Megachips (6875) AI Stock Analysis

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Megachips

(TSE/TYO:6875)

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Rating:59.6Neutral

Price Target:JPY 8,856.00▲(1.68% Upside)

Action:downgraded

Date:11/11/26

The overall score is weighed down by extremely weak technicals, indicating strong negative market momentum and a sustained downtrend. The company's financial health is a tale of two stories: a pristine, debt-free balance sheet provides a strong foundation, but this is undermined by inconsistent cash flows and revenue declines. The valuation is the most compelling positive factor, with a rock-bottom P/E ratio and a solid dividend yield that may attract value investors, though the technical picture suggests the market is pricing in significant fundamental concerns.

Positive Factors

Debt-free balance sheetZero debt materially reduces financial risk and interest burden, giving Megachips greater flexibility through semiconductor cycles. The stronger equity and asset base also provides capacity to fund development, absorb operating volatility, and pursue opportunities without relying heavily on external financing.

Negative Factors

Negative cash conversionNegative trailing operating and free cash flow show that reported performance is not consistently converting into cash. This weakens internal funding capacity, makes investment and shareholder returns less dependable, and increases the importance of reversing the cash-flow volatility seen across multiple periods.

Megachips (6875) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 128.46B
Dividend Yield: 2.87%
Average Volume (3M): 121.30K
Price to Earnings (P/E): 3.0
Beta (1Y): 1.21
Revenue Growth: -11.69%
EPS Growth: 1721.24%
Country: Japan
Employees: 328
Sector: Technology
Sector Strength: 61
Industry: Semiconductors

Megachips Business Overview & Revenue Model

Company Description

Founded in 1990 and headquartered in Osaka, Japan, MegaChips Corporation operates worldwide, focusing on the creation, production, and sale of semiconductor technologies. The company's core offerings include custom-designed integrated circuits (ASICs...

Megachips Financial Statement Overview

Summary

The balance sheet is a major strength with zero debt and growing equity, supporting a high score in that area. However, the income statement shows revenue pressure and the cash flow statement reveals inconsistent generation, with negative TTM operating cash flow. The overall financial picture is mixed, with a fortress balance sheet offset by weak cash conversion and top-line challenges.

Income Statement

58Neutral

Balance Sheet

88Very Positive

Cash Flow

42Neutral

Financial statement breakdown
Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	39.83B	36.17B	42.33B	57.94B	70.72B	75.26B
Gross Profit	6.90B	5.51B	7.83B	11.44B	12.05B	13.61B
EBITDA	16.10B	14.91B	9.45B	9.51B	11.36B	37.38B
Net Income	43.26B	9.28B	5.37B	4.49B	7.09B	27.54B
Balance Sheet
Total Assets	475.16B	255.16B	149.94B	126.61B	89.08B	89.87B
Cash, Cash Equivalents and Short-Term Investments	44.69B	15.29B	20.83B	28.06B	20.72B	25.77B
Total Debt	0	0	0	0	0	0
Total Liabilities	138.22B	69.49B	31.70B	23.94B	14.54B	22.44B
Stockholders Equity	335.95B	184.77B	117.81B	102.41B	74.54B	67.43B
Cash Flow
Free Cash Flow	-3.55B	3.39B	-6.03B	7.22B	452.31M	-983.37M
Operating Cash Flow	-1.23B	5.30B	-3.73B	8.16B	1.24B	-195.28M
Investing Cash Flow	59.15B	10.49B	3.59B	214.06M	-5.52B	20.02B
Financing Cash Flow	-25.72B	-18.44B	-7.51B	-5.39B	-1.74B	-16.53B

Megachips Technical Analysis

Technical Analysis SentimentNegative

Last Price8710.00

Price Trends

50DMA10367.60Negative

100DMA10348.50Negative

200DMA9949.17Negative

Market Momentum

MACD-582.19Positive

RSI36.69Neutral

STOCH21.46Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6875, the sentiment is Negative. The current price of 8710.00 is below the 20-day moving average (MA) of 9559.50, below the 50-day MA of 10367.60, and below the 200-day MA of 9949.17, indicating a bearish trend. The MACD of -582.19 indicates Positive momentum. The RSI at 36.69 is Neutral, neither overbought nor oversold. The STOCH value of 21.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6875.

Megachips Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:6875 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:6723	69Neutral	JPY 4.87T	8.82	22.62%	0.96%	25.66%	―
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
JP:6616	60Neutral	JPY 15.16B	7.46	―	3.91%	9.34%	―
JP:6875	60Neutral	JPY 128.46B	3.02	19.70%	2.87%	-11.69%	1721.24%
JP:6769	45Neutral	JPY 9.85B	1397.01	―	1.57%	86.23%	-19.85%
JP:6707	43Neutral	JPY 114.45B	-11.21	―	―	-14.91%	-1051.33%
JP:6963	42Neutral	JPY 1.17T	-7.79	-19.02%	1.58%	12.10%	-266.23%

* Technology Sector Average

Performance Comparison

JP:6875 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:6875	Megachips Corporation	8710.00	569.41	6.99%
JP:6723	Renesas Electronics Corporation	2840.00	930.06	48.70%
JP:6963	Rohm Co	2935.00	826.95	39.23%
JP:6616	Torex Semiconductor Ltd.	1420.00	-68.31	-4.59%
JP:6707	Sanken Electric Co., Ltd.	5785.00	344.00	6.32%
JP:6769	Thine Electronics, Inc.	925.00	117.43	14.54%

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.

Date of analysis: Nov 10, 2026

Megachips AI Stock Analysis