Fact based stock research
Tokyo Electron (TSE:8035)

JP3571400005

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Tokyo Electron stock research in summary

tel.co.jp

ANALYSIS: With an Obermatt Combined Rank of 41 (worse than 59% compared with investment alternatives), Tokyo Electron (Semiconductor Equipment, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Tokyo Electron are low in value (priced high) with a consolidated Value Rank of 36 (worse than 64% of alternatives), show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 41, is a hold recommendation based on Tokyo Electron's financial characteristics. As the company Tokyo Electron's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 36), low growth (Obermatt Growth Rank of 49), and risky financing practices (Obermatt Safety Rank of 28), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	36
Growth Rank	49
Safety Rank	28
Combined Rank	41

Country	Japan
Industry	Semiconductor Equipment
Index	TOPIX 100, Nikkei 225
Size class	XX-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Tokyo Electron

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	78	11	15	36
GROWTH
GROWTH	64	61	47	49
SAFETY
SAFETY	98	97	97	28
SENTIMENT
SENTIMENT	n/a	11	31	^new
360° VIEW
360° VIEW	n/a	19	3	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Tokyo Electron is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	78	11	15	36
GROWTH
GROWTH	64	61	47	49
SAFETY
SAFETY	98	97	97	28
COMBINED
COMBINED	93	55	55	41

Last update of combined financial performance: 4-Jul-2024. Stock analysis on combined financial performance: The higher the rank of Tokyo Electron the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 36 (worse than 64% compared with alternatives), Tokyo Electron shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Tokyo Electron. Price-to-Profit (also referred to as price-earnings, P/E) is 55 which means that the stock price compared with what market professionals expect for future profits is lower than for 55% of comparable companies, indicating a good value concerning Tokyo Electron's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 20, which means that the stock price is lower as regards to invested capital than for 20% of comparable investments. On the other hand, Price-to-Sales is less favorable than 73% of alternatives (only 27% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 50% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 36, is a hold recommendation based on Tokyo Electron's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	53	18	20	27
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	79	25	31	55
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	34	9	17	20
DIVIDEND YIELD
DIVIDEND YIELD	98	38	43	50
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	78	11	15	36

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Tokyo Electron; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Tokyo Electron shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Tokyo Electron. Profit Growth has a rank of 69, which means that currently professionals expect the company to grow its profits more than 69% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 65 (above 65% of alternative investments). But Sales Growth has a below the median rank of 13, which means that, currently, professionals expect the company to grow less than 87% of its competitors, and Capital Growth also has a lower rank of 39. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Tokyo Electron. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	32	28	51	13
PROFIT GROWTH
PROFIT GROWTH	88	50	44	69
CAPITAL GROWTH
CAPITAL GROWTH	n/a	51	24	39
STOCK RETURNS
STOCK RETURNS	80	81	75	65
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	64	61	47	49

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Tokyo Electron.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company Tokyo Electron has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Tokyo Electron is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Tokyo Electron and the other two below average. Leverage is at a rank of 88 meaning the company has a below-average debt-to-equity ratio. It has less debt than 88% of its competitors.Refinancing is at a rank of 27, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 73% of its competitors. Liquidity is at a rank of 11, meaning that the company generates less profit to service its debt than 89% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 28 (worse than 72% compared with alternatives), Tokyo Electron has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Tokyo Electron are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Tokyo Electron and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	66	88	88	88
REFINANCING
REFINANCING	54	21	21	27
LIQUIDITY
LIQUIDITY	100	100	100	11
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	98	97	97	28

Last update of Safety Rank: 4-Jul-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Tokyo Electron and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	58	61	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	48	72	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	30	36	^new
MARKET PULSE
MARKET PULSE	n/a	3	12	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	11	31	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Tokyo Electron.
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