One-glance verdict
Overvalued
$62.68 our estimate vs market $199.58
218% above our estimate, beyond the bull case
Fundamentals snapshot
Tokyo Electron Limited
TOELY · PNK · Technology · Semiconductor Equipment & Materials
Current price
$199.58
52-week range
$66.10 - $249.37
Market cap
$181.48B
Balance sheet
Healthy
313.72x Strong cushion
Net cash $3.09B. 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 0.5% last year.
- Reward Returns 29.3% on equity, ahead of 16% of its peers.
- Risk Stock trades 27823.5% above its 5-year average P/E.
- Risk Insider ownership is only 0.0% (peer median: 0.3%).
What this company does
Tokyo Electron Limited
Tokyo Electron builds and sells the highly specialized, expensive machines that other companies use to manufacture semiconductors (the tiny computer chips that power everything from your phone to your car). The company makes most of its money selling this essential equipment to the world's largest chipmakers. Because nearly all modern electronics rely on these chips, Tokyo Electron's success is closely tied to the growth and health of the entire global technology industry.
How the company got here
Founded in 1963 as a company that imported and sold electronics from other countries, Tokyo Electron quickly saw an opportunity in Japan's growing technology industry. The founders realized that to make advanced electronics like semiconductors (the small chips that power everything from your phone to your car), you first need sophisticated manufacturing equipment. They began by distributing equipment for other companies, learning the technology, and then in the 1970s and 80s, shifted to designing and building their own machines. This decision turned them into a global leader, creating essential tools that are now used to make nearly every semiconductor in the world.
What it actually does
Think of Tokyo Electron as a company that builds the incredibly complex and precise factories that other companies use to make computer chips. These chips, also known as semiconductors, are the brains inside almost all modern electronics. Tokyo Electron doesn't make the chips themselves, but they design, build, and sell the massive, high-tech machines that perform critical steps in the chip-making process. Their equipment is so fundamental that virtually every semiconductor in the world is made using their technology.
Semiconductor Production Equipment (SPE)
This is the heart of Tokyo Electron's business and makes up the vast majority of its sales. This division creates the highly specialized machines that perform some of the most critical steps in manufacturing semiconductors. These steps include coating materials onto silicon wafers (the thin discs that chips are built on), etching microscopic circuits, and cleaning the wafers with extreme precision. Their customers are the big chipmakers like Intel, Samsung, and TSMC, who buy this equipment to build the chips that go into computers, smartphones, and data centers.
Flat Panel Display (FPD) Production Equipment
This is a much smaller part of the company's business. It uses similar technology to the semiconductor division but applies it to making the equipment that produces flat-screen displays for things like TVs, computers, and smartphones. The machines in this segment help create the tiny pixels and circuits on large glass panels that form the screens we look at every day. While important, this business is not the main economic driver for the company compared to its semiconductor equipment segment.
What management is betting on now
The company is heavily focused on creating the next generation of equipment needed for even more powerful and complex computer chips. This includes developing tools for what's known as advanced packaging, a method of combining different chips together to make them work more efficiently. They are also investing in technology to support the creation of new types of transistors (the tiny on-off switches that are the basic building blocks of chips) and memory chips. A key part of their strategy is also what they call 'Digital x Green,' which aims to create semiconductor technology that is not only more powerful but also uses less energy, contributing to a more sustainable society.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $62.68 vs current price $199.58
Our most-likely fair value is $62.68 a share — about 68.6% below today's price of $199.58, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $3.1B - more cash than debt. Interest coverage 313.7x.
Net debt
$-3.09B
Interest coverage
313.72x
Tokyo Electron Limited's profit covers its interest bill about 313.7 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
TOELY
BASELINE
Tokyo Electron Limited
Total debt $0.00 Interest coverage 313.72x This is the baseline the peer rows are being compared against.
Total debt $7.27B Interest coverage 31.49x -90% vs TOELY Carries about 10.0x less debt cushion than TOELY.
Total debt $3.73B Interest coverage 33.11x -89% vs TOELY Carries about 9.5x less debt cushion than TOELY.
Total debt $2.26B Interest coverage 95.53x -70% vs TOELY Carries about 3.3x less debt cushion than TOELY.
Total debt $6.15B Interest coverage 16.59x -95% vs TOELY Carries about 18.9x less debt cushion than TOELY.
Total debt $82.40M Interest coverage 100.59x -68% vs TOELY Carries about 3.1x less debt cushion than TOELY.
What you should know
The case for and against TOELY
3 Rewards
2 Risks
Rewards
-
Revenue grew 0.5% last year.
-
Returns 29.3% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 27823.5% 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)
53.22x
Forward P/E
—
P/B
14.16x
P/S
0.07x
EV/EBITDA
-0.46x
PEG ratio
2.22x
Profitability
How much profit each dollar creates
Gross margin
45.3%
Operating margin
28.9%
Net margin
23.5%
ROE
29.3%
ROA
14.2%
Health
Liquidity and balance-sheet strength
Debt / equity
—
Current ratio
2.70x
Quick ratio
1.52x
Total debt
$0.00
Total cash
$3.09B
Growth
How the business has been compounding
Revenue TTM
$14.92B
Revenue 5Y CAGR
3.4%
EPS TTM
3.75
EPS 5Y CAGR
7.6%
Cash flow
How much cash the business throws off
Operating CF TTM
$3.30B
Free CF TTM
$1.96B
FCF margin
13.1%
Dividend
Shareholder payout
Yield
1.0%
Payout ratio
49.2%
Last ex-div date
2026-03-31