Tokyo Electron (TOELY) AI Stock Analysis

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Tokyo Electron

(OTC:TOELY)

68Neutral

Tokyo Electron's strong financial health and robust balance sheet are significant strengths, supporting a solid overall score. The technical analysis presents mixed signals, with bearish trends and overbought conditions potentially limiting upside. Valuation appears reasonable with a decent dividend yield, but recent revenue and free cash flow declines pose challenges.

Tokyo Electron (TOELY) vs. S&P 500 (SPY)

Market Cap

$71.68B

Dividend Yield1.55%

Average Volume (3M)9.56K

Price to Earnings (P/E)19.9

Beta (1Y)1.48

Revenue Growth26.33%

EPS Growth43.83%

CountryUS

Employees17,702

SectorTechnology

Sector Strength65

IndustrySemiconductors

Share Statistics

EPS (TTM)1.13

Shares Outstanding1,886,530,900

10 Day Avg. Volume0

30 Day Avg. Volume9,563

Financial Highlights & Ratios

PEG Ratio1.64

Price to Book (P/B)5.59

Price to Sales (P/S)0.00

P/FCF Ratio35.96

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$159.85

Price Target Upside107.01% Upside

Rating ConsensusHold

Number of Analyst Covering0

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 its semiconductor and flat panel display manufacturing equipment. Its key revenue streams include the sale of new equipment, maintenance services, and spare parts. The company also benefits from long-term partnerships and alliances with major semiconductor manufacturers and technology firms, which ensure a steady demand for its products. Tokyo Electron's earnings are further supported by its investment in research and development, enabling the company to continually innovate and maintain its competitive edge in advanced manufacturing technologies. Additionally, the company's global reach and strategic positioning in key markets contribute to its revenue growth and stability.

Tokyo Electron Financial Statement Overview

Summary

Tokyo Electron demonstrates strong financial health with high profitability margins and solid cash flow management. The company benefits from a robust equity position, low leverage, and effective cost control. However, the recent decline in revenue and free cash flow growth could pose challenges if trends continue.

Income Statement

Positive

Tokyo Electron shows strong profitability with a healthy gross profit margin of approximately 45.36% in 2024. However, revenue growth has been negative, with a decline of about 17.14% from 2023 to 2024. Despite this, the company maintains a robust net profit margin of 19.88%, indicating efficient cost management. The EBIT margin remains solid at 24.92%, albeit slightly lower than the previous year due to reduced revenue, reflecting strong operational efficiency.

Balance Sheet

Positive

The balance sheet of Tokyo Electron is strong with a low debt-to-equity ratio of 0.0076, indicating minimal leverage. The company has a high equity ratio of 71.68%, showing strong solvency and asset financing through equity. Return on equity is impressive at 20.68%, suggesting effective use of shareholder funds to generate profits. The company's financial position is stable with solid equity backing and low financial risk.

Cash Flow

Positive

Tokyo Electron's cash flow is positive, with operating cash flow exceeding net income, resulting in a healthy operating cash flow to net income ratio of 1.19. However, there's a decline in free cash flow by around 11.49% from 2023 to 2024, which could impact future investments. Despite this, the company maintains a commendable free cash flow to net income ratio of 0.85, suggesting effective cash management.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
1.99T	1.83T	2.21T	2.00T	1.40T	1.13T
	Gross Profit
931.98B	830.27B	984.41B	911.82B	564.95B	451.94B
	EBIT
539.56B	456.26B	617.72B	599.27B	320.69B	237.29B
	EBITDA
591.25B	508.68B	660.82B	636.20B	354.73B	266.60B
	Net Income Common Stockholders
425.84B	363.96B	471.58B	437.08B	242.94B	185.21B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
472.55B	472.55B	473.10B	371.27B	311.55B	338.41B
	Total Assets
2.46T	2.46T	2.31T	1.89T	1.43T	1.28T
	Total Debt
13.32B	13.32B	13.22B	4.36B	3.81B	3.37B
	Net Debt
-448.29B	-462.38B	-459.25B	-331.29B	-262.19B	-244.59B
	Total Liabilities
696.28B	696.28B	712.07B	547.41B	400.80B	448.80B
	Stockholders Equity
1.76T	1.76T	1.60T	1.35T	1.02T	829.69B
Cash Flow		Free Cash Flow
330.02B	309.74B	349.96B	218.28B	84.96B	200.37B
	Operating Cash Flow
397.72B	434.72B	426.27B	283.39B	145.89B	253.12B
	Investing Cash Flow
-91.09B	-125.15B	-41.76B	-55.63B	-18.27B	15.95B
	Financing Cash Flow
-285.91B	-325.01B	-256.53B	-167.26B	-114.53B	-250.37B

Tokyo Electron Technical Analysis

Technical Analysis Sentiment

Positive

Last Price77.22

Price Trends

50DMA

71.63

Positive

100DMA

76.61

Positive

200DMA

79.80

Negative

Market Momentum

MACD

1.69

Negative

RSI

63.19

Neutral

STOCH

96.22

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TOELY, the sentiment is Positive. The current price of 77.22 is above the 20-day moving average (MA) of 72.75, above the 50-day MA of 71.63, and below the 200-day MA of 79.80, indicating a neutral trend. The MACD of 1.69 indicates Negative momentum. The RSI at 63.19 is Neutral, neither overbought nor oversold. The STOCH value of 96.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TOELY.

Tokyo Electron Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AMAT	82 Outperform	$126.42B	20.36	35.19%	1.03%	4.45%	-10.01%
LRCX	78 Outperform	$96.39B	20.99	53.14%	1.18%	20.33%	31.89%
AMD	76 Outperform	$175.31B	79.26	3.90%	―	21.71%	99.00%
KLAC	74 Outperform	$92.73B	25.48	104.10%	0.90%	20.44%	44.14%
TOELY	68 Neutral	$71.68B	19.91	29.69%	1.55%	26.33%	43.83%
Sector *	60 Neutral	$11.39B	10.50	-6.42%	2.97%	7.77%	-11.17%
INTC	48 Neutral	$96.75B	―	-18.66%	2.33%	-3.97%	-562.40%

* Technology Sector Average

Performance Comparison

TOELY

Tokyo Electron

77.22

-33.85

-30.48%

AMD

Advanced Micro Devices

108.12

-42.44

-28.19%

AMAT

Applied Materials

167.99

-36.91

-18.01%

INTC

Intel

22.18

-8.14

-26.85%

KLAC

KLA

760.47

52.64

7.44%

LRCX

Lam Research

82.25

-7.14

-7.99%

Tokyo Electron Earnings Call Summary

Earnings Call Date:Aug 07, 2025

(Q2-2025)

% Change Since: -9.87%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook with notable achievements in sales growth and strong demand for AI-related technologies. However, challenges such as declining profit margins and reduced sales in the China market tempered the optimism.

Q2-2025 Updates

Positive Updates

Net Sales Increase

Net sales for the second quarter reached JPY 566.5 billion, representing a 2.1% increase from the previous quarter.

Field Solutions Sales Growth

Field solutions sales grew to JPY 139.5 billion, increasing by JPY 21.4 billion due to modifications and increased parts and services sales.

Strong AI Demand

AI server investments accounted for 15% of total WFE spending, growing 1.5x year-over-year, with expectations for further growth.

Upward Revision of Financial Estimates

Full year net sales estimates revised upward to JPY 2.400 trillion, indicating 31% positive growth year-over-year.

Record High Expected for Fiscal 2025

Net sales, gross profit, operating income, and net income are all expected to hit record highs in fiscal 2025.

Share Repurchase Plan

Board of Directors decided to implement a share repurchase of up to JPY 70 billion.

Negative Updates

Gross Profit Margin Decline

Gross profit margin decreased by 1.7 percentage points to 45.9% due to a one-off inventory disposal and changes in product mix.

Operating Income Decline

Operating income fell by 10.6% from the previous quarter to JPY 148.1 billion.

China Market Decline

Proportion of sales to China dropped by 8.6 percentage points to 41.3%, with expectations for further decline to 30% next year.

Income Decreases

Net income attributable to owners of parent decreased by 6.7% from the previous quarter to JPY 117.7 billion.

Company Guidance

During the second quarter earnings call for Tokyo Electron, the company provided comprehensive guidance on its financial performance and market expectations. Net sales for the quarter were JPY 566.5 billion, marking a 2.1% increase from the previous quarter, while operating income fell by 10.6% to JPY 148.1 billion. The gross profit margin decreased by 1.7 percentage points to 45.9%, attributed to a one-off inventory disposal and product mix changes. Despite a decline in net income attributable to owners by 6.7% to JPY 117.7 billion, the company achieved its guidance set in August. Tokyo Electron expects the full fiscal year net sales to reach JPY 2.400 trillion, a 31% year-over-year growth, driven by strong demand in AI-related sectors. The worldwide wafer fabrication equipment (WFE) market is projected to see double-digit growth in 2025, with AI semiconductor tools expected to constitute 40% of the market. Furthermore, the company announced a share repurchase plan of up to JPY 70 billion, reflecting its commitment to capital efficiency and shareholder value.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.