Canon Electronics Inc. (7739) AI Stock Analysis

• Market Cap: ¥101.62B
• Dividend Yield: 2.81%
• Average Volume (3M): 85.51K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 0.87
• Revenue Growth: 8.95%
• EPS Growth: 4.60%
• Country: JP
• Employees: 5,394
• Sector: Industrials
• Sector Strength: 93
• Industry: Computer Hardware
• EPS (TTM): 178.08
• Shares Outstanding: 42,206,540
• 10 Day Avg. Volume: 85,820
• 30 Day Avg. Volume: 85,509
• PEG Ratio: -2.90
• Price to Book (P/B): 0.85
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: 75 Outperform
• Price Target: ¥2,656.00 ▲(6.80%Upside)

Canon Electronics demonstrates a robust financial foundation with consistent income growth and a strong balance sheet, earning high marks in financial performance. Technical analysis indicates potential short-term weakness with bearish momentum. Valuation remains fair with an attractive dividend yield. The overall stock score reflects solid financial health and reasonable valuation, although caution is advised due to short-term technical indicators.

Canon Electronics Inc. Business Overview & Revenue Model

Company Description

Canon Electronics Inc. develops, produces, and sells precision machines and instruments, and electric and electronic machines and instruments in Japan and internationally. The company also provides information devices; and software for computers and communications devices. It offers document, network, check, and flatbed scanners; bundled software.; and dental milling machines. The company was formerly known as Chichibu Eikosha Co., Ltd. and changed its name to Canon Electronics Inc. in 1964. Canon Electronics Inc. was incorporated in 1947 and is headquartered in Chichibu, Japan. Canon Electronics Inc. operates as a subsidiary of Canon Inc.

How the Company Makes Money

Canon Electronics Inc. generates revenue primarily through the sale of its diverse range of electronic components and devices. The company capitalizes on its expertise in precision engineering to deliver high-quality products that are integrated into various applications, from office equipment to automotive systems. Key revenue streams include sales of micro motors, which are essential components in many consumer electronics, and sensors used in automotive and industrial applications. The company benefits from its relationship with Canon Inc., leveraging the brand's global presence and distribution networks to enhance market reach. Additionally, Canon Electronics Inc. engages in partnerships and collaborations to innovate and expand its product offerings, further driving its earnings.

Canon Electronics Inc. Financial Statement Overview

Summary

Canon Electronics exhibits a strong financial profile with impressive growth across income, balance sheet, and cash flow metrics. The company's strategic focus on profitability and stable financial management positions it well for future growth, although maintaining consistent cash flow improvement remains crucial.

Income Statement

Canon Electronics has demonstrated robust financial health with consistent revenue growth, highlighted by a 4.5% increase in 2024 compared to 2023. The gross profit margin remains strong at 20.2%, and net profit margin has improved to 7.6%, reflecting efficient cost management. EBIT and EBITDA margins of 10.3% and 13.3%, respectively, indicate healthy operational profitability. Overall, the company shows a solid upward trajectory in earnings and profitability.

Balance Sheet

The balance sheet is solid with a very low debt-to-equity ratio of 0.007, indicating minimal leverage. The equity ratio is a robust 85.7%, reflecting financial stability and a strong asset base. Return on equity has improved to 6.3%, suggesting effective use of shareholder funds. Canon's financial position is strong, characterized by high liquidity and low risk.

Cash Flow

Canon's cash flow management is commendable with a significant increase in free cash flow, growing by 58.9% in 2024 compared to 2023. The operating cash flow to net income ratio is 1.66, which signifies excellent cash generation abilities. The free cash flow to net income ratio of 1.42 further underscores strong cash profitability. However, past years showed some fluctuations, highlighting the need for maintaining consistent cash flow growth.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	100.66B	96.32B	96.51B	82.61B	74.61B
Gross Profit	20.34B	20.48B	20.71B	18.55B	16.86B
EBITDA	13.16B	12.32B	11.70B	9.59B	8.55B
Net Income	7.66B	6.57B	5.38B	5.39B	4.41B
Balance Sheet
Total Assets	141.89B	131.15B	137.49B	126.27B	117.21B
Cash, Cash Equivalents and Short-Term Investments	31.02B	27.48B	24.93B	23.96B	24.32B
Total Debt	829.00M	172.00M	4.33B	3.39B	2.30B
Total Liabilities	20.15B	17.30B	26.20B	23.37B	19.58B
Stockholders Equity	121.57B	113.69B	107.63B	100.22B	95.55B
Cash Flow
Free Cash Flow	10.91B	6.86B	-1.17B	-3.00B	690.00M
Operating Cash Flow	12.69B	10.20B	4.16B	2.74B	5.30B
Investing Cash Flow	-9.46B	-3.31B	-5.49B	-4.98B	-3.62B
Financing Cash Flow	-2.62B	-2.46B	1.72B	471.00M	1.10B

Canon Electronics Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2487.00
• 50DMA: Negative
• 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:7739, the sentiment is Positive. The current price of 2487 is below the 20-day moving average (MA) of 2509.21, below the 50-day MA of 2524.37, and above the 200-day MA of 2409.15, indicating a neutral trend. The MACD of -10.88 indicates Positive momentum. The RSI at 50.89 is Neutral, neither overbought nor oversold. The STOCH value of 45.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7739.

Canon Electronics Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7739	75 Outperform	¥101.62B	13.97		2.81%	8.95%	4.60%
Sector *	71 Outperform	¥255.19B	13.58	8.48%	3.01%	6.34%	13.16%
9EL	―	€962.66M	14.14	10.97%	2.63%	―	―
SEKEF	―	$4.08B	10.75	6.70%	4.15%	―	―
TECA	―	€936.16M	5.07	30.22%	1.70%	―	―
6737	71 Outperform	¥91.57B	21.35		4.88%	0.03%	-23.96%
7751	70 Outperform	¥3.87T	22.40		3.99%	9.08%	-33.61%

Canon Electronics Inc. Corporate Events

Canon Electronics Reports Mixed Q1 2025 Financial Results

Canon Electronics Inc. announced that their quarterly consolidated financial statements for the three months ended March 31, 2025, have been reviewed by certified public accountants with no changes from the previous announcement. The company reported an 8.1% increase in net sales, while operating profit rose by 8.4%. However, ordinary profit decreased by 1.0%, and profit attributable to owners of the parent fell by 19.1%, indicating mixed financial performance. The capital adequacy ratio remained stable at 85.7%, reflecting a strong financial position. The announcement may impact stakeholders by highlighting areas of growth and concern within the company’s financial operations.

Canon Electronics Reports Q1 2025 Financial Results

Canon Electronics Inc. reported its consolidated financial results for the first quarter ending March 31, 2025, showing an increase in net sales by 8.1% to ¥24,278 million. However, the profit attributable to owners of the parent decreased by 19.1% to ¥1,579 million, indicating challenges in maintaining profitability despite increased sales. The company maintained a stable financial position with a capital adequacy ratio of 85.7%. The forecast for the fiscal year ending December 31, 2025, indicates a modest growth in net sales and profits, reflecting cautious optimism in the face of an uncertain business environment.

Canon Electronics Finalizes Treasury Share Disposal for Compensation

Canon Electronics Inc. has completed the payment procedures for the disposal of 5,700 treasury shares as part of a restricted stock compensation plan. This move, resolved by the Board of Directors, involves a total disposal value of ¥14,557,800, and is aimed at compensating six directors, excluding outside directors, thereby aligning their interests with the company’s performance.