Tokyo Electron (TOELY) AI Stock Analysis

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Tokyo Electron

(OTC:TOELY)

Rating:68Neutral

Price Target:―

Tokyo Electron's strong financial health and robust balance sheet are significant strengths, supporting a solid overall score. The technical analysis presents mixed signals, with bearish trends and overbought conditions potentially limiting upside. Valuation appears reasonable with a decent dividend yield, but recent revenue and free cash flow declines pose challenges.

Tokyo Electron (TOELY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$72.48B

Dividend Yield1.48%

Average Volume (3M)4.57K

Price to Earnings (P/E)21.0

Beta (1Y)1.40

Revenue Growth26.33%

EPS Growth43.83%

CountryUS

Employees17,702

SectorTechnology

Sector Strength83

IndustrySemiconductors

Share Statistics

EPS (TTM)1.13

Shares Outstanding943,265,440

10 Day Avg. Volume0

30 Day Avg. Volume4,570

Financial Highlights & Ratios

PEG Ratio1.64

Price to Book (P/B)5.59

Price to Sales (P/S)0.00

P/FCF Ratio35.96

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$159.85

Price Target Upside95.92% Upside

Rating ConsensusHold

Number of Analyst Covering0

Tokyo Electron Business Overview & Revenue Model

Company DescriptionTokyo Electron Limited (TOELY) is a leading global company in the semiconductor production equipment (SPE) and flat panel display (FPD) industries. Headquartered in Tokyo, Japan, the company specializes in the development, manufacturing, and sale of cutting-edge equipment used in the production of semiconductors and electronic components. Its core products include etching systems, deposition systems, cleaning systems, and coater/developer systems, which are essential for fabricating integrated circuits and display panels.

How the Company Makes MoneyTokyo Electron generates revenue primarily through the sale of its semiconductor and flat panel display manufacturing equipment. Its key revenue streams include the sale of new equipment, maintenance services, and spare parts. The company also benefits from long-term partnerships and alliances with major semiconductor manufacturers and technology firms, which ensure a steady demand for its products. Tokyo Electron's earnings are further supported by its investment in research and development, enabling the company to continually innovate and maintain its competitive edge in advanced manufacturing technologies. Additionally, the company's global reach and strategic positioning in key markets contribute to its revenue growth and stability.

Tokyo Electron Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q4-2025)

% Change Since: 9.59%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Positive

The earnings call presented a strong financial performance for the fiscal year with record-high net sales and operating income driven by significant growth in DRAM and logic segments. Despite a decrease in Q4 metrics and challenges in the Chinese market, the company maintains a positive outlook with continued high investment in R&D and expects further growth. The financial achievements and optimistic forecasts outweigh the quarterly setbacks.

Q4-2025 Updates

Positive Updates

Record-High Financial Performance

Net sales reached ¥2,431.5 billion, a 32.8% increase year-over-year. Gross profit exceeded ¥1 trillion for the first time, with a gross profit margin of 47.1%. Operating income increased by 52.8% year-over-year to ¥697.3 billion.

Strong DRAM and Logic Segment Growth

Sales to DRAM customers increased by 59% year-over-year, driven by adoption of tools for HBM and significant market share increase in etch systems.

Successful Product Innovations

Introduced multiple new products like single-wafer plasma CVD and laser-lift-off system, contributing to semiconductor technology innovation.

Positive Future Outlook

Expecting record-high net sales of ¥2,600 billion in fiscal 2026, with continued R&D investment of ¥300 billion.

Negative Updates

Quarterly Decline in Key Metrics

In Q4, gross profit decreased by 0.4% and operating income fell by 7.9% from the previous quarter due to increased SG&A expenses.

Decrease in China Market Share

Sales to China declined by 8.4 percentage points from the previous quarter, due to shipment pulls and reduced capital investment by emerging customers.

Challenges in Profit Margin

Operating profit margin decreased by 3.8 percentage points year-over-year, despite a record high gross profit margin.

Company Guidance

During the financial announcement call for the fiscal year ended March 2025, Tokyo Electron reported record-breaking results, surpassing previous guidance in several key metrics. Net sales reached ¥2,431.5 billion, a 32.8% increase year-over-year, driven by robust customer spending on both advanced and mature nodes. Gross profit exceeded ¥1 trillion for the first time, reaching ¥1,146.2 billion, with a gross profit margin of 47.1%. Operating income rose by 52.8% year-over-year to ¥697.3 billion, while net income hit ¥544.1 billion, marking a 49.5% increase. Despite a dip in operating profit margin to 28.7% due to sustained R&D investments, the company maintained strong growth in key areas such as DRAM sales, which surged by 59% year-over-year. The balance sheet highlighted total assets of ¥2,625.9 billion, with a significant free cash inflow of ¥225.8 billion, reaching an all-time high on both a quarterly and fiscal year basis. Looking ahead, Tokyo Electron anticipates continued growth, forecasting a 6.9% increase in net sales for fiscal 2026 and planning substantial R&D and capital expenditure investments to support further expansion.

Tokyo Electron Financial Statement Overview

Summary

Tokyo Electron demonstrates strong financial health with high profitability margins and solid cash flow management. The company benefits from a robust equity position, low leverage, and effective cost control. However, the recent decline in revenue and free cash flow growth could pose challenges if trends continue.

Income Statement

Positive

Tokyo Electron shows strong profitability with a healthy gross profit margin of approximately 45.36% in 2024. However, revenue growth has been negative, with a decline of about 17.14% from 2023 to 2024. Despite this, the company maintains a robust net profit margin of 19.88%, indicating efficient cost management. The EBIT margin remains solid at 24.92%, albeit slightly lower than the previous year due to reduced revenue, reflecting strong operational efficiency.

Balance Sheet

Positive

The balance sheet of Tokyo Electron is strong with a low debt-to-equity ratio of 0.0076, indicating minimal leverage. The company has a high equity ratio of 71.68%, showing strong solvency and asset financing through equity. Return on equity is impressive at 20.68%, suggesting effective use of shareholder funds to generate profits. The company's financial position is stable with solid equity backing and low financial risk.

Cash Flow

Positive

Tokyo Electron's cash flow is positive, with operating cash flow exceeding net income, resulting in a healthy operating cash flow to net income ratio of 1.19. However, there's a decline in free cash flow by around 11.49% from 2023 to 2024, which could impact future investments. Despite this, the company maintains a commendable free cash flow to net income ratio of 0.85, suggesting effective cash management.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
1.99T	1.83T	2.21T	2.00T	1.40T	1.13T
	Gross Profit
931.98B	830.27B	984.41B	911.82B	564.95B	451.94B
	EBIT
539.56B	456.26B	617.72B	599.27B	320.69B	237.29B
	EBITDA
591.25B	508.68B	660.82B	636.20B	354.73B	266.60B
	Net Income Common Stockholders
425.84B	363.96B	471.58B	437.08B	242.94B	185.21B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
472.55B	472.55B	473.10B	371.27B	311.55B	338.41B
	Total Assets
2.46T	2.46T	2.31T	1.89T	1.43T	1.28T
	Total Debt
13.32B	13.32B	13.22B	4.36B	3.81B	3.37B
	Net Debt
-448.29B	-462.38B	-459.25B	-331.29B	-262.19B	-244.59B
	Total Liabilities
696.28B	696.28B	712.07B	547.41B	400.80B	448.80B
	Stockholders Equity
1.76T	1.76T	1.60T	1.35T	1.02T	829.69B
Cash Flow		Free Cash Flow
330.02B	309.74B	349.96B	218.28B	84.96B	200.37B
	Operating Cash Flow
397.72B	434.72B	426.27B	283.39B	145.89B	253.12B
	Investing Cash Flow
-91.09B	-125.15B	-41.76B	-55.63B	-18.27B	15.95B
	Financing Cash Flow
-285.91B	-325.01B	-256.53B	-167.26B	-114.53B	-250.37B

Tokyo Electron Technical Analysis

Technical Analysis Sentiment

Positive

Last Price81.59

Price Trends

50DMA

74.09

Positive

100DMA

76.98

Positive

200DMA

78.76

Positive

Market Momentum

MACD

1.48

Positive

RSI

58.65

Neutral

STOCH

45.78

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TOELY, the sentiment is Positive. The current price of 81.59 is above the 20-day moving average (MA) of 80.21, above the 50-day MA of 74.09, and above the 200-day MA of 78.76, indicating a bullish trend. The MACD of 1.48 indicates Positive momentum. The RSI at 58.65 is Neutral, neither overbought nor oversold. The STOCH value of 45.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TOELY.

Tokyo Electron Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMD	81 Outperform	$190.21B	86.92	3.90%	―	21.71%	99.00%
AMAT	81 Outperform	$129.95B	19.98	36.37%	1.01%	6.12%	-5.66%
LRCX	79 Outperform	$108.43B	23.65	53.14%	1.05%	20.33%	31.89%
KLAC	74 Outperform	$102.59B	28.19	104.10%	0.85%	20.44%	44.14%
TOELY	68 Neutral	$72.48B	20.98	29.69%	1.48%	26.33%	43.83%
Sector *	62 Neutral	$11.72B	10.43	-7.10%	2.91%	7.41%	-7.94%
INTC	45 Neutral	$88.50B	―	-18.66%	2.50%	-3.97%	-562.40%

* Technology Sector Average

Performance Comparison

TOELY

Tokyo Electron

81.59

-29.24

-26.38%

AMD

Advanced Micro Devices

116.19

-44.15

-27.54%

AMAT

Applied Materials

166.74

-59.28

-26.23%

INTC

Intel

20.06

-10.66

-34.70%

KLAC

KLA

808.00

20.94

2.66%

LRCX

Lam Research

86.35

-12.86

-12.96%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.