Sumco (SUOPY) AI Stock Analysis

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Sumco

(OTC:SUOPY)

Rating:67Neutral

Price Target:

$17.50

▲(1.27%Upside)

Sumco's overall stock score reflects a balanced view of its financial stability and technical strength, offset by valuation concerns and cautious earnings guidance. The company's strong upward technical trends contribute positively, while financial performance challenges and a cautious earnings outlook weigh on the score.

Sumco (SUOPY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.01B

Dividend Yield0.09%

Average Volume (3M)12.00

Price to Earnings (P/E)25.9

Beta (1Y)1.25

Revenue Growth-6.29%

EPS Growth-46.62%

CountryUS

Employees9,850

SectorTechnology

Sector Strength90

IndustrySemiconductors

Share Statistics

EPS (TTM)0.11

Shares Outstanding175,083,620

10 Day Avg. Volume0

30 Day Avg. Volume12

Financial Highlights & Ratios

PEG Ratio-2.30

Price to Book (P/B)0.71

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$16.50

Price Target Upside-4.51% Downside

Rating ConsensusHold

Number of Analyst Covering0

Sumco Business Overview & Revenue Model

Company DescriptionSumco Corporation, together with its subsidiaries, manufactures and sells silicon wafers for the semiconductor industry primarily in Japan, the United States, China, Taiwan, Korea, and internationally. It provides monocrystalline ingots, as well as polished, annealed, epitaxial, junction isolated, silicon-on-insulator, and reclaimed polished wafers. The company was formerly known as Sumitomo Mitsubishi Silicon Corp. and changed its name to Sumco Corporation in August 2005. Sumco Corporation was incorporated in 1999 and is headquartered in Tokyo, Japan.

How the Company Makes MoneySumco Corporation makes money by manufacturing and selling silicon wafers to semiconductor companies and electronics manufacturers. Its revenue model is primarily based on the sale of these wafers, which are available in various sizes and specifications to meet the diverse needs of its clients. The company benefits from long-term contracts with major semiconductor manufacturers, ensuring a stable revenue stream. Additionally, Sumco's focus on research and development helps it to innovate and produce advanced wafer technologies, which can command higher prices and margins. Global demand for semiconductors, driven by trends such as the Internet of Things (IoT), artificial intelligence, and the electrification of vehicles, further contributes to Sumco's earnings.

Sumco Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 27.25%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Negative

The earnings call highlights stable sales performance and interim dividend guidance, but significant lowlights include projected declines in profitability, increased depreciation expenses, and challenges from Forex and tariffs. The company's outlook is cautious due to these negative factors.

Q1-2025 Updates

Positive Updates

Q1 Operating Profit Exceeds Forecast

The company exceeded its forecast for operating profit and ordinary profit in Q1 fiscal 2025 due to delays in incurring depreciation.

Stable Sales Performance

Q1 sales were largely in line with forecasts, indicating stability in the company's revenue streams.

Positive Forex Impact in Q1

A positive impact of ¥1.6 billion from Forex contributed to operating profit, despite other cost increases.

Guidance for Interim Dividend

Guiding for an interim dividend of ¥10, taking into account EBITDA and available cash.

Negative Updates

Projected Decline in Profitability

For Q2 2025, the company projects breakeven at the operating profit level, a loss of ¥1 billion for ordinary profit, and a loss of ¥2 billion in net profit.

Increased Depreciation Expenses

Projected increase in depreciation expenses of ¥4.3 billion Q-on-Q, impacting profitability negatively.

Forex and Cost Challenges

A negative Q-on-Q impact of ¥2.7 billion from Forex is expected, along with an increase in costs related to materials and labor.

Weakness in 200 mm and 300 mm Wafer Demand

Ongoing weakness in 200 mm wafers, with 300 mm also seeing a Q-on-Q decline in Q1. AI is the only strong driver for 300 mm wafers.

High Inventory Levels

Customer wafer inventory levels have been rising again, especially for NAND memory and legacy logic applications.

Tariff Uncertainty

Uncertainty around the impact of U.S. tariffs on silicon wafers, with potential secondary economic impacts.

Company Guidance

During the Q1 fiscal 2025 results briefing, significant guidance was provided regarding the company's financial outlook and market conditions. Chairman Hashimoto highlighted that while Q1 sales were in line with forecasts, operating and ordinary profits exceeded expectations due to delayed depreciation expenses. Looking ahead to Q2, the company projects flat sales quarter-on-quarter (Q-on-Q) but anticipates a breakeven at the operating profit level, with an ordinary profit loss of ¥1 billion and a net profit loss of ¥2 billion. Key factors impacting profitability include a projected ¥4.3 billion Q-on-Q depreciation increase and a ¥2.7 billion negative impact from a stronger Yen, totaling a ¥7 billion negative effect. Despite an unchanged sales forecast, the company expects a decline in profitability due to these factors, partly mitigated by a shift towards 300 mm wafer shipments. Additionally, the interim dividend guidance was set at ¥10, and ongoing challenges from macroeconomic conditions, inventory adjustments, and potential impacts from U.S. tariffs were discussed. The company plans to focus on cost management, improving its production capabilities, and adapting to market shifts, particularly the transition to 300 mm wafers driven by AI demand.

Sumco Financial Statement Overview

Summary

Sumco presents a mixed financial outlook, with strengths in maintaining a strong equity base and moderate leverage, but faces challenges with declining profitability and negative free cash flow. The company needs to address revenue growth and operational efficiency to enhance financial health and shareholder returns.

Income Statement

Positive

Sumco's income statement reflects a mixed performance. The gross profit margin improved from 25.4% in 2020 to 27.5% in 2023, indicating better cost management. However, net profit margin declined significantly from 15% in 2022 to 4.7% in 2023, raising concerns about rising expenses or one-time charges. Revenue growth rate was negative over the past two years, with a notable decline of 6.9% in 2023, suggesting a potential challenge in market demand or competitive pressures. EBIT and EBITDA margins have decreased, reflecting reduced operational efficiency.

Balance Sheet

Positive

The balance sheet shows a stable financial position with a debt-to-equity ratio of 0.60 in 2023, indicating moderate leverage. The equity ratio improved from 53.4% in 2020 to 53.4% in 2023, signaling sound capital structure. However, the return on equity decreased from 13.2% in 2022 to 3.4% in 2023, which may indicate decreased profitability for shareholders. The company maintains a strong equity base, which provides a cushion against potential risks.

Cash Flow

Neutral

Cash flow analysis reveals a concerning trend with free cash flow turning negative at -177.6 billion in 2023, down from -160.6 billion in 2022, due to high capital expenditures. The operating cash flow to net income ratio decreased, indicating potential challenges in converting income to cash. While operating cash flow remains positive, the free cash flow to net income ratio is negative, suggesting that the company needs to improve its cash management.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	396.62B	425.94B	441.08B	335.67B	291.33B
Gross Profit	72.73B	108.25B	143.35B	80.12B	65.17B
EBITDA	113.25B	144.66B	169.53B	104.33B	84.67B
Net Income	19.88B	63.88B	70.20B	41.12B	25.50B
Balance Sheet
Total Assets	1.17T	1.07T	892.55B	764.82B	593.44B
Cash, Cash Equivalents and Short-Term Investments	95.67B	156.35B	259.31B	224.67B	82.97B
Total Debt	353.95B	224.45B	141.38B	141.07B	149.90B
Total Liabilities	515.45B	437.56B	301.07B	241.98B	238.44B
Stockholders Equity	592.11B	572.15B	533.55B	476.15B	315.11B
Cash Flow
Free Cash Flow	-177.62B	-160.57B	54.01B	36.92B	30.45B
Operating Cash Flow	69.63B	96.34B	179.46B	104.71B	84.19B
Investing Cash Flow	-247.88B	-247.68B	-126.35B	-67.34B	-55.19B
Financing Cash Flow	112.29B	43.46B	-23.15B	99.10B	-16.24B

Sumco Technical Analysis

Technical Analysis Sentiment

Positive

Last Price17.28

Price Trends

50DMA

14.73

Positive

100DMA

14.36

Positive

200DMA

15.48

Positive

Market Momentum

MACD

0.61

Negative

RSI

58.47

Neutral

STOCH

88.62

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SUOPY, the sentiment is Positive. The current price of 17.28 is above the 20-day moving average (MA) of 16.04, above the 50-day MA of 14.73, and above the 200-day MA of 15.48, indicating a bullish trend. The MACD of 0.61 indicates Negative momentum. The RSI at 58.47 is Neutral, neither overbought nor oversold. The STOCH value of 88.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SUOPY.

Sumco Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TSEM	76 Outperform	$5.26B	26.08	7.88%	―	5.22%	-58.99%
CAMT	75 Outperform	$4.30B	35.20	24.82%	1.41%	32.63%	46.16%
HIMX	74 Outperform	$1.67B	19.48	9.79%	3.87%	0.61%	80.97%
SUOPY	67 Neutral	$3.01B	25.87	3.01%	0.09%	-6.29%	-46.62%
SLAB	64 Neutral	$4.42B	―	-14.77%	―	2.16%	-55.38%
Sector *	63 Neutral	$34.70B	5.15	-11.38%	1.67%	5.54%	-17.15%
SMTC	60 Neutral	$4.55B	―	-93.41%	―	13.83%	88.14%

* Technology Sector Average

Performance Comparison

SUOPY

Sumco

17.28

-13.22

-43.34%

CAMT

Camtek

95.81

-5.16

-5.11%

HIMX

Himax Technologies

9.54

2.70

39.47%

SMTC

Semtech

53.07

22.08

71.25%

SLAB

Silicon Laboratories

134.50

14.18

11.79%

TSEM

Tower

47.02

4.14

9.65%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 10, 2025