Canon Electronics Inc. (7739) AI Stock Analysis

• Market Cap: ¥148.73B
• Dividend Yield: 1.92%
• Average Volume (3M): 69.57K
• Price to Earnings (P/E): 21.5
• Beta (1Y): 0.85
• Revenue Growth: 7.46%
• EPS Growth: -8.01%
• Country: JP
• Employees: 5,394
• Sector: Industrials
• Sector Strength: 72
• Industry: Computer Hardware
• EPS (TTM): 42.86
• Shares Outstanding: 42,206,540
• 10 Day Avg. Volume: 103,040
• 30 Day Avg. Volume: 69,570
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: ¥3,913.00 ▲(7.50% Upside)

Canon Electronics' strong financial performance is the primary driver of its overall stock score, supported by robust income growth and a solid balance sheet. However, technical analysis indicates potential overbought conditions, which could pose short-term risks. The valuation is reasonable, offering a balanced perspective on future returns.

Positive Factors

Balance Sheet Health

A low debt-to-equity ratio indicates minimal leverage, providing financial stability and reducing risk, which supports long-term growth.

Cash Flow Generation

Strong cash flow growth enhances financial flexibility, enabling investment in growth opportunities and providing a buffer against economic downturns.

Revenue Growth

Steady revenue growth reflects robust demand for products and effective market strategies, supporting long-term business expansion.

Negative Factors

EPS Decline

A decline in EPS suggests challenges in maintaining profitability, which could impact investor confidence and limit reinvestment capabilities.

Margin Fluctuations

Fluctuating margins can signal operational inefficiencies or market pressures, potentially affecting long-term profitability and strategic planning.

Technical Overbought Conditions

Overbought technical conditions may lead to a price correction, impacting investor sentiment and potentially affecting short-term capital raising efforts.

Canon Electronics Inc. Business Overview & Revenue Model

Company Description

Canon Electronics Inc. (7739) is a subsidiary of Canon Inc. that specializes in manufacturing advanced electronic components and systems. The company operates primarily in sectors including imaging and optical products, semiconductor equipment, and industrial solutions. Core products include imaging sensors, lens modules, and other precision electronic devices that serve various industries, including consumer electronics, automotive, and industrial automation.

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'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	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: Positive
• Last Price: 3640.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• 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 3640 is above the 20-day moving average (MA) of 3434.70, above the 50-day MA of 3000.54, and above the 200-day MA of 2634.65, indicating a bullish trend. The MACD of 215.67 indicates Positive momentum. The RSI at 86.91 is Negative, neither overbought nor oversold. The STOCH value of 50.00 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
6724	75 Outperform	$637.25B	12.83	6.07%	3.69%	0.48%	6.92%
7751	73 Outperform	¥4.59T	26.55	―	3.26%	4.02%	-41.52%
6750	72 Outperform	¥159.00B	13.18	12.77%	2.87%	4.48%	22.39%
6737	69 Neutral	¥91.54B	21.29	―	4.76%	1.81%	9.07%
7739	65 Neutral	¥148.73B	21.52	―	1.92%	7.46%	-8.01%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6588	55 Neutral	¥153.93B	-22.53	-6.22%	1.61%	-4.91%	-136.94%

Canon Electronics Inc. Corporate Events

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.

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.

Canon Electronics Reports Reviewed Financial Results for Nine Months Ending September 2025

Canon Electronics Inc. announced that their consolidated financial results for the nine months ending September 30, 2025, have been reviewed with no changes from the previous announcement. The results show a 6% increase in net sales compared to the previous year, although operating and ordinary profits have decreased by 13.8% and 10.7%, respectively. The financial position remains stable with a slight increase in total assets.

Canon Electronics Reports Mixed Financial Results for Nine Months Ending September 2025

Canon Electronics Inc. reported its consolidated financial results for the nine months ending September 30, 2025, showing a 6% increase in net sales compared to the previous year. However, the company experienced declines in operating profit, ordinary profit, and profit attributable to owners of the parent, with decreases of 13.8%, 10.7%, and 13.1% respectively. The company’s total assets and net assets saw slight increases, indicating stability in its financial position. Despite the challenges, Canon Electronics maintains a strong equity-to-asset ratio of 85.2%, reflecting its robust financial health.