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Tokyo Electron Ltd (TOELY)
OTHER OTC:TOELY
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Tokyo Electron
(OTC:TOELY)
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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
$90.37B
Dividend Yield1.93%
Average Volume (3M)9.78K
Price to Earnings (P/E)25.6
Beta (1Y)1.56
Revenue Growth21.38%
EPS Growth26.62%
CountryUS
Employees17,702
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)1.07
Shares Outstanding943,265,440
10 Day Avg. Volume14,667
30 Day Avg. Volume9,780
Financial Highlights & Ratios
PEG Ratio0.34
Price to Book (P/B)5.09
Price to Sales (P/S)3.89
P/FCF Ratio22.81
Enterprise Value/Market Cap0.65
Enterprise Value/Revenue0.02
Enterprise Value/Gross Profit0.05
Enterprise Value/Ebitda0.08
Forecast
1Y Price Target
$159.85Price Target Upside64.73% Upside
Rating ConsensusHold
Number of Analyst Covering0
Tokyo Electron Business Overview & Revenue Model
Company DescriptionTokyo 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 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: |
Next Earnings Date:Feb 05, 2026
Earnings Call Sentiment Positive
The earnings call highlighted significant financial achievements, with record-breaking revenue and growth in key segments like DRAM and HBM. However, challenges such as quarterly declines in profit margins, decreased sales in China, and potential impacts from new tariffs were noted. Despite these lowlights, the positive outlook for fiscal 2026 suggests continued growth.Q4-2025 Updates
Positive Updates
Record-Breaking Financial Performance
Net sales reached ¥2,431.5 billion, a 32.8% increase year-over-year. Operating income was ¥697.3 billion, a 52.8% increase, and net income was ¥544.1 billion, a 49.5% increase year-over-year. Gross profit exceeded ¥1 trillion for the first time with a margin of 47.1%.
Strong DRAM and HBM Growth
Sales to DRAM customers increased by 59% year-over-year, driven by demand for advanced technologies such as HBM. The company also increased its market share in DRAM.
Expansion in Etch Systems Market
The company increased its market share in etch systems by 6 percentage points year-over-year, driven by winning 100% mass-production PORs for critical processes.
Successful Share Repurchase
Conducted a share repurchase of about ¥150 billion in total, benefiting shareholders.
Positive Outlook for Fiscal 2026
Net sales for fiscal 2026 are expected to increase by 6.9% to ¥2,600 billion, with record high net sales and operating income anticipated.
Negative Updates
Quarterly Decline in Key Metrics
In the fourth quarter, gross profit declined by 0.4% and net income decreased by 9.1% from the previous quarter, with operating profit margin dropping by 2.5 percentage points.
Decreased Sales in China
Sales to China declined by 8.4 percentage points from the previous quarter to 34.3%, due to shipment timing and reduced capital investment by emerging customers.
Challenges in Profit Margins
Operating profit margin decreased by 3.8 percentage points year-over-year, impacted by increased R&D expenses and SG&A costs.
Potential Impact of Tariffs
Concerns about the impact of newly announced tariffs by the U.S. government on customer investment attitudes, particularly in China.
Company Guidance
During the call, Tokyo Electron provided comprehensive guidance for the fiscal year ended March 2025, outlining significant financial achievements and future expectations. The company reported net sales of ¥2,431.5 billion, a 32.8% increase year-over-year, with gross profit surpassing ¥1 trillion for the first time at ¥1,146.2 billion, resulting in a gross profit margin of 47.1%. Operating income reached ¥697.3 billion, reflecting a 52.8% increase, while net income attributable to owners was ¥544.1 billion, up by 49.5%. The return on equity (ROE) was 30.3%. Tokyo Electron also highlighted their robust R&D and capital expenditures, with R&D expenses totaling ¥250.0 billion, a 23.2% increase, and capital expenditures amounting to ¥162.1 billion. Looking ahead, the company anticipates net sales of ¥2,600 billion for fiscal 2026, representing a 6.9% growth, with plans to invest ¥300 billion in R&D. The guidance also touched on the company's strategic focus areas, including advanced logic for AI servers, HBM, and emerging technologies such as cryogenic etching and wafer bonding, aiming to capitalize on the expected growth in the WFE market driven by AI-related investments.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
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.75
Positive
Balance Sheet
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.80
Positive
Cash Flow
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.70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.43T | 2.43T | 1.83T | 2.21T | 2.00T | 1.40T |
| Gross Profit | 1.14T | 1.15T | 830.27B | 984.41B | 911.82B | 564.95B |
| EBITDA | 742.60B | 759.59B | 508.68B | 660.82B | 636.20B | 354.73B |
| Net Income | 535.75B | 544.13B | 363.96B | 471.58B | 437.08B | 242.94B |
Balance Sheet | ||||||
| Total Assets | 2.51T | 2.63T | 2.46T | 2.31T | 1.89T | 1.43T |
| Cash, Cash Equivalents and Short-Term Investments | 367.51B | 496.24B | 472.55B | 473.10B | 371.27B | 311.55B |
| Total Debt | 0.00 | 0.00 | 13.32B | 13.22B | 4.36B | 3.81B |
| Total Liabilities | 636.58B | 770.77B | 696.28B | 712.07B | 547.41B | 400.80B |
| Stockholders Equity | 1.87T | 1.86T | 1.76T | 1.60T | 1.35T | 1.02T |
Cash Flow | ||||||
| Free Cash Flow | 291.28B | 414.13B | 309.74B | 349.96B | 218.28B | 84.96B |
| Operating Cash Flow | 473.35B | 582.17B | 434.72B | 426.27B | 283.39B | 145.89B |
| Investing Cash Flow | -186.46B | -169.61B | -125.15B | -41.76B | -55.63B | -18.27B |
| Financing Cash Flow | -345.54B | -388.84B | -325.01B | -256.53B | -167.26B | -114.53B |
Tokyo Electron Technical Analysis
Positive
97.04
Price Trends
78.93
Positive
83.13
Positive
79.98
Positive
Market Momentum
5.57
Negative
66.62
Neutral
68.48
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 97.04 is above the 20-day moving average (MA) of 89.59, above the 50-day MA of 78.93, and above the 200-day MA of 79.98, indicating a bullish trend. The MACD of 5.57 indicates Negative momentum. The RSI at 66.62 is Neutral, neither overbought nor oversold. The STOCH value of 68.48 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $176.99B | 33.79 | 58.24% | 0.67% | 23.68% | 43.16% | |
81 Outperform | $376.37B | 37.82 | 56.14% | 0.69% | 27.09% | 40.94% | |
80 Outperform | $208.43B | 24.46 | 17.20% | 0.24% | 48.85% | 997.29% | |
76 Outperform | $168.54B | 25.22 | 35.64% | 0.78% | 6.70% | -5.95% | |
72 Outperform | $343.25B | 135.59 | 4.70% | ― | 27.17% | 108.67% | |
68 Neutral | $90.37B | 25.58 | 29.80% | 1.93% | 21.38% | 26.62% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
TOELY
Tokyo Electron
97.04
11.22
13.07%
AMD
Advanced Micro Devices
232.89
65.00
38.72%
AMAT
Applied Materials
220.30
17.35
8.55%
ASML
ASML Holding
980.54
147.01
17.64%
LRCX
Lam Research
141.00
58.98
71.91%
MU
Micron
192.33
85.85
80.63%
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.