Canon Electronics Inc. (7739) AI Stock Analysis

• Market Cap: ¥112.78B
• Dividend Yield: 2.57%
• Average Volume (3M): 70.26K
• Price to Earnings (P/E): 15.6
• Beta (1Y): 0.89
• Revenue Growth: 7.82%
• EPS Growth: 3.26%
• Country: JP
• Employees: 5,394
• Sector: Industrials
• Sector Strength: 72
• Industry: Computer Hardware
• EPS (TTM): 38.40
• Shares Outstanding: 42,206,540
• 10 Day Avg. Volume: 103,690
• 30 Day Avg. Volume: 70,260
• PEG Ratio: 0.77
• Price to Book (P/B): 0.81
• Price to Sales (P/S): 0.97
• P/FCF Ratio: 8.98
• 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: ¥2,829.00
• Price Target Upside: 3.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 75 Outperform
• Price Target: ¥2,829.00 ▲(3.78% Upside)

Canon Electronics demonstrates strong financial performance with robust revenue and profitability growth, a solid balance sheet, and effective cash flow management. While the technical analysis indicates some caution, the company's valuation is reasonable, making it an attractive investment in terms of growth and income generation.

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

Canon Electronics exhibits a strong financial profile with impressive growth across income, balance sheet, and cash flow metrics. The company has demonstrated robust financial health with consistent revenue growth, strong profitability margins, a solid balance sheet with minimal leverage, and commendable cash flow management.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	103.03B	100.66B	96.32B	96.51B	82.61B	74.61B
Gross Profit	20.31B	20.34B	20.48B	19.40B	18.55B	16.86B
EBITDA	11.92B	13.16B	12.32B	12.56B	10.32B	8.55B
Net Income	7.23B	7.66B	6.57B	6.92B	5.39B	4.41B
Balance Sheet
Total Assets	143.13B	141.89B	131.15B	137.49B	126.27B	117.21B
Cash, Cash Equivalents and Short-Term Investments	29.91B	31.02B	27.48B	24.93B	23.96B	23.83B
Total Debt	758.00M	829.00M	172.00M	4.33B	3.53B	2.30B
Total Liabilities	20.98B	20.15B	17.30B	26.20B	23.37B	19.58B
Stockholders Equity	121.96B	121.57B	113.69B	107.63B	100.22B	95.55B
Cash Flow
Free Cash Flow	2.81B	10.91B	6.86B	-1.17B	-3.00B	690.00M
Operating Cash Flow	3.92B	12.69B	10.20B	4.16B	2.74B	5.30B
Investing Cash Flow	-1.73B	-9.46B	-3.31B	-5.49B	-4.98B	-3.62B
Financing Cash Flow	-1.42B	-2.62B	-2.46B	1.72B	471.00M	1.10B

Canon Electronics Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2726.00
• 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:7739, the sentiment is Neutral. The current price of 2726 is below the 20-day moving average (MA) of 2762.60, above the 50-day MA of 2685.40, and above the 200-day MA of 2505.16, indicating a neutral trend. The MACD of 27.28 indicates Positive momentum. The RSI at 47.87 is Neutral, neither overbought nor oversold. The STOCH value of 32.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7739.

Canon Electronics Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6750	75 Outperform	€162.92B	14.20	11.97%	2.79%	6.70%	14.87%
7739	75 Outperform	¥112.78B	15.61	―	2.57%	7.82%	3.26%
6588	75 Outperform	€165.93B	7.42	23.27%	1.49%	-1.36%	―
6737	70 Outperform	¥92.76B	24.06	―	4.88%	-0.61%	-16.31%
6724	70 Neutral	$624.13B	14.86	5.27%	3.83%	0.86%	-15.62%
7751	67 Neutral	¥4.25T	24.61	―	3.52%	4.76%	-39.64%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Canon Electronics Inc. Corporate Events

Canon Electronics Reports Mixed Financial Results for First Half of 2025

Canon Electronics Inc. reported its consolidated financial results for the first half of 2025, showing a 5% increase in net sales compared to the previous year, despite a decline in operating and ordinary profits. The company’s comprehensive income dropped significantly by 66.6%, and the year-end dividend per share for 2025 remains undetermined due to uncertain business environments. The company maintains a strong capital adequacy ratio of over 85%, indicating a stable financial position.