Advantest (6857) AI Stock Analysis

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Advantest

(OTC:6857)

Rating:78Outperform

Price Target:

¥11,930.00

▲(5.62% Upside)

Advantest's strong financial performance is the primary driver of its high score, supported by an impressive earnings call outlook. However, a high valuation and moderate technical indicators slightly temper the overall score. The stock is well-positioned in the semiconductor industry with promising growth prospects, although the current valuation may deter some investors.

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

Market Cap

¥8.27T

Dividend Yield0.35%

Average Volume (3M)12.61M

Price to Earnings (P/E)36.2

Beta (1Y)1.43

Revenue Growth72.67%

EPS Growth196.67%

CountryJP

Employees6,766

SectorTechnology

Sector Strength94

IndustrySemiconductors

Share Statistics

EPS (TTM)123.14

Shares Outstanding766,141,240

10 Day Avg. Volume11,938,820

30 Day Avg. Volume12,613,510

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

¥11,513.90

Price Target Upside1.94% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering10

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: 7.93%|

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 demonstrates exceptional financial performance with strong revenue growth of 60.25% and robust profit margins. The balance sheet shows solid financial health with low leverage and a high equity ratio. Cash flow management is outstanding, with significant free cash flow growth, indicating efficient operations and sustainability.

Income Statement

Very Positive

Advantest shows exceptional revenue growth with a notable increase of 60.25% from 2024 to 2025. The company maintains robust profit margins, with a gross profit margin of 57.08% and a net profit margin of 20.68% in 2025. Both EBIT and EBITDA margins remain strong at 32.02% and 32.98%, respectively, indicating operational efficiency and profitability.

Balance Sheet

Very Positive

The company demonstrates solid financial health, with a debt-to-equity ratio of 0.18, suggesting low leverage. The equity ratio stands at 59.28%, reflecting a strong equity base. Return on Equity (ROE) is impressive at 31.82%, highlighting effective utilization of equity to generate profits.

Cash Flow

Very Positive

Advantest exhibits robust cash flow management with a significant free cash flow growth rate of 2114.63% from 2024 to 2025, driven by strong operating cash flows. The operating cash flow to net income ratio is 1.77, and the free cash flow to net income ratio is 1.67, indicating efficient cash conversion from net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	779.75B	779.71B	486.51B	560.19B	416.90B	312.79B
Gross Profit	445.13B	445.08B	246.03B	319.06B	235.91B	168.29B
EBITDA	258.00B	254.59B	105.63B	193.38B	131.59B	81.56B
Net Income	161.21B	161.18B	62.29B	130.40B	87.30B	69.79B
Balance Sheet
Total Assets	854.21B	854.21B	671.23B	600.22B	494.70B	422.64B
Cash, Cash Equivalents and Short-Term Investments	262.54B	262.54B	106.70B	85.54B	116.58B	149.16B
Total Debt	93.50B	93.50B	94.44B	50.84B	113.81B	11.85B
Total Liabilities	347.67B	347.67B	240.05B	231.53B	200.07B	142.27B
Stockholders Equity	506.54B	506.54B	431.18B	368.69B	294.62B	280.37B
Cash Flow
Free Cash Flow	268.56B	268.56B	12.13B	46.64B	60.67B	54.55B
Operating Cash Flow	285.97B	285.97B	32.67B	70.22B	78.89B	67.83B
Investing Cash Flow	-42.19B	-42.19B	-27.94B	-26.71B	-46.91B	-16.83B
Financing Cash Flow	-82.82B	-82.82B	10.76B	-77.43B	-68.74B	-30.41B

Advantest Technical Analysis

Technical Analysis Sentiment

Positive

Last Price11295.00

Price Trends

50DMA

10239.48

Positive

100DMA

8386.98

Positive

200DMA

8616.15

Positive

Market Momentum

MACD

158.90

Negative

RSI

58.48

Neutral

STOCH

86.46

Negative

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 11295 is above the 20-day moving average (MA) of 10839.25, above the 50-day MA of 10239.48, and above the 200-day MA of 8616.15, indicating a bullish trend. The MACD of 158.90 indicates Negative momentum. The RSI at 58.48 is Neutral, neither overbought nor oversold. The STOCH value of 86.46 is Negative, 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	78 Outperform	¥8.27T	36.23	44.94%	0.35%	72.67%	196.67%
Sector *	61 Neutral	$36.30B	7.26	-7.27%	1.97%	7.74%	-7.92%
DINRF	―	$7.77B	12.21	24.92%	2.28%	―	―
DISPF	―	$30.66B	37.14	28.07%	0.97%	―	―
LSRCF	―	$9.84B	15.78	47.47%	2.23%	―	―
RNECF	―	$22.04B	20.80	-4.72%	1.61%	―	―
TOELF	―	$66.82B	18.10	29.80%	―	―	―

* Technology Sector Average

Performance Comparison

JP:6857

Advantest

11,295.00

4,807.03

74.09%

DINRF

SCREEN Holdings Co

91.60

15.56

20.46%

DISPF

Disco

287.88

-26.91

-8.55%

LSRCF

Lasertec

98.99

-97.17

-49.54%

RNECF

Renesas Electronics

13.00

-2.66

-16.99%

TOELF

Tokyo Electron

145.04

-42.57

-22.69%

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: Jul 29, 2025