Megachips (6875) AI Stock Analysis

• Market Cap: ¥92.31B
• Dividend Yield: 1.16%
• Average Volume (3M): 101.35K
• Price to Earnings (P/E): 16.9
• Beta (1Y): 0.75
• Revenue Growth: -27.90%
• EPS Growth: 35.64%
• Country: JP
• Employees: 339
• Sector: Technology
• Sector Strength: 91
• Industry: Semiconductors
• EPS (TTM): 20.67
• Shares Outstanding: 20,652,400
• 10 Day Avg. Volume: 67,360
• 30 Day Avg. Volume: 101,353
• PEG Ratio: -18.95
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -11.22
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 68 Neutral
• Price Target: ―

Megachips' overall stock score reflects a combination of robust financial stability with significant challenges in revenue and cash flow generation. While the technical analysis indicates a bearish trend, the stock's valuation appears attractive, suggesting potential for recovery if operational issues are addressed. Investors should be cautious but might consider the stock for its valuation and dividend yield.

Megachips Business Overview & Revenue Model

Company Description

Megachips Corporation, headquartered in Japan, specializes in the design and development of system-on-chip (SoC) solutions. The company operates primarily in the semiconductor industry, offering a range of products that include custom SoCs, application-specific integrated circuits (ASICs), and electronic components for consumer electronics, industrial, and automotive sectors. Megachips focuses on delivering cutting-edge technology that enhances the functionality and performance of electronic devices.

How the Company Makes Money

Megachips makes money primarily through the sale of its semiconductor products, including custom SoCs and ASICs. The company generates revenue by designing and manufacturing these chips, which are then sold to various electronics manufacturers across different industries. Key revenue streams include the consumer electronics market, where Megachips' solutions are integrated into products such as smartphones, gaming consoles, and wearable devices. Additionally, the company earns from its involvement in the automotive and industrial sectors, providing chips that enable advanced functionalities in vehicles and industrial equipment. Strategic partnerships with original equipment manufacturers (OEMs) and other technology firms also play a crucial role in expanding its market reach and driving sales.

Megachips Financial Statement Overview

Summary

Megachips presents a mixed financial profile. The balance sheet is robust, with a high equity ratio and low debt, providing financial stability. However, the income statement shows declining revenues and moderate profitability, which could pressure future earnings. The cash flow statement indicates recent liquidity challenges, although past performance was stronger. Management should focus on reversing the revenue decline and addressing cash flow issues to sustain long-term growth.

Income Statement

Megachips shows a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) data reveals a gross profit margin of 19.95% and a net profit margin of 12.92%, indicating moderate profitability. However, the revenue has been declining, with a significant decrease from the previous year, which is concerning. The EBIT margin stands at 6.68%, and the EBITDA margin at 9.09%, reflecting operational efficiency but leaving room for improvement. Overall, the margins are stable, but the revenue decline is a notable weakness.

Balance Sheet

The balance sheet of Megachips is strong, with a high equity ratio of 74.53% reflecting a solid financial structure. The company has a negligible debt-to-equity ratio due to its low total debt, enhancing its financial stability. Return on equity is substantial at 3.84%, showcasing effective utilization of shareholder funds. The significant stockholders' equity compared to total assets indicates a low risk of insolvency, positioning the company well for future growth.

Cash Flow

Megachips' cash flow statement shows some challenges, primarily due to negative operating cash flow in the TTM period. The free cash flow has also turned negative, indicating potential liquidity issues. However, the company had previously strong cash flows, which might cushion the recent downturn. The operating cash flow to net income ratio is negative, pointing to cash generation issues, while free cash flow to net income is also negative, suggesting inefficiencies in capital usage.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	44.89B	57.94B	70.72B	75.26B	83.81B	65.76B
Gross Profit	8.95B	11.44B	12.05B	13.61B	13.31B	16.70B
EBITDA	4.08B	9.51B	11.36B	37.38B	29.69B	4.55B
Net Income	5.80B	4.49B	7.09B	27.54B	20.92B	-1.79B
Balance Sheet
Total Assets	202.81B	126.61B	89.02B	89.84B	74.63B	72.35B
Cash, Cash Equivalents and Short-Term Investments	14.74B	28.06B	20.72B	25.77B	21.41B	17.26B
Total Debt	6.00B	0.00	0.00	0.00	4.79B	28.49B
Total Liabilities	51.30B	23.94B	14.49B	22.41B	24.58B	41.32B
Stockholders Equity	151.17B	102.41B	74.54B	67.43B	50.04B	28.19B
Cash Flow
Free Cash Flow	-7.30B	7.05B	295.32M	-1.48B	4.49B	26.62B
Operating Cash Flow	-4.83B	8.16B	1.24B	-195.28M	5.51B	28.26B
Investing Cash Flow	3.05B	214.06M	-5.52B	20.02B	17.02B	-2.54B
Financing Cash Flow	-2.08B	-5.39B	-1.74B	-16.53B	-18.81B	-18.60B

Megachips Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5260.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6875, the sentiment is Positive. The current price of 5260 is above the 20-day moving average (MA) of 5088.75, above the 50-day MA of 4947.90, and above the 200-day MA of 5152.31, indicating a bullish trend. The MACD of 94.93 indicates Positive momentum. The RSI at 56.79 is Neutral, neither overbought nor oversold. The STOCH value of 40.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6875.

Megachips Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6501	79 Outperform	¥18.46T	30.18	10.50%	1.09%	0.56%	5.36%
6701	77 Outperform	¥5.16T	28.88	8.97%	0.74%	-1.55%	17.21%
6752	75 Outperform	¥3.38T	9.23	7.85%	2.76%	-0.45%	-17.53%
6758	73 Outperform	$22.00T	19.08	14.32%	0.56%	-0.49%	19.71%
6723	73 Outperform	$3.43T	20.91	7.22%	1.45%	-10.70%	-47.63%
Sector *	69 Neutral	¥229.01B	14.09	7.50%	2.69%	9.25%	8.21%
6875	68 Neutral	¥92.31B	16.88	4.83%	1.16%	-27.90%	35.64%