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Trend Micro
(4704)
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Rating:68Neutral
Price Target:
¥6,119.00
▼(-5.72% Downside)
Action:Reiterated
Date:08/20/26
The score is primarily supported by strong financial quality (high margins, strong ROE, and zero debt) and reasonable income-oriented valuation (3.30% dividend). It is held back by weak technical momentum (below key moving averages with negative MACD) and earnings-call risks where increased cloud/AI investments are materially compressing profits and drove downward income guidance revisions despite solid ARR growth.
Positive Factors
Debt-free balance sheet and strong profitability
A debt-free balance sheet limits financial risk and preserves flexibility for investment, while strong ROE and consistently high gross margins indicate a profitable, scalable business model with durable financial capacity.
Negative Factors
Cloud and AI investment is compressing profitability
Heavy cloud, AI and transition spending is reducing near-term operating leverage and earnings visibility. Although management expects costs to moderate, the timing and scale of margin recovery remain uncertain as the business transforms.
Read all positive and negative factors
Positive Factors
Negative Factors
Debt-free balance sheet and strong profitability
A debt-free balance sheet limits financial risk and preserves flexibility for investment, while strong ROE and consistently high gross margins indicate a profitable, scalable business model with durable financial capacity.
Read all positive factors
Trend Micro (4704) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥731.19B
Dividend Yield3.24%
Average Volume (3M)775.08K
Price to Earnings (P/E)21.2
Beta (1Y)0.21
Revenue Growth6.86%
EPS Growth14.89%
CountryJP
Employees6,717
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)269.94
Shares Outstanding140,901,610
10 Day Avg. Volume999,720
30 Day Avg. Volume775,083
Financial Highlights & Ratios
PEG Ratio18.99
Price to Book (P/B)6.55
Price to Sales (P/S)3.10
P/FCF Ratio13.48
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥5,750.00Price Target Upside-11.40% Downside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)266.83
Revenue Forecast (FY)¥299.94B
Trend Micro Business Overview & Revenue Model
Company Description
Trend Micro Incorporated, established in 1965 and headquartered in Tokyo, Japan, is a leading provider of computer and internet security software, primarily serving the Japanese market. The company offers a comprehensive suite of hybrid cloud secu...
How the Company Makes Money
Trend Micro makes money primarily by selling cybersecurity software and services, largely on a recurring basis. Its core revenue model is subscription licensing (and renewals) for security products delivered as on-premises software, cloud/SaaS off...
Trend Micro Earnings Call Summary
Earnings Call Date:Aug 13, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Neutral
Balanced: The call presented strong product and ARR momentum (notably Vision One’s 49% ARR growth, 122% NRR, improved retention and clear AI-driven productivity gains) and a defined multi-year strategy toward AI-native cybersecurity leadership. Offsetting this, the company is absorbing sizable near-term investments — particularly cloud/AI consumption, internal AI ramp-up and one-time infrastructure/transition costs — which materially pressured operating income and led to downward revisions to income guidance. Management positioned the cost increases as deliberate, temporary, and targeted to unlock future growth and improved unit economics, with expectations of improvement in the second half, but timing and magnitude of margin recovery remain key uncertainties.Positive Updates
Top-line Growth and Record Quarterly Sales
Company reported highest-ever quarterly net sales with net sales up 13% year-over-year (reported). On a constant-currency basis net sales grew ~3%.
Negative Updates
Significant Cost Increases Driving Profitability Pressure
Operating income declined materially (management noted operating income down ~54%), driven by cost growth of ~29%. Company revised down operating income, ordinary income and net income for the full year due to elevated investment-related expenses.
Read all updates
Q2-2026 Updates
Positive
Negative
Top-line Growth and Record Quarterly Sales
Company reported highest-ever quarterly net sales with net sales up 13% year-over-year (reported). On a constant-currency basis net sales grew ~3%.
Read all positive updates
Company Guidance
Management reiterated unchanged full‑year net sales guidance but said operating income, ordinary income and net income were revised down to reflect higher cloud- and AI-related investments; ARR is the primary leading indicator (total ARR about $1.7B, up 5% YoY vs 3% in Q1, enterprise ARR improved from 4% to 6% QoQ with further H2 improvement expected and a long‑term aim of double‑digit ARR growth). Key product metrics: Vision One ARR grew 49% YoY to $615M, NRR 122%, GRR improved to 87% (from 85%), ~45% attachment and an average of 4.2 solutions per customer; services ARR is $81M (up 27%) across >2,200 customers. Cost and unit‑economics metrics: reported net sales growth 13% (3% constant currency), costs grew 29%, operating income fell ~54%, management cited a JPY12bn increase in sales/cloud cost (≈80% cloud); unit cloud/AI consumption was $0.14 per $1 SaaS ARR in H1 2026 (vs $0.13 H1 2025 and $0.19 H1 2024). Investment breakdown included ~ $12.6M in internal AI transformation (+6,000%), ~$6.5M infrastructure expansion and ~$7.2M transition costs; headcount is basically flat and FX planning is JPY157 (current ~160); management expects cloud and transition costs to moderate in H2 as scale and GPU transition benefits kick in.Trend Micro Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
86
Very Positive
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 290.67B | 275.98B | 272.64B | 248.69B | 223.79B | 190.36B |
| Gross Profit | 224.94B | 212.27B | 207.66B | 185.03B | 169.50B | 148.34B |
| EBITDA | 82.13B | 79.39B | 84.51B | 60.29B | 67.13B | 73.28B |
| Net Income | 35.42B | 34.52B | 34.36B | 10.73B | 29.84B | 38.37B |
Balance Sheet | ||||||
| Total Assets | 405.19B | 422.24B | 400.32B | 492.63B | 470.80B | 420.46B |
| Cash, Cash Equivalents and Short-Term Investments | 231.36B | 231.03B | 210.90B | 299.03B | 242.85B | 256.80B |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 286.04B | 291.11B | 280.87B | 278.21B | 242.12B | 199.03B |
| Stockholders Equity | 118.99B | 130.63B | 119.44B | 214.39B | 228.66B | 220.64B |
Cash Flow | ||||||
| Free Cash Flow | 63.85B | 63.48B | 45.56B | 55.05B | 55.50B | 53.11B |
| Operating Cash Flow | 65.12B | 64.64B | 46.78B | 57.23B | 56.90B | 55.27B |
| Investing Cash Flow | -14.98B | 2.86B | 4.83B | 30.99B | -67.71B | 3.95B |
| Financing Cash Flow | -37.40B | -29.57B | -130.69B | -43.42B | -30.44B | -17.82B |
Trend Micro Technical Analysis
Negative
6490.00
Price Trends
6134.36
Negative
5967.99
Negative
6156.44
Negative
Market Momentum
-212.65
Positive
42.59
Neutral
52.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4704, the sentiment is Negative. The current price of 6490 is above the 20-day moving average (MA) of 6122.15, above the 50-day MA of 6134.36, and above the 200-day MA of 6156.44, indicating a bearish trend. The MACD of -212.65 indicates Positive momentum. The RSI at 42.59 is Neutral, neither overbought nor oversold. The STOCH value of 52.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4704.
Trend Micro Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | ¥49.89B | 30.23 | ― | 0.64% | 19.17% | 46.29% | |
77 Outperform | ¥18.46B | 19.76 | ― | 0.28% | 22.65% | 74.18% | |
76 Outperform | ¥42.63B | 13.55 | 20.19% | 3.09% | 12.25% | 84.46% | |
75 Outperform | ¥2.34B | 99.01 | ― | 0.58% | -0.89% | -77.64% | |
68 Neutral | ¥731.19B | 21.16 | 30.96% | 2.85% | 6.86% | 14.89% | |
66 Neutral | ¥70.04B | 43.38 | ― | 0.90% | 25.26% | 52.87% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
JP:4704
Trend Micro
5,711.00
-1,952.39
-25.48%
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Global Security Experts Inc.
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JP:4493
Cyber Security Cloud, Inc.
1,850.00
44.00
2.44%
Trend Micro Corporate Events
Trend Micro Posts Higher Revenue but Lower Operating Profit in H1 2026
Aug 13, 2026
Trend Micro reported consolidated net sales of ¥148.6 billion for the first half of 2026, an 11% year-on-year increase, while net income attributable to owners of the parent rose 6.2% to ¥15.2 billion, lifting basic earnings per share to...
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.