Disco AI Stock Analysis
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Disco (DSCSY) AI Stock Analysis
Disco
(Other OTC:DSCSY)
The score is driven primarily by very strong financial performance (elite margins, strong ROE, and a debt-free balance sheet), partially offset by weak technicals (downtrend across key moving averages and negative MACD) and a premium valuation (P/E ~33.6) with only a modest dividend yield.
Disco (DSCSY) vs. SPDR S&P 500 ETF (SPY)
- Market Cap
- $31.60B
- Dividend Yield
- 1.04%
- Average Volume (3M)
- 271.87K
- Price to Earnings (P/E)
- 32.2
- Beta (1Y)
- 1.25
- Revenue Growth
- 15.84%
- EPS Growth
- 20.22%
- Country
- US
- Employees
- 5,547
- Sector
- Technology
- Sector Strength
- 61
- Industry
- Semiconductors
Disco Business Overview & Revenue Model
Company Description
Disco Corporation, founded in 1937 and headquartered in Tokyo, Japan, is a global leader in the manufacturing and distribution of sophisticated machinery for precision cutting, grinding, and polishing. Its comprehensive range of high-precision equipm...
Disco Earnings Call Summary
The call presented a mix of strong near-term operational achievements—most notably a record JPY111.1 billion quarter, significant generative AI- and memory-led IC strength, OSAT improvement, and stable high gross margins when adjusted for FX—alongside meaningful near-term risks: expected Q2 timing-related shipment decline, weakness in power semiconductors and SiC consumables, FX-driven margin pressure, and reduced visibility for H2/Q4 due to shorter customer forecasts. Advanced technology pipelines (hybrid bonding, PLP) show progress but are not yet material to revenue.
Q1-2026 Updates
Positive Updates
Negative Updates
Company Guidance
The company gave guidance that Q1 shipments were a record JPY111.1bn and management raised its external outlook by about JPY9bn (≈+JPY5bn for machinery & equipment and ≈+JPY3bn for other products), noting some projects were pulled into Q1 (including evaluation machines contributing just over JPY4bn) and that a prior Q4 delay of JPY5bn was split roughly JPY3bn into Q1 and JPY2bn into Q2. By application, Q1 memory was just over 40% (DRAM:NAND roughly 60–70:30–40), OSAT about 30%, and power semiconductors under 10% (SiC single‑digit); for Q2 management expects memory ~35%, OSAT <30% and power <10%. Profitability: Q1 gross margin was 68.1% (would be ~70% at last year’s JPY158/USD vs actual Q1 FX JPY144), the company assumes JPY135/USD for Jul–Sep and sees GP down by less than 2 percentage points in Q2; SG&A for Jul–Sep is guided at about JPY27bn (Q1 SG&A ≈JPY26.7bn). Operationally, generative‑AI/HBM drove the Q1 IC strength, consumable demand (notably SiC) is down YoY but plant activity remains generally busy, North America accounts for ~10% of projects, and management expects a timing‑driven Q2 dip with Q3 likely a bit stronger but H2 (especially Q4) still uncertain.
Disco Financial Statement Overview
Summary
Strong multi-year revenue expansion and exceptional profitability (very high gross and operating margins) supported by a debt-free, steadily compounding equity base and strong ROE. Main offsets are uneven growth (notably the near-flat 2025) and inconsistent cash conversion versus net income despite solid, rebounding free cash flow.
Income Statement
92Very PositiveBalance Sheet
95Very PositiveCash Flow
84Very Positive| Breakdown | TTM | Mar 2026 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 410.63B | 393.31B | 463.24B | 307.55B | 284.13B | 253.78B |
| Gross Profit | 285.87B | 277.57B | 323.93B | 208.64B | 184.47B | 153.97B |
| EBITDA | 184.27B | 179.03B | 209.93B | 132.52B | 120.75B | 100.02B |
| Net Income | 126.92B | 123.89B | 143.70B | 84.20B | 82.89B | 66.21B |
Balance Sheet | ||||||
| Total Assets | 661.79B | 654.09B | 746.63B | 556.06B | 472.69B | 404.54B |
| Cash, Cash Equivalents and Short-Term Investments | 226.47B | 229.17B | 285.81B | 215.49B | 163.05B | 125.77B |
| Total Debt | 0 | 0 | 0 | 0 | 0 | 0 |
| Total Liabilities | 135.82B | 161.39B | 155.96B | 149.50B | 124.65B | 110.73B |
| Stockholders Equity | 525.62B | 492.35B | 590.31B | 406.37B | 347.80B | 293.54B |
Cash Flow | ||||||
| Free Cash Flow | 0 | 53.43B | 103.73B | 81.27B | 67.53B | 40.02B |
| Operating Cash Flow | 0 | 120.36B | 141.60B | 97.52B | 81.78B | 83.65B |
| Investing Cash Flow | 0 | -68.00B | -143.96B | -16.40B | -13.08B | -43.59B |
| Financing Cash Flow | 0 | -38.15B | -47.75B | -30.94B | -32.09B | -27.19B |
Disco Technical Analysis
Price Trends
Market Momentum
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DSCSY, the sentiment is Negative. The current price of 29.69 is below the 20-day moving average (MA) of 30.74, below the 50-day MA of 33.66, and below the 200-day MA of 41.04, indicating a bearish trend. The MACD of -1.71 indicates Negative momentum. The RSI at 42.62 is Neutral, neither overbought nor oversold. The STOCH value of 64.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DSCSY.
Disco Peers Comparison
Overall Rating
FORM72Outperform
KLIC71Outperform- DSCSY71Outperform
ONTO69Neutral
KLAC68Neutral
CAMT64Neutral
Financial Indicators
| Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| FORM | 72Outperform | $7.24B | 39.43 | 15.83% | ― | 29.08% | 320.89% |
| KLIC | 71Outperform | $3.79B | 31.25 | 13.55% | 1.19% | 44.44% | 2283.94% |
| DSCSY | 71Outperform | $32.18B | 32.18 | 27.34% | 1.04% | 15.84% | 20.22% |
| ONTO | 69Neutral | $10.29B | 66.33 | 7.44% | ― | 30.86% | -13.97% |
| KLAC | 68Neutral | $204.96B | 37.86 | 87.02% | 0.55% | 15.80% | 25.58% |
| CAMT | 64Neutral | $4.93B | 35.32 | 19.34% | ― | 12.18% | 173.28% |
| Sector * | 61Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
| Show on chart | Ticker | Company Name | Price | Change | % Change |
|---|---|---|---|---|---|
| DSCSY | Disco Corp | 29.69 | -1.24 | -4.01% | |
| CAMT | Camtek | 101.73 | 5.85 | 6.10% | |
| FORM | Formfactor | 87.53 | 38.48 | 78.45% | |
| KLAC | Kla Corporation | 152.32 | 39.37 | 34.86% | |
| KLIC | Kulicke & Soffa Industries, Inc. | 69.07 | 33.85 | 96.13% | |
| ONTO | Onto Innovation | 203.62 | 76.32 | 59.95% |
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.
Date of analysis: Oct 31, 2026