One-glance verdict
Overvalued
$108.74 our estimate vs market $194.58
79% above our estimate, beyond the bull case
Fundamentals snapshot
Advantest Corporation
ATEYY · PNK · Technology · Semiconductor Equipment & Materials
Current price
$194.58
52-week range
$92.56 - $240.89
Market cap
$140.48B
Balance sheet
Healthy
181.23x Strong cushion
Net cash $1.97B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 44.7% last year.
- Reward Returns 56.9% on equity, ahead of 50% of its peers.
- Risk Stock trades 20582.7% above its 5-year average P/E.
- Risk Insider ownership is only 0.0% (peer median: 0.3%).
What this company does
Advantest Corporation
Advantest builds the complex machinery that tests computer chips, making sure they work correctly before being put into products like your phone, car, or computer. The company makes its money selling this essential quality-control equipment to the world's largest chipmakers. As technology like AI demands more powerful and reliable chips, Advantest's role becomes even more critical within the semiconductor supply chain (the network of businesses involved in creating and distributing a final product).
How the company got here
Founded in Japan in 1954 as Takeda Riken Industry, the company started by making electronic measuring instruments. It entered the semiconductor testing business in 1972, a pivotal move that defined its future. To reflect its focus on advanced test technology, the company changed its name to Advantest Corporation in 1985. Through strategic global expansion and acquisitions, such as Verigy in 2011, Advantest grew into a worldwide leader in its field. Today, over 90% of its sales come from outside Japan, serving the biggest names in the semiconductor industry.
What it actually does
Advantest makes highly advanced machines that test semiconductors, which are the tiny electronic chips inside everything from your smartphone and computer to your car and home appliances. These machines perform a critical quality control step, making sure each chip works perfectly before it gets put into a final product. Think of them as the ultimate inspectors on the chip production line, checking for any tiny flaws or performance issues. The company provides a complete solution for chipmakers, including the equipment that handles the chips during testing and the software that analyzes the test results.
Semiconductor and Component Test Systems
This is Advantest's largest and most important business, generating the vast majority of its revenue. It builds and sells Automatic Test Equipment (ATE), which are sophisticated systems that test the performance and quality of different types of chips, like memory chips and SoCs (System-on-a-Chip, the main processor in a smartphone). The customers are the big semiconductor manufacturers themselves, such as chip designers, foundries (factories that make chips for other companies), and companies that assemble and test chips. As chips become more complex, especially those used for artificial intelligence (AI), the demand for this advanced testing equipment grows significantly.
Mechatronics Systems
This segment provides the physical machinery that works alongside the main testing systems. It includes products like test handlers, which are robotic systems that pick up individual semiconductor devices and place them into the tester for inspection. It also creates the device interfaces, which are the precise connectors and sockets that link the chip to the testing machine. These components are crucial for the whole testing process to be fast, accurate, and efficient, especially when dealing with millions of tiny, delicate chips. The same semiconductor manufacturers who buy the main test systems also purchase these mechatronics products.
Services, Support, and Others
This part of the business focuses on supporting customers who have already bought Advantest's equipment. This includes installation, maintenance, and providing spare parts to keep the complex testing machines running smoothly. They also offer software solutions, like Advantest Cloud Solutions™, which help customers analyze the massive amounts of data generated during testing to improve their manufacturing process. This segment provides a steady, recurring stream of revenue (money that comes in regularly from ongoing services) for the company, complementing the sales of new equipment.
What management is betting on now
Advantest's main focus is on the explosive growth in artificial intelligence (AI) and high-performance computing (HPC). As AI technologies become more widespread, the demand for more powerful and complex semiconductors skyrockets, and these advanced chips require more rigorous testing, which directly benefits Advantest. The company is expanding its production capacity to meet this surging demand from major chipmakers. Management is also focused on expanding into related areas, providing more comprehensive and integrated test solutions that cover more of the semiconductor value chain (the entire process from chip design to the final product).
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $108.74 vs current price $194.58
Our most-likely fair value is $108.74 a share — about 44.1% below today's price of $194.58, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $2.0B - more cash than debt. Interest coverage 181.2x.
Net debt
$-1.97B
Interest coverage
181.23x
Advantest Corporation's profit covers its interest bill about 181.2 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
ATEYY
BASELINE
Advantest Corporation
Total debt $697.28M Interest coverage 181.23x This is the baseline the peer rows are being compared against.
Total debt $100.13M Interest coverage 100.59x -45% vs ATEYY Carries about 1.8x less debt cushion than ATEYY.
Total debt $6.15B Interest coverage 19.90x -89% vs ATEYY Carries about 9.1x less debt cushion than ATEYY.
Total debt $7.35B Interest coverage 31.49x -83% vs ATEYY Carries about 5.8x less debt cushion than ATEYY.
Total debt $4.12B Interest coverage 52.27x -71% vs ATEYY Carries about 3.5x less debt cushion than ATEYY.
Total debt $2.77B Interest coverage 9.12x -95% vs ATEYY Carries about 19.9x less debt cushion than ATEYY.
What you should know
The case for and against ATEYY
3 Rewards
2 Risks
Rewards
-
Revenue grew 44.7% last year.
-
Returns 56.9% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 20582.7% above its 5-year average P/E.
-
Insider ownership is only 0.0% (peer median: 0.3%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
58.43x
Forward P/E
—
P/B
20.74x
P/S
0.11x
EV/EBITDA
-0.28x
PEG ratio
1.39x
Profitability
How much profit each dollar creates
Gross margin
65.7%
Operating margin
51.7%
Net margin
37.3%
ROE
56.9%
ROA
29.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.10x
Current ratio
2.67x
Quick ratio
1.77x
Total debt
$697.28M
Total cash
$2.66B
Growth
How the business has been compounding
Revenue TTM
$7.94B
Revenue 5Y CAGR
26.3%
EPS TTM
3.33
EPS 5Y CAGR
43.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$2.16B
Free CF TTM
$1.93B
FCF margin
24.3%
Dividend
Shareholder payout
Yield
0.2%
Payout ratio
11.1%
Last ex-div date
2026-03-30