TDK (TDKA) AI Stock Analysis

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TDK

(Frankfurt:TDKA)

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Positive Factors

Record earnings growthRecord sales and profit growth show strong recent execution across TDK’s diversified businesses. Broad earnings expansion can strengthen reinvestment capacity, support operating leverage, and provide a durable base for growth over the next several quarters.

Negative Factors

Weak and inconsistent cash conversionWeak cash conversion makes reported earnings less dependable as a source of internally funded growth. Negative projected free cash flow, working-capital swings, and investment demands could constrain flexibility and increase reliance on balance-sheet resources.

TDK (TDKA) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 28.57B
Dividend Yield: 1.72%
Average Volume (3M): 150
Price to Earnings (P/E): 17.4
Beta (1Y): 1.17
Revenue Growth: 13.09%
EPS Growth: 37.38%
Country: Germany
Employees: 106,545
Sector: Technology
Sector Strength: 61
Industry: Hardware, Equipment & Parts

TDK Business Overview & Revenue Model

Company Description

TDK Corporation, together with its subsidiaries, engages in the manufacture and sale of electronic components in Japan, Europe, China, Asia, the Americas, and internationally. The company operates through Passive Components, Sensor Application Produc...

TDK Earnings Call Summary

Earnings Call Date:Oct 30, 2026(Q2-2027)|% Change Since:-19.48%|Next Earnings Date:Feb 03, 2027

Earnings Call SentimentPositive

The call was strongly positive overall. TDK reported record first-half and second-quarter sales and profit, broad-based segment growth, particularly strong AI data-center demand, raised full-year guidance, improved ROIC expectations, higher dividends, and substantial investments in AI-related capacity and technologies. The main challenges were lower ICT and smartphone production, expected declines in selected second-half revenues and shipments, negative free cash flow, higher R&D-related SG&A, increased one-time expenses, and continuing losses in magnets, but these did not outweigh the reported growth and outlook.

Positive Updates

Record First-Half Financial Results

First-half net sales reached JPY 1,560.6 billion, up JPY 377.2 billion or 31.9% year-on-year, while operating profit rose JPY 60.5 billion or 41.0% to JPY 208.2 billion. Profit before tax increased 44.5% to JPY 213.1 billion, and net profit rose 58.4% to JPY 176.4 billion. Net sales and all profit items reached record highs.

Negative Updates

Lower ICT Device and Smartphone Production

Tight memory supply and price hikes caused a year-on-year decline in ICT device production, including smartphones. The company revised its smartphone production forecast from an approximately 10% year-on-year decline to a further 5% point year-on-year decline, taking production below 1.1 billion units.

Company Guidance

For fiscal year March 2027, TDK revised its forecast upward to net sales of JPY 3 trillion 550 billion, operating profit of JPY 365 billion, and JPY 280 billion after tax; structural one-time expense is expected to increase from JPY 6 billion to JPY 11 billion, free cash flow is forecast at negative JPY 50 billion, ROIC is expected to improve from the initial forecast of 8% to 9.7%, interim and year-end dividends are planned to rise from JPY 20 to JPY 25 per share, CapEx is increasing by JPY 30 billion to expected annual CapEx of JPY 400 billion, and depreciation is forecast at JPY 250 billion; for the third quarter, Passive Components revenue is expected to increase 3%-6%, Sensor Application Products revenue to decline 4%-7%, Magnetic Application Products segment revenue to increase 0%-3%, and Energy Application Products segment revenue to decline 2%-5%, with nearline HDD production forecast at 79 million units, smartphone production below 1.1 billion units, HDD head shipments expected to rise approximately 5%, suspension shipments expected to fall approximately 6%, and small-capacity batteries shipment volumes projected to fall approximately 10% quarter on quarter.

TDK Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

DE:TDKA against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VICR	72Outperform	$7.46B	42.77	22.49%	―	41.38%	115.22%
APH	71Outperform	$197.42B	32.91	39.61%	0.63%	57.56%	53.30%
AEIS	70Outperform	$8.97B	31.13	19.94%	0.17%	31.66%	92.94%
BELFB	68Neutral	$3.13B	55.77	11.27%	0.12%	20.98%	-22.92%
LFUS	65Neutral	$9.74B	294.59	1.47%	0.77%	18.72%	-74.52%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

* Technology Sector Average

Performance Comparison

DE:TDKA and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:TDKA	TDK Corporation	12.40	-0.41	-3.20%
AEIS	Advanced Energy Industries, Inc.	231.60	29.08	14.36%
APH	Amphenol Corporation	79.31	12.15	18.10%
BELFB	Bel Fuse B	230.89	84.58	57.81%
LFUS	Littelfuse	397.70	158.75	66.44%
VICR	Vicor	168.10	79.52	89.77%

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.

TDK AI Stock Analysis