% | 13.45% | 20.37% | |
73 Outperform | $14.19T | 26.22 | 27.73% | 1.88% | 16.74% | 16.03% | |
67 Neutral | $2.66T | 28.02 | 53.12% | 1.09% | 32.51% | 57.19% | |
64 Neutral | ¥3.65T | -72.76 | -2.51% | 1.36% | -10.97% | -118.87% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
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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.