Canon Electronics Inc. (7739) AI Stock Analysis

• Market Cap: ¥148.12B
• Dividend Yield: 1.92%
• Average Volume (3M): 69.57K
• Price to Earnings (P/E): 22.8
• Beta (1Y): 0.82
• Revenue Growth: 7.46%
• EPS Growth: -8.01%
• Country: JP
• Employees: 5,394
• Sector: Industrials
• Sector Strength: 72
• Industry: Computer Hardware
• EPS (TTM): 39.13
• Shares Outstanding: 42,206,540
• 10 Day Avg. Volume: 103,040
• 30 Day Avg. Volume: 69,570
• PEG Ratio: -1.52
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 1.43
• P/FCF Ratio: 27.43
• 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
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: ¥4,096.00 ▲(12.37% Upside)

The score is primarily driven by strong financial resilience (near-zero leverage and solid overall financial quality) tempered by recent margin and cash flow conversion softness. Technicals are broadly supportive due to an established uptrend, but momentum signals are mixed. Valuation is a modest headwind given the P/E level and only moderate dividend yield.

Positive Factors

Conservative balance sheet

Very low leverage and a large equity base give Canon Electronics durable financial resilience and flexibility. This supports multi‑year investment, withstands demand downturns, and preserves strategic optionality for capex or M&A, reducing long‑term solvency risk.

Steady multi-year revenue growth

Consistent top‑line growth indicates stable demand for the company’s electronic and precision products across cycles. Sustained revenue expansion supports scale advantages, better fixed‑cost absorption, and provides a platform to invest in higher‑margin offerings over the medium term.

Positive free cash flow trend

Recovery to sustained free cash flow after prior negative years strengthens the company’s ability to fund operations, dividends, and capital investment internally. Improving cash generation underpins long‑term financial sustainability despite periodic volatility.

Negative Factors

Margin compression risk

Declining margins reduce the firm’s ability to convert revenue into sustainable profits, pressuring returns and reinvestment capacity. If driven by structural cost inflation or adverse product mix, margin pressure could persist and materially constrain long‑term profitability.

Weaker cash flow conversion in 2025

A drop in cash flow conversion signals lower earnings quality and potential working capital stress. Persistent weaker conversion limits internal funding for capex/dividends and increases reliance on operating performance recovery to sustain strategic initiatives over coming quarters.

Modest returns on equity

Mid‑single digit ROE indicates modest capital efficiency and slower shareholder value creation relative to higher‑return peers. Over the medium term this may constrain attractiveness to investors and limit the company’s ability to accelerate growth without improving asset productivity.

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 electronic components, particularly image sensors and lens modules, which are essential for digital cameras, smartphones, and other imaging devices. The company also earns money from its semiconductor manufacturing equipment and industrial solutions, which cater to the growing demand for high-tech manufacturing. Key revenue streams include direct sales to original equipment manufacturers (OEMs), partnerships with technology firms for joint development projects, and long-term contracts for supplying specialized components. The company's strategic alliances and collaborations with major brands enhance its market presence and contribute significantly to its earnings.

Canon Electronics Inc. Financial Statement Overview

Summary

Financials are supported by an exceptionally conservative balance sheet (very low leverage and strong equity base), steady multi-year revenue growth, and positive free cash flow. Key risks are 2025 margin compression versus 2023–2024 and weaker year-over-year cash flow conversion in 2025.

Income Statement

Revenue has grown steadily from 2020 to 2025 (annual report), with 2025 showing strong year-over-year growth. Profitability is solid but trending weaker recently: gross, operating, and net margins in 2025 are below 2023–2024 levels, and net income declined versus 2024. Overall, the company shows consistent scale-up with moderate margin compression risk.

Balance Sheet

The balance sheet is very conservative, with extremely low leverage (debt-to-equity near zero in recent years) and a large equity base relative to total assets. Returns on equity are stable in the mid-single digits, reflecting steady profitability but not especially high capital efficiency. The main strength is financial resilience and flexibility; the main weakness is modest return generation.

Cash Flow

Cash generation is positive, with free cash flow meaningfully positive in 2023–2025 and a sharp rebound from negative free cash flow in 2021–2022. However, cash flow conversion weakened in 2025 versus 2024: operating cash flow and free cash flow both fell year-over-year, and free cash flow covered a smaller portion of net income than in 2024. Overall cash flow quality is improving versus earlier years but remains somewhat volatile.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	103.03B	104.42B	100.66B	96.32B	96.51B	82.61B
Gross Profit	20.31B	18.97B	20.34B	20.48B	19.40B	18.55B
EBITDA	11.92B	11.63B	13.16B	12.32B	12.56B	10.32B
Net Income	7.23B	6.50B	7.66B	6.57B	6.92B	5.39B
Balance Sheet
Total Assets	143.13B	147.08B	141.89B	131.15B	137.49B	126.27B
Cash, Cash Equivalents and Short-Term Investments	29.91B	58.47B	31.02B	27.48B	24.93B	23.96B
Total Debt	758.00M	639.00M	829.00M	172.00M	4.33B	3.53B
Total Liabilities	20.98B	20.12B	20.15B	17.30B	26.20B	23.37B
Stockholders Equity	121.96B	126.77B	121.57B	113.69B	107.63B	100.22B
Cash Flow
Free Cash Flow	2.81B	5.43B	10.91B	6.86B	-1.17B	-3.00B
Operating Cash Flow	3.92B	7.40B	12.69B	10.20B	4.16B	2.74B
Investing Cash Flow	-1.73B	-2.73B	-9.46B	-3.31B	-5.49B	-4.98B
Financing Cash Flow	-1.42B	-2.85B	-2.62B	-2.46B	1.72B	471.00M

Canon Electronics Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3645.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 3645 is above the 20-day moving average (MA) of 3634.00, above the 50-day MA of 3536.28, and above the 200-day MA of 2814.53, indicating a neutral trend. The MACD of 25.74 indicates Positive momentum. The RSI at 69.37 is Neutral, neither overbought nor oversold. The STOCH value of 6.67 is Positive, 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	76 Outperform	¥148.12B	22.80	―	1.92%	7.46%	-8.01%
6724	75 Outperform	¥632.93B	12.65	6.07%	3.69%	0.48%	6.92%
6750	72 Outperform	¥149.98B	12.34	12.77%	2.84%	4.48%	22.39%
7751	69 Neutral	¥4.52T	12.76	―	3.27%	4.02%	-41.52%
6737	69 Neutral	¥88.43B	17.73	―	4.76%	1.81%	9.07%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6588	55 Neutral	¥142.87B	-21.47	-6.22%	1.61%	-4.91%	-136.94%

Canon Electronics Inc. Corporate Events

Canon Electronics Posts Higher Sales but Lower Profit as It Prepares for Canon Inc. Buyout and Delisting

Canon Electronics Inc. reported a modest 3.7% rise in net sales to ¥104.4 billion for the fiscal year ended 31 December 2025, but profitability weakened as operating profit fell 13.6% to ¥9.0 billion and profit attributable to owners of parent declined 15.1% to ¥6.5 billion, with margins and return on equity also deteriorating year on year. Despite the earnings decline, the balance sheet remained strong with total assets increasing and the equity ratio improving to 86.2%, while operating cash flow stayed positive though lower than the prior year. The company halved its annual dividend to ¥35 per share for 2025 after paying ¥70 per share in 2024, reflecting more cautious shareholder returns policy ahead of a major ownership change. As previously announced, Canon Electronics is scheduled to become a wholly owned subsidiary of Canon Inc., and its shares will be delisted, so the company has suspended dividend and earnings forecasts for the fiscal year ending December 31, 2026, marking the end of its life as a standalone listed entity and shifting future value realization to Canon Inc. shareholders.

The most recent analyst rating on (JP:7739) stock is a Buy with a Yen4204.00 price target. To see the full list of analyst forecasts on Canon Electronics Inc. stock, see the JP:7739 Stock Forecast page.

Canon Inc. Completes Tender Offer to Boost Stake in Canon Electronics

Canon Inc., the controlling shareholder of Canon Electronics Inc., has completed a tender offer for Canon Electronics’ common shares that ran from December 1, 2025 to January 19, 2026, following a board resolution in late November. The tender offer, which targeted up to 18,402,179 shares—effectively all outstanding shares excluding treasury stock—was structured with a minimum acceptance threshold of 4,738,100 shares, ensuring Canon Inc. would only proceed if it could materially increase its stake. The reported completion of the offer marks a further step by Canon Inc. to consolidate ownership of its electronics subsidiary, a move likely to streamline group governance and potentially pave the way for tighter operational integration, though no immediate changes to listing status or post-offer strategy were disclosed in the announcement.

The most recent analyst rating on (JP:7739) stock is a Buy with a Yen4204.00 price target. To see the full list of analyst forecasts on Canon Electronics Inc. stock, see the JP:7739 Stock Forecast page.

Canon Electronics Sets Record Date for Potential Extraordinary Shareholders’ Meeting Tied to Canon Inc. Tender Offer

Canon Electronics Inc., a Japan-listed electronics manufacturer in the Canon Group, has set January 27, 2026 as the record date to determine shareholders eligible to vote at an extraordinary general meeting of shareholders expected around late March 2026. The meeting, which may or may not be convened depending on the outcome of Canon Inc.’s ongoing tender offer to make Canon Electronics its wholly owned subsidiary, is intended to authorize measures such as share consolidation and amendments to the articles of incorporation if Canon Inc. fails to reach the 90% ownership threshold that would allow it to execute a statutory cash-out of minority shareholders without a meeting. If the tender offer is not completed, or if Canon Inc. surpasses the 90% voting-rights threshold and proceeds with a cash-out demand under the Companies Act, the extraordinary meeting will not be held and the record date will not be used, making the decision a procedural step that clarifies potential paths to squeeze out remaining minority shareholders and complete Canon’s planned ownership integration.

The most recent analyst rating on (JP:7739) stock is a Hold with a Yen3913.00 price target. To see the full list of analyst forecasts on Canon Electronics Inc. stock, see the JP:7739 Stock Forecast page.

Canon Electronics Inc. Announces No Year-End Dividend Amid Tender Offer

Canon Electronics Inc. announced that it will not distribute year-end dividends for the fiscal year ending December 31, 2025, contingent upon the successful completion of a tender offer by Canon Inc. to make Canon Electronics a wholly owned subsidiary. This decision aligns with the company’s strategy to enhance shareholder value by prioritizing internal reserves and stable returns, while the tender offer aims to delist the company’s shares.

The most recent analyst rating on (JP:7739) stock is a Buy with a Yen2971.00 price target. To see the full list of analyst forecasts on Canon Electronics Inc. stock, see the JP:7739 Stock Forecast page.

Canon Electronics Supports Canon Inc.’s Tender Offer for Full Ownership

Canon Electronics Inc. has announced its board of directors’ decision to support a tender offer by its controlling shareholder, Canon Inc., to acquire all remaining shares and make Canon Electronics a wholly owned subsidiary. This move is expected to result in the delisting of Canon Electronics’ shares, which may impact shareholders and the company’s market presence.

The most recent analyst rating on (JP:7739) stock is a Buy with a Yen2971.00 price target. To see the full list of analyst forecasts on Canon Electronics Inc. stock, see the JP:7739 Stock Forecast page.