Advantest (6857) AI Stock Analysis

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Advantest

(OTC:6857)

Rating:82Outperform

Price Target:

¥9,644.00

▲(16.00%Upside)

Advantest's strong financial performance and positive earnings call contribute significantly to its overall score. The stock exhibits bullish momentum, though valuation concerns due to a high P/E ratio and low dividend yield slightly offset these strengths.

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

Market Cap

$5.85T

Dividend Yield0.47%

Average Volume (3M)15.66M

Price to Earnings (P/E)36.3

Beta (1Y)1.42

Revenue Growth60.27%

EPS Growth158.92%

CountryJP

Employees6,766

SectorTechnology

Sector Strength84

IndustrySemiconductors

Share Statistics

EPS (TTM)54.46

Shares Outstanding766,141,240

10 Day Avg. Volume16,173,280

30 Day Avg. Volume15,659,646

Financial Highlights & Ratios

PEG Ratio1.66

Price to Book (P/B)9.70

Price to Sales (P/S)0.00

P/FCF Ratio18.29

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$9,001.45

Price Target Upside8.27% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering6

Advantest Business Overview & Revenue Model

Company DescriptionAdvantest Corporation is a leading Japanese company specializing in the design, manufacture, and sale of semiconductor test systems. The company operates primarily in the semiconductor and electronics sectors, providing advanced test solutions for a wide range of semiconductor devices, including memory, logic, and system-on-chip (SoC) components. Advantest's core products and services include automated test equipment (ATE), handlers, and measurement instruments, which are used by semiconductor manufacturers to ensure the functionality and performance of their products.

How the Company Makes MoneyAdvantest makes money through the sale of its semiconductor test equipment and related services. The company's primary revenue streams come from the production and sale of automated test equipment (ATE) used in the testing of various semiconductor devices, including memory and logic integrated circuits, SoCs, and other electronic components. Advantest also generates revenue from providing maintenance and support services for its equipment, as well as from software solutions that enhance the testing process. Additionally, the company benefits from strategic partnerships and collaborations with semiconductor manufacturers and other industry players, which help drive sales and innovation in its product offerings.

Advantest Earnings Call Summary

Earnings Call Date:Apr 25, 2025

(Q4-2024)

% Change Since: 44.99%|

Next Earnings Date:Jul 23, 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 strong financial performance across all metrics, with significant revenue growth, high profit margins, low leverage, and exceptional cash flow management, indicating robust operational efficiency and a solid financial base.

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.

Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
779.71B	486.51B	560.19B	416.90B	312.79B
	Gross Profit
445.08B	246.03B	319.06B	235.91B	168.29B
	EBIT
249.69B	87.07B	167.69B	114.73B	70.73B
	EBITDA
257.13B	116.73B	189.08B	129.70B	81.56B
	Net Income Common Stockholders
161.18B	62.29B	130.40B	87.30B	69.79B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
262.54B	106.70B	85.54B	116.58B	149.16B
	Total Assets
854.21B	671.23B	600.22B	494.70B	422.64B
	Total Debt
93.50B	94.44B	50.84B	113.81B	11.85B
	Net Debt
-169.04B	-12.26B	-34.69B	-2.77B	-137.31B
	Total Liabilities
347.67B	240.05B	231.53B	200.07B	142.27B
	Stockholders Equity
506.54B	431.18B	368.69B	294.62B	280.37B
Cash Flow		Free Cash Flow
268.56B	12.13B	46.64B	60.67B	54.55B
	Operating Cash Flow
285.97B	32.67B	70.22B	78.89B	67.83B
	Investing Cash Flow
-42.19B	-27.94B	-26.71B	-46.91B	-16.83B
	Financing Cash Flow
-82.82B	10.76B	-77.43B	-68.74B	-30.41B

Advantest Technical Analysis

Technical Analysis Sentiment

Positive

Last Price8314.00

Price Trends

50DMA

6532.24

Positive

100DMA

7609.13

Positive

200DMA

7739.99

Positive

Market Momentum

MACD

332.90

Negative

RSI

68.77

Neutral

STOCH

95.69

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 8314 is above the 20-day moving average (MA) of 7328.50, above the 50-day MA of 6532.24, and above the 200-day MA of 7739.99, indicating a bullish trend. The MACD of 332.90 indicates Negative momentum. The RSI at 68.77 is Neutral, neither overbought nor oversold. The STOCH value of 95.69 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6920	84 Outperform	$1.31T	18.65	44.53%	1.74%	-2.37%	4.89%
6857	82 Outperform	$5.85T	36.26	34.01%	0.47%	60.27%	158.92%
8035	81 Outperform	$10.95T	20.00	29.69%	2.50%	32.83%	50.73%
7735	81 Outperform	$1.05T	10.57	24.78%	2.69%	23.84%	38.09%
6723	74 Outperform	$3.40T	20.72	7.22%	1.40%	-10.70%	-47.63%
6146	73 Outperform	$3.48T	28.08	27.22%	1.22%	27.88%	47.09%
Sector *	62 Neutral	$11.80B	10.31	-7.45%	2.91%	7.43%	-7.78%

* Technology Sector Average

Performance Comparison

JP:6857

Advantest

8,314.00

2,995.54

56.32%

JP:6146

Disco

33,140.00

-25,639.56

-43.62%

JP:8035

Tokyo Electron

23,855.00

-10,094.65

-29.73%

JP:6723

Renesas Electronics

1,894.00

-1,044.82

-35.55%

JP:7735

SCREEN Holdings Co

10,615.00

-4,119.15

-27.96%

JP:6920

Lasertec

14,890.00

-22,061.23

-59.70%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.