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Disco
(6146)
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Rating:67Neutral
Price Target:
¥53,751.00
▼(-11.45% Downside)
Action:Downgraded
Date:08/06/26
The score is supported primarily by excellent financial performance (exceptional margins and a debt-free, conservative balance sheet). It is held back by a currently weak-to-mixed technical setup (below key moving averages with negative MACD) and a demanding valuation (high P/E with a low dividend yield).
Positive Factors
Exceptional profitability
Exceptionally high gross, operating, and net margins indicate strong economics in Disco’s precision-processing franchise. If maintained, this profitability provides internal funding for research, capacity, and customer support while creating resilience when semiconductor demand softens.
Negative Factors
Cyclical and uneven growth
Growth has been uneven across years, with particularly strong expansion in 2025 followed by more moderate 2026 revenue growth of about 9.1%. This cyclicality can make capacity planning and earnings progression less predictable, even when the long-term market remains attractive.
Read all positive and negative factors
Positive Factors
Negative Factors
Exceptional profitability
Exceptionally high gross, operating, and net margins indicate strong economics in Disco’s precision-processing franchise. If maintained, this profitability provides internal funding for research, capacity, and customer support while creating resilience when semiconductor demand softens.
Read all positive factors
Disco (6146) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥5.38T
Dividend Yield1.1%
Average Volume (3M)1.68M
Price to Earnings (P/E)33.6
Beta (1Y)1.16
Revenue Growth22.16%
EPS Growth26.52%
CountryJP
Employees5,547
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)1474.96
Shares Outstanding108,523,430
10 Day Avg. Volume2,191,990
30 Day Avg. Volume1,680,983
Financial Highlights & Ratios
PEG Ratio5.26
Price to Book (P/B)11.30
Price to Sales (P/S)15.20
P/FCF Ratio67.88
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥93,333.33Price Target Upside53.76% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)1,755.4
Revenue Forecast (FY)¥569.57B
Disco Business Overview & Revenue Model
Company Description
Established in Tokyo in 1937, Disco Corporation is a leading global manufacturer and distributor of high-precision equipment for cutting, grinding, and polishing. Its extensive catalog of precision machinery encompasses dicing and laser saws, grin...
How the Company Makes Money
Disco makes money primarily by selling capital equipment and recurring consumables/services used in wafer processing. Key revenue streams include: (1) Equipment sales: revenue from the sale of precision dicing saws, grinders, and other wafer proce...
Disco Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jan 28, 2027
Earnings Call Sentiment Neutral
The call presents a mixed picture: strong, record-breaking Q1 shipments (JPY111.1bn) and clear momentum from generative AI-related ICs and OSAT drove an upward revision to near-term guidance (≈JPY9bn uplift). However, nearer-term volatility is expected with a Q2 timing-related decline, FX-related gross margin pressure (Q1 GP 68.1% vs ~70% FX-adjusted; Jul–Sep GP expected to fall <2pp), weakness in power semiconductors and SiC consumables, and reduced order visibility from customers. Strategic technology progress (NAND hybrid bonding, PLP pipeline) is a positive but not yet fully monetized. Overall the positives in Q1 are offset by material near-term uncertainties and headwinds.Positive Updates
Record Quarterly Shipments
Q1 shipments reached JPY111.1 billion, the highest quarterly shipment on record and well above external forecasts.
Negative Updates
Near-Term Timing-Driven Shipment Volatility (Q2 Dip Expected)
Management expects Q2 shipments to decline from Q1 largely due to timing (advance shipments recorded in Q1) and a reaction to concentrated generative AI-related shipments; Q3 may recover somewhat, but Q4 visibility remains weak.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Quarterly Shipments
Q1 shipments reached JPY111.1 billion, the highest quarterly shipment on record and well above external forecasts.
Read all positive updates
Company Guidance
Management guided that Q1 shipments were JPY111.1 billion (a quarterly record, above external forecasts) and that they raised expected shipments by about JPY9 billion overall—more than JPY5 billion for machinery & equipment (including just over JPY4 billion from some evaluation/advanced machine deliveries moved into Q1) and roughly JPY3 billion for other products; Q1 product mix was memory just over 40%, OSAT about 30% and power semiconductors under 10% (SiC at single‑digit percentages), with DRAM:NAND roughly 6:4–7:3, while Q2 is expected to see memory ~35%, OSAT <30% and power <10% as a timing‑related pullback from generative‑AI concentration in Q1. On profitability, Q1 gross profit was 68.1% (would have been ~70% at last year’s FX of JPY158; Apr–Jun FX was JPY144) and management expects Q2 GP to decline by under 2 percentage points assuming a JPY135 FX for Jul–Sep; SG&A is forecast at about JPY27.0 billion for Jul–Sep (JPY26.7 billion in the prior quarter). They noted a JPY5 billion Q4-to‑H1 carryover (JPY3 billion slipped into Q1, ~JPY2 billion into Q2), North America accounts for ~10% of projects, consumables weakness is driven by lower SiC (occupancy should recover into Q2/Q3), and strategic areas show NAND hybrid bonding progressing toward mass production, WMCM demand not yet large, and PLP customer inquiries increasing but not yet volume‑contributory; overall Q3 is expected to be modestly stronger than Q2 but Q4 remains uncertain.Disco Financial Statement Overview
Summary
Income Statement
90
Very Positive
Balance Sheet
94
Very Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Mar 2027 | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 499.41B | 436.89B | 393.31B | 307.55B | 284.13B | 253.78B |
| Gross Profit | 355.41B | 305.50B | 277.45B | 208.60B | 184.47B | 153.97B |
| EBITDA | 237.03B | 198.63B | 180.34B | 125.61B | 123.16B | 100.80B |
| Net Income | 159.97B | 135.52B | 123.89B | 84.21B | 82.89B | 66.21B |
Balance Sheet | ||||||
| Total Assets | 824.58B | 743.41B | 654.09B | 560.42B | 472.69B | 404.54B |
| Cash, Cash Equivalents and Short-Term Investments | 342.41B | 284.57B | 229.17B | 215.49B | 163.05B | 125.77B |
| Total Debt | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 195.57B | 155.28B | 161.38B | 153.85B | 124.65B | 110.73B |
| Stockholders Equity | 628.57B | 587.76B | 492.36B | 406.37B | 347.80B | 293.54B |
Cash Flow | ||||||
| Free Cash Flow | 98.81B | 97.83B | 52.41B | 81.31B | 67.58B | 40.08B |
| Operating Cash Flow | 111.71B | 133.54B | 120.36B | 97.52B | 81.78B | 83.65B |
| Investing Cash Flow | -54.81B | -135.77B | -68.00B | -16.40B | -13.08B | -43.59B |
| Financing Cash Flow | -40.62B | -45.03B | -38.15B | -30.94B | -32.09B | -27.19B |
Disco Technical Analysis
Negative
60700.00
Price Trends
55850.68
Negative
63345.95
Negative
65598.13
Negative
Market Momentum
-1928.97
Positive
38.41
Neutral
60.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6146, the sentiment is Negative. The current price of 60700 is above the 20-day moving average (MA) of 55486.00, above the 50-day MA of 55850.68, and below the 200-day MA of 65598.13, indicating a bearish trend. The MACD of -1928.97 indicates Positive momentum. The RSI at 38.41 is Neutral, neither overbought nor oversold. The STOCH value of 60.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6146.
Disco Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | ¥22.14T | 7.00 | 30.21% | 4.63% | 8.25% | 16.50% | |
73 Outperform | ¥623.74B | 23.54 | 14.14% | 1.99% | 13.77% | 3.10% | |
72 Outperform | ¥3.38T | 43.70 | 34.29% | 0.87% | -8.35% | -8.08% | |
71 Outperform | ¥2.12T | 25.06 | 18.49% | 1.27% | -5.60% | -10.68% | |
67 Neutral | ¥5.38T | 33.59 | 27.34% | 1.10% | 22.16% | 26.52% | |
62 Neutral | ¥1.64T | 46.32 | ― | 0.74% | 14.73% | 17.69% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
JP:6146
Disco
49,540.00
-1,617.01
-3.16%
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Disco Corporate Events
Disco Boosts Interim Dividend Under Performance-Linked Payout Policy
Oct 22, 2026
Disco Corporation’s board has approved a distribution of retained earnings as interim dividends, setting September 30, 2026 as the record date and an interim dividend of 186 yen per share, totaling 20,182 million yen, to be paid on December ...
DISCO Releases Short-Term Forecast Amid Semiconductor Market Volatility
Oct 22, 2026
DISCO CORPORATION has disclosed previously undisclosed business forecasts for the cumulative period from April to December 2026, the third quarter of the fiscal year ending March 31, 2027. The company projects consolidated net sales of 322.5 billi...
Disco Lifts Dividend and Earnings Outlook on Strong FY2026 First-Half Results
Oct 22, 2026
Disco Corporation reported strong consolidated results for the first half of fiscal 2026, with net sales and profits rising sharply year-on-year and comprehensive income jumping to ¥81.3 billion. Total assets and equity continued to grow, whi...
Disco’s Record Shipments and Strong H1 Sales Highlight Generative AI-Driven Demand
Oct 6, 2026
Disco Corporation reported preliminary non-consolidated first-half fiscal 2026 net sales of ¥213.6 billion, up 32.8% year on year and exceeding its latest forecast by more than 6%. The company cautioned that these figures are unaudited but em...
Disco Finalizes Stock Option Terms for Executive Officers
Aug 7, 2026
Disco Corporation has finalized the terms for issuing stock options as share acquisition rights to its executive officers, following a prior board resolution, as part of its executive compensation structure. The plan allocates 36 share acquisition...
Disco completes restricted stock issuance to executive officers
Aug 7, 2026
Disco Corporation has completed payment procedures for the issuance of 3,000 new common shares as restricted stock-based remuneration to six executive officers, following a board resolution in late July. Priced at ¥68,590 per share for a tota...
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.