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Tokyo Electron Ltd. (JP:8035)
:8035
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Tokyo Electron
(OTC:8035)
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Rating:76Outperform
Price Target:
¥27,403.00
▲(3.23% Upside)
Tokyo Electron's strong financial performance and reasonable valuation are the primary drivers of its overall score. While technical indicators show positive momentum, caution is advised due to overbought signals. The absence of earnings call and corporate events data limits the analysis to these factors.
Positive Factors
Negative Factors
Tokyo Electron (8035) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
$12.16T
Dividend Yield2.05%
Average Volume (3M)4.75M
Price to Earnings (P/E)23.8
Beta (1Y)1.57
Revenue Growth21.68%
EPS Growth26.74%
CountryJP
Employees17,702
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)653.73
Shares Outstanding471,632,720
10 Day Avg. Volume7,344,630
30 Day Avg. Volume4,748,420
Financial Highlights & Ratios
PEG Ratio0.33
Price to Book (P/B)4.99
Price to Sales (P/S)3.81
P/FCF Ratio21.84
Enterprise Value/Market Cap0.72
Enterprise Value/Revenue3.61
Enterprise Value/Gross Profit7.71
Enterprise Value/Ebitda11.81
Forecast
1Y Price Target
$29,444.28Price Target Upside10.92% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Tokyo Electron Business Overview & Revenue Model
Company DescriptionTokyo Electron Limited, together with its subsidiaries, develops, manufactures, and sells semiconductor and flat panel display (FPD) production equipment in Japan, Europe, North America, Taiwan, China, South Korea, and internationally. The company's Semiconductor Production Equipment segment offers coaters/developers, etch systems, deposition systems, and cleaning systems used in wafer processing; wafer probers used in wafer testing process; and wafer bonders/debonders. Its Flat Panel Display Production Equipment segment provides coaters/developers and etch/ash systems for use in the manufacture of FPDs, as well as inkjet printing systems for manufacturing OLED panels. The company also offers logistic, facility maintenance, and insurance services. Tokyo Electron Limited was incorporated in 1951 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyTokyo Electron generates revenue primarily through the sale of semiconductor manufacturing equipment and services, which constitute the bulk of its earnings. The company’s revenue model is heavily reliant on the cyclical nature of the semiconductor industry, where demand for equipment tends to increase in line with technological advancements and consumer electronics growth. Key revenue streams include the sale of capital equipment, maintenance and support services, and spare parts for existing equipment. Additionally, TEL benefits from strategic partnerships with leading semiconductor manufacturers, which can lead to long-term contracts and collaborations on new technologies. The company also invests in research and development to innovate and improve its product offerings, ensuring a competitive edge in the market.
Tokyo Electron Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Nov 07, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook driven by strong financial performance, record growth projections, and advancements in AI technology. Despite challenges such as cash flow issues, China market volatility, and regulatory hurdles, the company remains confident in its strategic initiatives and technological advancements.Q3-2025 Updates
Positive Updates
Strong Financial Performance
Net sales reached ¥654.5 billion, a 15.5% increase from the previous quarter. Gross profit was ¥311.7 billion, a 19.9% increase, and operating income reached ¥199.6 billion, a 34.7% increase. Net income attributable to owners of parent was ¥157.2 billion, a 33.6% increase.
Record Growth Projections
Tokyo Electron expects fiscal 2025 full-year net sales to reach ¥2.400 trillion, representing a 31% positive growth year-over-year, outperforming market growth.
Advancements in AI and Semiconductor Technology
Significant demand for AI semiconductors is driving growth. The WFE market is expected to continue achieving record highs, with double-digit growth anticipated for 2026.
Strategic Product Development
High-value strategic products like cryogenic etching and Episode 1 wafer film deposition system are gaining traction, with increasing PORs for advanced logic and DRAM applications.
Negative Updates
Cash Flow Challenges
The third quarter saw a free cash outflow of ¥64.1 billion due to transient increase in receivables and tax payments, though improvement is expected in the fourth quarter.
China Market Volatility
Proportion of sales from China is expected to decline from over 40% to the mid-30% level next fiscal year, with expectations of a 10-20% decline in the China market for non-memory areas.
Regulatory Challenges
U.S. export controls and regulations are impacting business, though the company is closely monitoring the situation and adapting strategies accordingly.
Company Guidance
During the third quarter of the fiscal year ending March 2025, Tokyo Electron reported robust financial performance, with net sales reaching ¥654.5 billion, marking a 15.5% increase from the previous quarter. The company achieved a gross profit of ¥311.7 billion, representing a 19.9% rise, and an improved gross profit margin of 47.6%, up by 1.7 percentage points. Operating income surged by 34.7% to ¥199.6 billion, with an operating profit margin of 30.5%, up by 4.3 percentage points. Income before income taxes increased by 30.3% to ¥200.1 billion, and net income attributable to owners stood at ¥157.2 billion, a 33.6% rise. The company reported capital expenditures of ¥50.2 billion, focusing on future growth investments. The balance sheet showed total assets at ¥2,501.9 billion, with a notable decline in cash and cash equivalents by ¥230.0 billion due to dividends, share repurchase, and tax payments. Free cash outflow was reported at ¥64.1 billion, with expectations for positive figures in the fourth quarter. The ongoing strategic share repurchase program saw the acquisition of 2,024,200 shares at ¥46.9 billion, completed in January 2025.Tokyo Electron Financial Statement Overview
Summary
Tokyo Electron demonstrates strong financial performance with robust revenue growth, high profit margins, and efficient cash flow management. The company's low debt-to-equity ratio and high return on equity further underscore its financial stability and growth potential.Income Statement
Tokyo Electron has demonstrated strong revenue growth of 4.65% in the latest year, with impressive gross and net profit margins of 47.14% and 22.38%, respectively. The EBIT and EBITDA margins are also robust at 29.04% and 31.60%, indicating efficient operational management. These metrics highlight the company's strong profitability and growth trajectory in the semiconductor industry.92
Very Positive
Balance Sheet
The company maintains a very low debt-to-equity ratio of 0.0115, showcasing financial stability and low leverage risk. With a high return on equity of 29.33%, Tokyo Electron effectively generates profits from its equity base. The equity ratio stands at 70.65%, reflecting a solid capital structure with significant equity financing.88
Very Positive
Cash Flow
Tokyo Electron's free cash flow growth rate of 39.73% is a positive indicator of its cash-generating ability. The operating cash flow to net income ratio of 0.86 and free cash flow to net income ratio of 0.73 suggest strong cash flow management, supporting operational and strategic initiatives.85
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.43T | 2.43T | 1.83T | 2.21T | 2.00T | 1.40T |
| Gross Profit | 1.14T | 1.15T | 830.27B | 984.41B | 911.82B | 564.95B |
| EBITDA | 741.98B | 768.38B | 508.68B | 660.82B | 636.20B | 354.73B |
| Net Income | 535.75B | 544.13B | 363.96B | 471.58B | 437.08B | 242.94B |
Balance Sheet | ||||||
| Total Assets | 2.51T | 2.63T | 2.46T | 2.31T | 1.89T | 1.43T |
| Cash, Cash Equivalents and Short-Term Investments | 367.51B | 496.24B | 472.55B | 473.10B | 371.27B | 311.55B |
| Total Debt | 39.41B | 21.40B | 13.32B | 13.22B | 4.36B | 3.81B |
| Total Liabilities | 636.58B | 770.77B | 696.28B | 712.07B | 547.41B | 400.80B |
| Stockholders Equity | 1.87T | 1.86T | 1.76T | 1.60T | 1.35T | 1.02T |
Cash Flow | ||||||
| Free Cash Flow | 263.96B | 423.80B | 317.73B | 359.37B | 227.23B | 92.08B |
| Operating Cash Flow | 473.35B | 582.17B | 434.72B | 426.27B | 283.39B | 145.89B |
| Investing Cash Flow | -186.46B | -169.61B | -125.15B | -41.76B | -55.63B | -18.27B |
| Financing Cash Flow | -345.54B | -388.84B | -325.01B | -256.53B | -167.26B | -114.53B |
Tokyo Electron Technical Analysis
Positive
26545.00
Price Trends
23369.40
Positive
23892.35
Positive
23449.86
Positive
Market Momentum
1313.75
Negative
70.59
Negative
90.01
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8035, the sentiment is Positive. The current price of 26545 is above the 20-day moving average (MA) of 22775.75, above the 50-day MA of 23369.40, and above the 200-day MA of 23449.86, indicating a bullish trend. The MACD of 1313.75 indicates Negative momentum. The RSI at 70.59 is Negative, neither overbought nor oversold. The STOCH value of 90.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8035.
Tokyo Electron Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $12.16T | 23.77 | 29.80% | 2.05% | 21.68% | 26.74% | |
74 Outperform | 10.59T | 48.58 | 39.62% | 0.27% | 72.67% | 196.67% | |
73 Outperform | 5.06T | 43.94 | ― | 0.79% | 19.04% | 30.11% | |
72 Outperform | 1.23T | 13.86 | 23.65% | 2.09% | 16.20% | 22.07% | |
67 Neutral | 1.78T | 22.94 | ― | 1.46% | 17.78% | 43.29% | |
65 Neutral | 3.19T | -33.86 | -4.72% | 1.56% | -12.38% | -133.53% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
JP:8035
Tokyo Electron
26,545.00
1,602.19
6.42%
ADTTF
Advantest
79.96
33.02
70.35%
DINRF
SCREEN Holdings Co
76.25
7.16
10.36%
DISPF
Disco
312.81
52.35
20.10%
LSRCF
Lasertec
132.03
-29.87
-18.45%
RNECF
Renesas Electronics
12.50
-1.30
-9.42%
Tokyo Electron Corporate Events
Tokyo Electron Continues Global Stock Delivering Scheme
Jul 31, 2025
Tokyo Electron Limited has decided to continue its stock delivering scheme, initially introduced in 2018, as a global incentive plan for its directors, corporate officers, and employees. This scheme is designed to align the interests of TEL’s employees with shareholders by linking compensation to performance and fostering a sense of belonging within the company. The continuation of this scheme reflects TEL’s commitment to enhancing its corporate value and maintaining a compensation system that aligns with the interests of its stakeholders.
The most recent analyst rating on (JP:8035) stock is a Buy with a Yen41000.00 price target. To see the full list of analyst forecasts on Tokyo Electron stock, see the JP:8035 Stock Forecast page.
Tokyo Electron Reports Strong Q1 Results but Revises Forecasts Amid Market Uncertainty
Jul 31, 2025
Tokyo Electron reported its consolidated financial results for the first quarter ended June 30, 2025, showing a significant increase in net sales and operating income compared to the previous fiscal year. Despite the positive growth in these areas, the company has revised its financial forecasts and dividend estimates for the year ending March 31, 2026, indicating a cautious outlook amid market uncertainties. This adjustment may impact stakeholders’ expectations and reflects the company’s strategic positioning in a volatile industry.
The most recent analyst rating on (JP:8035) stock is a Buy with a Yen41000.00 price target. To see the full list of analyst forecasts on Tokyo Electron stock, see the JP:8035 Stock Forecast page.
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.