Tokyo Electron (8035) AI Stock Analysis

• Market Cap: ¥9.37T
• Dividend Yield: 2.68%
• Average Volume (3M): 4.27M
• Price to Earnings (P/E): 17.4
• Beta (1Y): 1.57
• Revenue Growth: 21.68%
• EPS Growth: 26.74%
• Country: JP
• Employees: 17,702
• Sector: Technology
• Sector Strength: 84
• Industry: Semiconductors
• EPS (TTM): 653.73
• Shares Outstanding: 471,632,720
• 10 Day Avg. Volume: 3,186,600
• 30 Day Avg. Volume: 4,266,113
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥31,370.87
• Price Target Upside: 54.99% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 81 Outperform
• Price Target: ―

Tokyo Electron's overall score of 81 reflects its robust financial performance, including strong profitability and efficient operations. The earnings call supports this with positive growth prospects, though challenges such as cash flow issues and market risks in China are noted. Technical analysis provides mixed signals, with valuation appearing fair. Overall, the company is well-positioned for growth despite some risks.

Positive Factors

Earnings

3Q25 results beat expectations with a strong surge in both net sales and earnings.

Market Position

TEL is a leading semiconductor equipment maker with a dominant position in the industry.

Negative Factors

Geopolitical Concerns

High exposure to China, with about 44% of FY24 total revenue derived from China, could be subject to US-China geopolitical tensions.

Tokyo Electron Business Overview & Revenue Model

Company Description

Tokyo Electron Limited, together with its subsidiaries, develops, manufactures, and sells semiconductor and flat panel display (FPD) production equipment in Japan, Europe, North America, Taiwan, China, South Korea, and internationally. The company's Semiconductor Production Equipment segment offers coaters/developers, etch systems, deposition systems, and cleaning systems used in wafer processing; wafer probers used in wafer testing process; and wafer bonders/debonders. Its Flat Panel Display Production Equipment segment provides coaters/developers and etch/ash systems for use in the manufacture of FPDs, as well as inkjet printing systems for manufacturing OLED panels. The company also offers logistic, facility maintenance, and insurance services. Tokyo Electron Limited was incorporated in 1951 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Tokyo Electron makes money primarily through the sale of its advanced semiconductor production equipment and flat panel display production equipment. The company's revenue model is centered around the design, manufacturing, and servicing of these high-tech machines, which are essential for the production of semiconductors and electronic displays. Key revenue streams include equipment sales, after-sales services such as maintenance and upgrades, and technical support. Tokyo Electron's earnings are significantly influenced by its partnerships with leading semiconductor manufacturers and display makers, as it provides them with cutting-edge technology to improve production efficiency and output quality. The company's financial performance is also closely tied to global semiconductor demand, technological advancements, and the capital expenditure cycles of its major clients.

Tokyo Electron Financial Statement Overview

Summary

Tokyo Electron demonstrates robust financial health with strong profitability and efficient operations. The company boasts a high TTM net profit margin of 22.6% and a solid gross profit margin of 47.0%. Its balance sheet is healthy with a 71.9% equity ratio and no debt, minimizing financial risk. Operating cash flow comfortably covers net income, indicating healthy cash generation.

Income Statement

Tokyo Electron exhibits strong financial performance with an impressive TTM (Trailing-Twelve-Months) net profit margin of 22.6% and a solid gross profit margin of 47.0%. The company has maintained consistent revenue growth over the years, highlighted by a substantial increase from the previous fiscal year. EBIT and EBITDA margins are robust at 28.3% and 30.8%, respectively, indicating sound profitability and operational efficiency.

Balance Sheet

The company maintains a healthy balance sheet with a high equity ratio of 71.9%, showcasing strong capital structure and financial stability. With no total debt, the debt-to-equity ratio is effectively zero, minimizing financial risk. Return on equity stands at a remarkable 29.3%, reflecting efficient use of shareholders' equity to generate profits.

Cash Flow

Operating cash flow is strong, covering net income comfortably, with an operating cash flow to net income ratio of 0.87. Free cash flow is positive and growing, with a year-over-year increase of approximately 5.7% in the latest TTM. The company's ability to generate free cash flow indicates healthy cash generation, supporting future investments and shareholder returns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.43T	2.43T	1.83T	2.21T	2.00T	1.40T
Gross Profit	1.15T	1.15T	830.27B	984.41B	911.82B	564.95B
EBITDA	751.69B	768.38B	508.68B	660.82B	636.20B	354.73B
Net Income	544.13B	544.13B	363.96B	471.58B	437.08B	242.94B
Balance Sheet
Total Assets	2.63T	2.63T	2.46T	2.31T	1.89T	1.43T
Cash, Cash Equivalents and Short-Term Investments	496.24B	496.24B	472.55B	473.10B	371.27B	311.55B
Total Debt	0.00	0.00	0.00	13.22B	4.36B	3.81B
Total Liabilities	770.77B	770.77B	696.28B	712.07B	547.41B	400.80B
Stockholders Equity	1.86T	1.86T	1.76T	1.60T	1.35T	1.02T
Cash Flow
Free Cash Flow	292.97B	423.80B	309.74B	349.96B	218.28B	84.96B
Operating Cash Flow	582.17B	582.17B	434.72B	426.27B	283.39B	145.89B
Investing Cash Flow	-169.61B	-169.61B	-125.15B	-41.76B	-55.63B	-18.27B
Financing Cash Flow	-388.84B	-388.84B	-325.01B	-256.53B	-167.26B	-114.53B

Tokyo Electron Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 20240.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8035, the sentiment is Negative. The current price of 20240 is below the 20-day moving average (MA) of 20703.75, below the 50-day MA of 24130.50, and below the 200-day MA of 23323.94, indicating a bearish trend. The MACD of -1037.03 indicates Negative momentum. The RSI at 33.41 is Neutral, neither overbought nor oversold. The STOCH value of 24.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:8035.

Tokyo Electron Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8035	81 Outperform	¥9.37T	17.35	29.80%	2.68%	21.68%	26.74%
Sector *	61 Neutral	$35.55B	8.88	-11.05%	1.87%	8.55%	-8.14%
ADTTF	―	$57.29B	37.16	44.94%	0.33%	―	―
DINRF	―	$6.73B	11.32	24.92%	2.74%	―	―
DISPF	―	$28.07B	33.94	28.07%	1.07%	―	―
LSRCF	―	$9.57B	16.86	47.47%	2.09%	―	―
RNECF	―	$20.04B	20.80	-4.72%	1.51%	―	―

Tokyo Electron Corporate Events

Tokyo Electron Reports Strong Financial Growth for Fiscal Year 2025

Tokyo Electron reported significant financial growth for the year ended March 31, 2025, with net sales increasing by 32.8% and operating income rising by 52.8% compared to the previous fiscal year. This robust performance reflects the company’s strong market positioning and operational efficiency, despite a slight decline in comprehensive income. The financial results indicate a positive outlook for stakeholders, with increased dividends and a stable financial position.

Tokyo Electron Announces Board Changes Ahead of Shareholders Meeting

Tokyo Electron Limited has announced changes to its Board of Directors and Audit & Supervisory Board, with new appointments and retirements set to be finalized at the upcoming Annual General Meeting of Shareholders. These changes are expected to bring fresh perspectives and strengthen the company’s governance, potentially impacting its strategic direction and stakeholder relations.

Tokyo Electron Reports Strong Financial Growth in Q3 2024

Tokyo Electron Limited reported its consolidated financial results for the nine months ending December 31, 2024, showing significant growth in net sales and income compared to the previous fiscal year. The company achieved a 22.3% increase in net sales and a substantial rise in operating and ordinary income, indicating strong operational performance. The financial forecast for the year ending March 31, 2025, projects continued growth with expectations of a 31.1% increase in net sales and an improvement in net income attributable to owners, reflecting Tokyo Electron’s strong market positioning and effective strategic initiatives.