Tokyo Electron (TOELY) AI Stock Analysis

• Market Cap: $122.07B
• Dividend Yield: 1.78%
• Average Volume (3M): 12.36K
• Price to Earnings (P/E): 33.7
• Beta (1Y): 1.50
• Revenue Growth: 17.58%
• EPS Growth: 16.78%
• Country: US
• Employees: 17,702
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): N/A
• Shares Outstanding: 943,265,440
• 10 Day Avg. Volume: 7,736
• 30 Day Avg. Volume: 12,359
• PEG Ratio: 0.34
• Price to Book (P/B): 5.09
• Price to Sales (P/S): 3.89
• P/FCF Ratio: 22.81
• Enterprise Value/Market Cap: 96.17
• Enterprise Value/Revenue: 4.72
• Enterprise Value/Gross Profit: 10.11
• Enterprise Value/Ebitda: 15.44
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 82 Outperform
• Price Target: $155.00 ▲(15.85% Upside)

Score is driven primarily by very strong financial performance (high margins, strong ROE, negligible debt, and solid/free cash flow). Technicals are supportive with an uptrend and positive momentum, though near-term indicators look somewhat stretched. Valuation is a modest headwind given the ~27.8 P/E, with the dividend providing limited offset.

Positive Factors

Balance Sheet Strength

Tokyo Electron's near-zero debt and steadily expanding equity offer durable financial flexibility across semiconductor cycles. Low leverage reduces refinancing and interest risk, enabling consistent investment in R&D, capex, service footprint and shareholder returns during downturns.

High Profitability Margins

Sustained, industry-leading gross and operating margins indicate product differentiation and pricing power in wafer- and display-equipment. High margins support reinvestment in advanced tools and service capabilities, improving resilience and return generation across multi-year technology cycles.

Robust Free Cash Flow

Consistent positive free cash flow provides durable funding for capex, spare-parts infrastructure, R&D and shareholder distributions. Strong FCF cushions cyclicality of new-equipment sales and supports long-term strategic investments in tooling and service networks.

Negative Factors

Cyclical Revenue Exposure

New-equipment sales are tightly tied to semiconductor capex and technology transitions, so revenue and orders can swing materially across cycles. That structural cyclicality creates volatile top-line and capacity planning risk, affecting hiring, factory utilization and multi-quarter profitability.

Cash Conversion Volatility

Variable conversion of accounting earnings into operating cash undermines predictability of internal funding. When cash conversion dips, the company may face tighter short-term funding for parts inventory, service operations and capex, increasing reliance on timing of receipts or discretionary spend cuts.

Regulatory / Geopolitical Risk

Allegations and scrutiny over sales to Chinese state or military-linked entities pose structural risk: potential export controls, sanctions, or tightened customer access could reduce addressable markets and complicate service/support in China, materially affecting long-term equipment demand and growth prospects.

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 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 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.

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.

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.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.49T	2.43T	1.83T	2.21T	2.00T	1.40T
Gross Profit	1.16T	1.15T	830.27B	984.41B	911.82B	564.95B
EBITDA	760.09B	759.59B	508.68B	660.82B	636.20B	354.73B
Net Income	541.86B	544.13B	363.96B	471.58B	437.08B	242.94B
Balance Sheet
Total Assets	2.67T	2.63T	2.46T	2.31T	1.89T	1.43T
Cash, Cash Equivalents and Short-Term Investments	455.24B	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	662.38B	770.77B	696.28B	712.07B	547.41B	400.80B
Stockholders Equity	2.00T	1.86T	1.76T	1.60T	1.35T	1.02T
Cash Flow
Free Cash Flow	284.78B	414.13B	309.74B	349.96B	218.28B	84.96B
Operating Cash Flow	500.59B	582.17B	434.72B	426.27B	283.39B	145.89B
Investing Cash Flow	-218.78B	-169.61B	-125.15B	-41.76B	-55.63B	-18.27B
Financing Cash Flow	-345.89B	-388.84B	-325.01B	-256.53B	-167.26B	-114.53B

Tokyo Electron Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 133.79
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 133.79 is above the 20-day moving average (MA) of 115.45, above the 50-day MA of 108.62, and above the 200-day MA of 89.42, indicating a bullish trend. The MACD of 7.29 indicates Negative momentum. The RSI at 75.94 is Negative, neither overbought nor oversold. The STOCH value of 98.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TOELY.

Tokyo Electron Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOELY	82 Outperform	$122.07B	33.75	29.80%	1.78%	17.58%	16.78%
ASML	81 Outperform	$517.47B	50.83	51.72%	0.63%	24.91%	39.95%
AMAT	77 Outperform	$259.30B	37.76	35.51%	0.69%	4.47%	0.48%
MU	77 Outperform	$408.28B	34.48	22.55%	0.20%	45.43%	203.31%
AMD	73 Outperform	$371.06B	114.57	5.32%	―	31.83%	80.45%
LRCX	71 Outperform	$280.04B	49.13	62.26%	0.56%	25.66%	46.68%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%