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Trend Micro Incorporated (ADR) (TMICY)
OTHER OTC:TMICY
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Trend Micro
(OTC:TMICY)
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Rating:67Neutral
Price Target:
$45.00
▲(9.06% Upside)
The score is driven primarily by solid financial quality—strong margins and a debt-free balance sheet—tempered by sharp TTM revenue decline and weaker TTM free-cash-flow growth. Technically the stock is in a downtrend (below key moving averages with negative MACD), though oversold indicators provide some counterbalance, while valuation appears reasonable with a supportive dividend.
Positive Factors
Zero Debt Position
A zero-debt position enhances Trend Micro's financial stability, providing flexibility to invest in growth opportunities without the burden of interest payments.
AI and Cybersecurity Innovations
Innovations in AI and cybersecurity enhance Trend Micro's competitive edge, aligning with industry trends and potentially driving future growth.
Enterprise Business Growth
Strong growth in the enterprise segment highlights Trend Micro's effective market penetration and product adoption, supporting sustained revenue growth.
Negative Factors
Challenges in Consumer Business
Issues in the consumer segment could hinder revenue diversification and growth, as reliance on enterprise clients increases.
Decline in Free Cash Flow
A decline in free cash flow may limit Trend Micro's ability to reinvest in business expansion and innovation, affecting long-term growth prospects.
Impact of Unrecoverable Accounts Receivable
Issues with accounts receivable management can strain financial resources and impact profitability, posing risks to financial health.
Trend Micro (TMICY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.37B
Dividend Yield2.23%
Average Volume (3M)539.00
Price to Earnings (P/E)23.0
Beta (1Y)0.56
Revenue Growth2.73%
EPS Growth46.30%
CountryUS
Employees6,869
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.62
Shares Outstanding140,901,610
10 Day Avg. Volume0
30 Day Avg. Volume539
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)9.44
Price to Sales (P/S)4.13
P/FCF Ratio51.62
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue0.02
Enterprise Value/Gross Profit0.03
Enterprise Value/Ebitda0.07
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Trend Micro Business Overview & Revenue Model
Company DescriptionTrend Micro Incorporated develops and sells security-related software for computers and the Internet primarily in Japan. The company offers hybrid cloud security solutions, such conformity, workload, container, file storage, application, network, and open-source security products. It also provides intrusion prevention, threat protection, industrial and mobile network security products, as well as offers email, mobile, web, and industrial endpoint security products. In addition, the company offers cloud migration, cloud-native app development, cloud operational, data center security, and SaaS application solutions. Further, it provides ICS/OT, connected car, and 5G security solutions, as well as offers ransomware, end-of-support systems, compliance, detection, and response solutions. It serves oil and gas, healthcare, manufacturing, and electric utility industries. The company was incorporated in 1965 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyTrend Micro makes money primarily through the sale of its cybersecurity software and services. The company generates revenue from licensing its products, which are available for both individual consumers and enterprise clients. Enterprise solutions often involve subscription-based models, where customers pay regular fees for continued access to Trend Micro's security services and updates. Additionally, the company offers managed security services, which provide organizations with outsourced monitoring and management of their security systems. Key revenue streams include endpoint security, hybrid cloud security, and network defense. Trend Micro also engages in strategic partnerships with other technology companies and cloud service providers, which help expand its market reach and enhance its service offerings.
Trend Micro Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a mixed outlook with strong growth in AI initiatives and Japanese enterprise business, contrasted by challenges in currency impact, consumer revenue decline, and global macroeconomic uncertainties.Q2-2025 Updates
Positive Updates
AI Investments and Vision One Strategy
Trend Micro is heavily investing in AI, with a focus on the Vision One platform and AI security solutions. ARR grew to USD1.6 billion, and the NRR for V1 native and cyber services is over 140%. The company aims to convert all non-Vision One SaaS customers to the Vision One platform.
Japanese Enterprise Growth
The Japanese enterprise business experienced strong double-digit growth of 12% YoY, attributed to multiyear contracts and increased adoption of Trend Vision One.
Productivity and AI Integration
Trend Micro has integrated AI across its operations, improving productivity in product development and customer support. The company reports that AI-powered coding and customer support have increased efficiency significantly.
Vision One Platform Expansion
The Vision One platform saw a 94% YoY growth in large enterprise ARR. The company successfully landed new clients, replacing competitors like Microsoft, and expanded existing accounts with Vision One's capabilities.
Consumer Business Adaptation
Despite challenges, the consumer business showed growth in anti-scam solutions, with a 55% YoY increase in gross sales for beyond device protection.
Negative Updates
Currency Impact and Sales Slowdown
Currency fluctuations negatively impacted earnings, with net sales down 3% YoY and a 29% decrease in ordinary income due to FX losses. The enterprise segment saw elongated sales cycles and project delays.
Consumer Revenue Decline
The consumer revenue declined by 10% YoY, partly due to issues with PayPal transaction processing after switching the merchant of record.
Global Macroeconomic Uncertainty
The geopolitical conflicts and tariff wars have created significant uncertainty, affecting customer investment decisions and delaying new projects, particularly in the government sector.
Weakness in Non-Japanese Markets
While Japan performed well, other regions like Europe and the Americas showed weakness, with less growth in net sales and macroeconomic uncertainties affecting performance.
Company Guidance
In the Q2 2025 earnings call, Trend Micro reported a 3% decline in net sales and a 6% reduction in total operating expenses, resulting in a 9% increase in operating income. The company faced challenges from macroeconomic uncertainties, elongated sales cycles, and a stronger yen, which impacted ordinary income by a 29% loss. Despite these headwinds, the annual recurring revenue (ARR) grew to USD 1.6 billion, driven by a 94% year-over-year growth in large enterprise ARR. The Vision One platform saw significant traction, with a 94% YoY increase in ARR and over 11,000 enterprises adopting the platform, contributing to a 143% net revenue retention rate. The company also emphasized its AI initiatives, expecting USD 623 billion in AI spending by 2028, and highlighted its strategic partnerships, notably with NVIDIA and Dell. Trend Micro aims to transition its SaaS customers to the Vision One platform, focusing on increasing the quality of sales through AI-enhanced services. Despite the flat total headcount, the company continued hiring in AI-related technical roles to boost productivity. The forecast for H2 remains cautious but optimistic, with a focus on maintaining operating margins around 20% amidst ongoing macroeconomic challenges and currency fluctuations.Trend Micro Financial Statement Overview
Summary
Strong profitability (TTM gross margin ~76.6%, operating margin ~17.7%, net margin ~12.8%) and a conservative balance sheet with zero reported debt support quality. Offsetting this, TTM revenue is down ~24.9% and TTM free cash flow growth is negative (~-11.8%), creating near-term demand/growth uncertainty and some trend comparability risk (large TTM drop in reported equity/assets vs 2024).Income Statement
Profitability is strong for a software business, with TTM (Trailing-Twelve-Months) gross margin ~76.6%, operating margin ~17.7%, and net margin ~12.8%. However, growth has turned sharply negative in TTM (Trailing-Twelve-Months) with revenue down ~24.9% versus the prior period, and net income is below the 2020–2022 peak levels—suggesting either demand softness, mix shift, or tougher comps. Annual results show solid growth through 2024, but the TTM (Trailing-Twelve-Months) contraction is a clear near-term concern.72
Positive
Balance Sheet
The balance sheet appears conservatively financed with zero reported debt across periods, reducing refinancing and interest-rate risk. Returns on equity are healthy in recent periods (about ~28.8% in 2024 and ~30.2% in TTM (Trailing-Twelve-Months)), indicating strong profitability relative to the equity base. The main watch-out is a very large drop in reported equity and assets in TTM (Trailing-Twelve-Months) versus 2024, which could reflect reporting scope/currency/unit differences or a major balance sheet change; either way, it adds comparability risk when interpreting trends.78
Positive
Cash Flow
Cash generation is solid: TTM (Trailing-Twelve-Months) free cash flow is nearly one-for-one with net income (~0.98x), indicating earnings quality is good. That said, free cash flow growth is down in TTM (Trailing-Twelve-Months) (~-11.8%), and the cash conversion metrics shown are relatively low versus net income in both TTM (Trailing-Twelve-Months) and 2024, implying some working-capital or timing headwinds. Still, overall cash flow remains supportive given the strong absolute operating cash flow and high conversion of free cash flow to earnings in TTM (Trailing-Twelve-Months).74
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 273.93B | 272.64B | 248.69B | 223.79B | 190.36B | 174.06B |
| Gross Profit | 209.77B | 207.66B | 185.03B | 169.50B | 148.34B | 135.90B |
| EBITDA | 82.83B | 77.03B | 60.92B | 56.53B | 64.54B | 62.14B |
| Net Income | 35.10B | 34.36B | 10.73B | 29.84B | 38.37B | 26.90B |
Balance Sheet | ||||||
| Total Assets | 393.96B | 400.32B | 492.63B | 470.80B | 420.46B | 376.70B |
| Cash, Cash Equivalents and Short-Term Investments | 230.17B | 210.90B | 299.03B | 242.85B | 256.80B | 212.27B |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 264.50B | 280.87B | 278.21B | 242.12B | 199.03B | 187.34B |
| Stockholders Equity | 128.93B | 119.44B | 214.39B | 228.66B | 220.64B | 188.53B |
Cash Flow | ||||||
| Free Cash Flow | 63.92B | 21.84B | 30.87B | 35.92B | 36.48B | 42.47B |
| Operating Cash Flow | 64.96B | 46.78B | 57.23B | 56.90B | 55.27B | 54.31B |
| Investing Cash Flow | -9.77B | 5.04B | 31.00B | -67.72B | 2.58B | -5.78B |
| Financing Cash Flow | -20.11B | -130.90B | -43.43B | -30.44B | -16.45B | -21.14B |
Trend Micro Technical Analysis
Negative
41.26
Price Trends
45.90
Negative
49.51
Negative
58.39
Negative
Market Momentum
-1.26
Negative
32.22
Neutral
65.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TMICY, the sentiment is Negative. The current price of 41.26 is below the 20-day moving average (MA) of 42.10, below the 50-day MA of 45.90, and below the 200-day MA of 58.39, indicating a bearish trend. The MACD of -1.26 indicates Negative momentum. The RSI at 32.22 is Neutral, neither overbought nor oversold. The STOCH value of 65.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TMICY.
Trend Micro Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $22.43B | 21.77 | 29.35% | ― | 11.27% | 4.47% | |
71 Outperform | $56.06B | 31.04 | 228.04% | ― | 14.78% | 22.52% | |
67 Neutral | $5.37B | 23.04 | 29.20% | 2.23% | 2.73% | 46.30% | |
66 Neutral | $114.42B | -359.25 | -8.88% | ― | 22.05% | -341.24% | |
62 Neutral | $34.12B | -815.47 | -2.41% | ― | 23.24% | -8.83% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $22.90B | -98.47 | -12.73% | ― | 43.26% | -1651.82% |
* Technology Sector Average
TMICY
Trend Micro
40.92
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-26.71%
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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.