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Advantest
(6857)
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Rating:79Outperform
Price Target:
¥39,371.00
▲(10.28% Upside)
Action:Reiterated
Date:10/16/26
The score is driven primarily by outstanding financial strength (very high margins, strong ROE, solid free cash flow, and very low leverage) and a constructive earnings outlook highlighted by a higher SoC TAM and accelerating capacity plans. This is tempered by expensive valuation (high P/E and low dividend yield) and mixed near-term technical momentum with the stock trading below key short-term moving averages.
Positive Factors
High profitability and cash generation
Exceptional margins and strong conversion of earnings into free cash flow indicate substantial operating leverage and financial quality. This gives Advantest internal funding capacity for expansion, resilience during industry weakness, and flexibility to invest while sustaining shareholder returns.
Negative Factors
Memory segment weakness
Memory-related competition and transition timing can reduce demand for Advantest’s testers even while SoC markets remain strong. This creates mix risk, uneven revenue across product lines, and potential pressure on growth as customers delay or reprioritize memory investments.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability and cash generation
Exceptional margins and strong conversion of earnings into free cash flow indicate substantial operating leverage and financial quality. This gives Advantest internal funding capacity for expansion, resilience during industry weakness, and flexibility to invest while sustaining shareholder returns.
Read all positive factors
Advantest (6857) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥21.67T
Dividend Yield0.21%
Average Volume (3M)12.04M
Price to Earnings (P/E)52.7
Beta (1Y)1.81
Revenue Growth36.20%
EPS Growth104.76%
CountryJP
Employees7,241
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)633.25
Shares Outstanding732,000,000
10 Day Avg. Volume15,486,520
30 Day Avg. Volume12,039,206
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)18.62
Price to Sales (P/S)13.13
P/FCF Ratio49.02
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥45,076.92Price Target Upside26.27% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)934.42
Revenue Forecast (FY)¥1.76T
Advantest Business Overview & Revenue Model
Company Description
Advantest Corporation is a leading provider of advanced testing equipment for semiconductors and electronic components, in addition to mechatronics-based solutions. The company's operations are divided into three primary divisions: Semiconductor a...
How the Company Makes Money
Advantest primarily makes money by selling semiconductor test systems (automatic test equipment) that customers use to electrically test chips during manufacturing. Revenue is generated mainly from (1) new ATE system sales, where customers purchas...
Advantest Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call communicates strong, broad-based demand (SoC TAM upgrade, platform leverage, market share gains, capacity acceleration and extended customer visibility) tempered by near-term memory competition and DRAM-driven margin headwinds. Management is confident in acting on the upside (pulling in capacity targets, contract manufacturer expansion, roadmap-backed memory product commitments) while remaining conservative on margins due to known, addressable supply-cost pressures and some timing uncertainty for capacity milestones.Positive Updates
SoC TAM Upward Revision
Company revised SoC tester TAM midpoint from $9.1B to $11.0B, a +$2.0B increase (≈+22%), driven primarily by inference and compute-related demand.
Negative Updates
Memory Segment Headwinds and Near-Term Downturn
Management expects the memory business may see a near-term dip this year due to competition (including NAND transitions) and product transition timing; memory is more competitive and may cause a short-term revenue softness.
Read all updates
Q1-2026 Updates
Positive
Negative
SoC TAM Upward Revision
Company revised SoC tester TAM midpoint from $9.1B to $11.0B, a +$2.0B increase (≈+22%), driven primarily by inference and compute-related demand.
Read all positive updates
Company Guidance
Guidance highlights: management raised its SoC tester TAM midpoint from $9.1B to $11.0B (a $2.0B uplift) driven mostly by inferencing/compute across GPU, custom ASIC and CPU, and said SoC tester sales projections were revised upward; they reiterated strong demand and are accelerating capacity—running toward ~5,000 93K units (previously targeted by Mar‑2027) and pulling in plans for 10,000 units (previously end‑2028/early‑2029) with contract manufacturers adding a second Southeast Asia factory (10,000 93K today ≈ 20,000 of the ~1,000‑unit 2020 config, ~20x growth in 7–8 years); Q1 mix was ~80–85% SoC / ~15% memory, China was ~19% of sales, and company reported a 66% SoC share in 2025 with a path toward 70%+, visibility into demand extended to ~18 months (vs. historical ~6 months), while margins were flagged as conservatively modeled for the rest of the year due to DRAM/memory BOM inflation and one‑time inventory reversals boosting the quarter.Advantest Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
94
Very Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.23T | 1.13T | 779.71B | 486.51B | 560.19B | 416.90B |
| Gross Profit | 810.02B | 726.11B | 445.08B | 246.03B | 319.06B | 235.91B |
| EBITDA | 611.76B | 545.09B | 257.13B | 105.63B | 193.38B | 131.59B |
| Net Income | 459.95B | 375.35B | 161.18B | 62.29B | 130.40B | 87.30B |
Balance Sheet | ||||||
| Total Assets | 1.51T | 1.17T | 854.21B | 671.23B | 600.22B | 494.70B |
| Cash, Cash Equivalents and Short-Term Investments | 413.12B | 339.97B | 262.54B | 106.70B | 85.54B | 116.58B |
| Total Debt | 108.17B | 20.19B | 93.50B | 94.44B | 50.84B | 43.46B |
| Total Liabilities | 472.01B | 376.09B | 347.67B | 240.05B | 231.53B | 200.07B |
| Stockholders Equity | 1.04T | 795.73B | 506.54B | 431.18B | 368.69B | 294.62B |
Cash Flow | ||||||
| Free Cash Flow | 388.27B | 302.17B | 268.56B | 12.13B | 46.64B | 60.67B |
| Operating Cash Flow | 425.49B | 335.18B | 285.97B | 32.67B | 70.22B | 78.89B |
| Investing Cash Flow | -133.66B | -34.55B | -42.19B | -27.94B | -26.71B | -46.91B |
| Financing Cash Flow | -164.63B | -230.55B | -82.82B | 10.76B | -77.43B | -68.74B |
Advantest Technical Analysis
Negative
35700.00
Price Trends
34923.10
Negative
32243.56
Negative
28642.58
Positive
Market Momentum
-556.15
Positive
35.66
Neutral
9.80
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6857, the sentiment is Negative. The current price of 35700 is below the 20-day moving average (MA) of 36613.90, above the 50-day MA of 34923.10, and above the 200-day MA of 28642.58, indicating a neutral trend. The MACD of -556.15 indicates Positive momentum. The RSI at 35.66 is Neutral, neither overbought nor oversold. The STOCH value of 9.80 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6857.
Advantest Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | ¥21.67T | 52.68 | 58.91% | 0.21% | 36.20% | 104.76% | |
77 Outperform | ¥2.08T | 25.78 | 18.49% | 1.30% | -5.60% | -10.68% | |
74 Outperform | ¥21.20T | 6.94 | 30.21% | 4.84% | 8.25% | 16.50% | |
73 Outperform | ¥608.75B | 23.92 | 14.14% | 2.04% | 13.77% | 3.10% | |
72 Outperform | ¥3.37T | 45.50 | 34.29% | 0.88% | -8.35% | -8.08% | |
67 Neutral | ¥5.25T | 33.94 | 27.34% | 1.13% | 22.16% | 26.52% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
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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.