Ferrotec Holdings (6890) AI Stock Analysis

• Market Cap: ¥313.18B
• Dividend Yield: 3.28%
• Average Volume (3M): 466.89K
• Price to Earnings (P/E): 24.3
• Beta (1Y): 1.50
• Revenue Growth: 11.15%
• EPS Growth: -19.39%
• Country: US
• Employees: 14,192
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): N/A
• Shares Outstanding: 47,117,950
• 10 Day Avg. Volume: 447,710
• 30 Day Avg. Volume: 466,890
• PEG Ratio: 2.25
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 0.46
• P/FCF Ratio: -4.99
• 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: ¥6,556.57
• Price Target Upside: -3.44% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: ¥7,392.00 ▲(8.87% Upside)

The score is primarily driven by strong financial performance (rapid growth and solid balance sheet), tempered by negative free cash flow from heavy investment. Technicals show strong trend strength but extreme overbought readings increase near-term downside risk, while valuation appears reasonable rather than clearly cheap.

Positive Factors

Sustained revenue growth

Ferrotec's multi-year revenue expansion reflects durable demand from semiconductor customers and successful scaling of product lines. Persistent top-line growth supports long-term investment in capacity, strengthens customer relationships, and underpins sustainable market share gains across cycles.

Strong equity base / balance sheet

A substantially larger equity base provides capital to fund capex and absorb semiconductor cycle swings without immediate solvency stress. Stable equity coverage improves credit profile and supports ongoing investments in manufacturing and R&D that are critical for long-term competitiveness.

Diversified semiconductor and thermal product exposure

Ferrotec's mix of consumables, thermoelectric modules and equipment creates multiple recurring and project-based revenue streams. Diversification across components, thermal solutions, and equipment reduces single-product risk and leverages long supplier qualification cycles in semiconductor supply chains.

Negative Factors

Persistently negative free cash flow

Heavy investment driving increasingly negative free cash flow can strain liquidity and force external financing or slower returns to shareholders. If capex fails to translate into higher long-term cash returns, persistent negative FCF undermines financial resilience and strategic optionality.

Rising absolute debt levels

Higher total debt raises interest and refinancing risk and reduces financial flexibility during downturns. Even with improving equity, elevated leverage can amplify earnings volatility and constrain the company's ability to pursue opportunistic investments or weather semiconductor demand troughs.

Compression in operating (EBIT) margin

A sustained drop in EBIT margin halves operating profitability, reducing the cushion to fund R&D and capex. If margin pressure reflects structural cost increases or unfavorable mix, it can impair return on invested capital and make long-term competition and reinvestment more costly.

Ferrotec Holdings Business Overview & Revenue Model

Company Description

Ferrotec Holdings Corporation engages in semiconductor equipment-related, electronic device, and other businesses in Japan and internationally. The company offers vacuum seals, silicon wafers, vacuum coating systems, quartz products, ceramics products, CVD-SiC parts, silicon parts, and quartz crucibles, as well as parts cleaning services for semiconductor and FPD manufacturing equipment. It also provides ferrofluids; thermo-electric modules; power semiconductor DCB and AMB substrates; ingots, wafers, and cells for solar modules; industrial cleaning equipment; and machine blades. In addition, the company manufactures and sells automobile related products; manufactures and sells devices, parts, consumables, and consumable components for semiconductor manufacturing equipment; natural energy machinery; and scientific equipment and supplies, as well as imports and exports goods, technology, and systems. Additionally, it offers mechanical cutters for information, steel, paper pulp and meat industry; and industrial machines and parts, as well as landscaping and greening, green space management, and slope construction services. The company was formerly known as Fellow Tech Holdings Co., Ltd. and changed its name to Ferrotec Holdings Corporation in April 2007. Ferrotec Holdings Corporation was founded in 1980 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Ferrotec generates revenue through several key streams, primarily from the sale of specialized materials and equipment used in semiconductor manufacturing and other high-tech industries. The company's revenue model is built on direct sales to large manufacturers and technology firms, as well as long-term contracts for ongoing supply agreements. Significant partnerships with major players in the semiconductor and electronics sectors enhance its market reach and stability. Additionally, Ferrotec benefits from its ability to innovate and deliver tailored solutions that meet the evolving demands of its customers, which further drives sales and profitability.

Ferrotec Holdings Financial Statement Overview

Summary

Strong top-line expansion and profitability trend, supported by a growing equity base and manageable leverage. The main offset is persistently negative free cash flow driven by heavy capex, which raises near-term cash generation risk.

Income Statement

Ferrotec Holdings has demonstrated strong revenue growth with a significant increase from ¥81.6 billion in 2020 to ¥274.39 billion in 2025. The company's gross profit margin and EBIT margin are stable, although the EBIT margin saw a decrease from 16.62% in 2023 to 8.78% in 2025. Net profit margin has improved since 2020, indicating strong profitability. The consistency in EBITDA margin suggests operational efficiency. Overall, the income statement reflects robust growth and profitability, with minor fluctuations in margins that are typical in the semiconductor industry.

Balance Sheet

The company's balance sheet reveals a healthy equity base, with stockholders' equity increasing from ¥48.47 billion in 2020 to ¥236.83 billion in 2025. The debt-to-equity ratio is manageable, though the increase in total debt to ¥168.28 billion by 2025 suggests increased leverage. The equity ratio has been stable, reflecting a solid financial foundation. Return on Equity (ROE) is strong, showing effective utilization of equity. While there is a rise in liabilities, the overall balance sheet remains solid with good equity coverage.

Cash Flow

Ferrotec Holdings' cash flow statement highlights challenges in free cash flow, which has been negative over the years, with an increase in capital expenditure impacting free cash flow from -¥13.95 billion in 2023 to -¥25.17 billion in 2025. The operating cash flow remains strong, but the free cash flow to net income ratio indicates potential concerns with cash generation relative to profits. The company appears to be investing heavily in growth, which affects short-term cash flow metrics.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	282.18B	274.39B	222.43B	210.81B	133.82B	91.31B
Gross Profit	74.53B	73.36B	69.86B	72.08B	48.68B	30.78B
EBITDA	53.71B	51.63B	44.59B	55.98B	42.61B	21.95B
Net Income	13.52B	15.69B	15.15B	29.70B	26.66B	8.28B
Balance Sheet
Total Assets	580.96B	600.59B	510.03B	410.65B	264.77B	177.19B
Cash, Cash Equivalents and Short-Term Investments	103.08B	117.73B	117.25B	103.11B	52.58B	30.20B
Total Debt	169.38B	168.28B	140.85B	72.26B	39.52B	49.77B
Total Liabilities	274.25B	277.04B	231.86B	161.00B	103.82B	98.95B
Stockholders Equity	223.31B	236.83B	204.41B	183.77B	131.07B	67.18B
Cash Flow
Free Cash Flow	0.00	-25.17B	-46.51B	-13.95B	-15.99B	-1.08B
Operating Cash Flow	0.00	26.07B	28.72B	43.02B	17.83B	13.22B
Investing Cash Flow	0.00	-39.63B	-92.40B	-68.76B	-29.40B	-20.88B
Financing Cash Flow	0.00	18.96B	60.42B	68.72B	30.60B	21.69B

Ferrotec Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6790.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6890, the sentiment is Positive. The current price of 6790 is above the 20-day moving average (MA) of 5678.50, above the 50-day MA of 5170.20, and above the 200-day MA of 3826.71, indicating a bullish trend. The MACD of 453.50 indicates Negative momentum. The RSI at 86.02 is Negative, neither overbought nor oversold. The STOCH value of 88.77 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6890.

Ferrotec Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5384	77 Outperform	¥206.82B	20.72	―	3.09%	14.85%	29.86%
6966	75 Outperform	¥137.98B	13.42	―	2.45%	4.60%	-21.64%
6890	73 Outperform	¥313.18B	24.34	5.41%	3.28%	11.15%	-19.39%
3445	73 Outperform	¥100.92B	9.54	―	0.93%	28.52%	43.16%
6871	70 Outperform	¥335.71B	33.32	―	1.02%	29.60%	24.39%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6707	46 Neutral	¥135.85B	118.20	―	―	-51.82%	-96.08%