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Sony Group (SONY)
NYSE:SONY
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Sony Group
(NYSE:SONY)79Outperform
Positive Factors
Financial Performance
Sony reported results that beat both analyst and consensus estimates on top and bottom lines.
Gaming and Music Segments
Gaming and Music segments significantly outperformed, with Gaming & Network Services revenue up 16% and Music up 14% year-over-year.
Negative Factors
Revenue Estimates
The revenue estimates for FY24 show a 3% year-over-year decline, which may raise concerns about Sony's sales performance.
Sony Group (SONY) vs. S&P 500 (SPY)
Market Cap
$147.86B
Dividend Yield0.37%
Average Volume (3M)4.06M
Price to Earnings (P/E)19.6
Beta (1Y)1.24
Revenue Growth1.77%
EPS Growth18.85%
CountryUS
Employees113,000
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)1.23
Shares Outstanding6,149,810,500
10 Day Avg. Volume3,770,204
30 Day Avg. Volume4,058,472
Financial Highlights & Ratios
PEG Ratio1.04
Price to Book (P/B)N/A
Price to Sales (P/S)1.75
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$30.50Price Target Upside26.19% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Sony Group Business Overview & Revenue Model
Company DescriptionFounded in 1946, Tokyo, Japan-based Sony Corp. manufactures and sells electronic equipment, instruments, devices, game consoles, and information technology products for consumers, professionals and industrial markets across the world. The company also produces and distributes music, pictures, computer entertainment, and online businesses. It generates revenues from the following operating segments: Game & Network Services, Music, Pictures, Electronics Products & Solutions, Imaging & Sensing Solutions, Financial Services, and All Others.
How the Company Makes MoneySony Group Corporation generates revenue through several key streams. The electronics segment, which includes products such as TVs, audio equipment, and digital cameras, contributes significantly to its income. The gaming and network services segment, primarily driven by the PlayStation brand, is a major revenue source, benefiting from hardware sales, software sales, and subscription services like PlayStation Plus. Sony's entertainment division encompasses Sony Pictures and Sony Music, which earn through movie and music production, distribution, and licensing. Financial services, provided by Sony Financial Holdings, add to the revenue through insurance premiums, banking, and credit card services. Strategic partnerships and intellectual property licensing further enhance Sony's revenue capabilities.
Sony Group Financial Statement Overview
Summary
Sony Group's financial health is strong, with robust revenue growth and profitability. Efficient cost management and operational efficiency are reflected in healthy margins and a solid balance sheet. Positive cash flow trends indicate potential for reinvestment and returns to shareholders. Careful management of debt levels is recommended to maintain stability.Income Statement
Sony Group has demonstrated solid revenue growth, with a significant increase from the previous year. The gross profit margin remains robust, reflecting efficient cost management. Net profit margins have improved, indicating strong profitability. EBIT and EBITDA margins are healthy, showcasing operational efficiency.85
Very Positive
Balance Sheet
Sony Group's balance sheet is strong, with a manageable debt-to-equity ratio and a healthy return on equity. The equity ratio indicates a solid capital structure, with a good proportion of assets financed by shareholder equity. The company's leverage is under control, reducing financial risk.80
Positive
Cash Flow
Sony Group exhibits positive cash flow trends, with substantial free cash flow growth. Operating cash flow to net income ratio is strong, highlighting effective cash conversion from earnings. Free cash flow to net income ratio is healthy, indicating potential for reinvestment and returns to shareholders.78
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 13.81T | 13.02T | 11.54T | 9.92T | 9.00T | 8.26T | Gross Profit |
| 3.67T | 3.33T | 3.14T | 2.70T | 2.44T | 2.33T | EBIT |
| 1.42T | 1.21T | 1.21T | 1.20T | 971.87B | 845.46B | EBITDA |
| 2.68T | 2.45T | 2.31T | 2.06T | 1.64T | 1.56T | Net Income Common Stockholders |
| 1.13T | 970.57B | 1.01T | 882.18B | 1.03T | 582.19B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.33T | 2.33T | 1.92T | 2.56T | 4.69T | 3.36T | Total Assets |
| 34.11T | 34.11T | 32.04T | 30.48T | 26.35T | 23.04T | Total Debt |
| 4.09T | 4.09T | 4.06T | 3.35T | 2.46T | 1.86T | Net Debt |
| 2.18T | 2.18T | 2.58T | 1.30T | 669.50B | 346.37B | Total Liabilities |
| 26.35T | 26.35T | 24.75T | 23.28T | 20.73T | 18.24T | Stockholders Equity |
| 7.59T | 7.59T | 7.23T | 7.14T | 5.58T | 4.13T |
| Cash Flow | Free Cash Flow | ||||
| 3.18T | 749.27B | -298.94B | 792.55B | 837.91B | 909.98B | Operating Cash Flow |
| 3.89T | 1.37T | 314.69B | 1.23T | 1.35T | 1.35T | Investing Cash Flow |
| -977.10B | -818.89B | -1.05T | -728.78B | -1.78T | -1.35T | Financing Cash Flow |
| -722.49B | -210.71B | 84.30B | -336.58B | 666.97B | 65.66B |
Sony Group Technical Analysis
Positive
24.17
Price Trends
22.20
Positive
20.72
Positive
19.21
Positive
Market Momentum
0.83
Positive
57.12
Neutral
27.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SONY, the sentiment is Positive. The current price of 24.17 is above the 20-day moving average (MA) of 23.91, above the 50-day MA of 22.20, and above the 200-day MA of 19.21, indicating a bullish trend. The MACD of 0.83 indicates Positive momentum. The RSI at 57.12 is Neutral, neither overbought nor oversold. The STOCH value of 27.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SONY.
Sony Group Risk Analysis
Sony Group disclosed 23 risk factors in its most recent earnings report. Sony Group reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sony Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.89T | 31.30 | 30.64% | 0.81% | 15.04% | 12.38% | |
79 Outperform | $147.86B | 19.60 | 13.84% | 0.37% | 1.77% | 18.85% | |
76 Outperform | $3.54T | 37.51 | 144.03% | 0.53% | 2.61% | -2.14% | |
72 Outperform | $197.07B | 35.40 | 5.51% | 0.84% | 3.97% | 89.53% | |
66 Neutral | $33.68B | 32.88 | 14.15% | 0.59% | -2.99% | -0.46% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
SONY
Sony Group
24.17
6.91
40.03%
AAPL
Apple
235.93
67.61
40.17%
EA
Electronic Arts
131.82
-2.98
-2.21%
MSFT
Microsoft
388.61
-10.43
-2.61%
DIS
Walt Disney
109.01
-0.06
-0.06%
NTDOY
Nintendo Co
18.40
4.68
34.11%
Sony Group Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: 10.01% | Next Earnings Date: Apr 25, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Sony's robust financial performance, particularly in the Games and Network Services and Music segments, where record-breaking revenues and user engagement were noted. However, challenges in the Pictures and ET&S segments, along with a decline in operating income in Financial Services, indicate areas that require attention. Overall, the call reflects a strong performance with some areas needing strategic focus.Highlights
Record-Breaking Financial Performance
Consolidated sales excluding the financial services segment increased by 7% year-on-year, reaching ¥3,695.7 trillion, while operating income increased 10% to ¥423 billion. Including the financial services segment, sales increased 18% year-on-year to ¥4,409.6 trillion, with operating income reaching a record high for the third quarter at ¥469.3 billion.
Games and Network Services Growth
Sales for the Games and Network Services segment increased 16% year-on-year to ¥1,682.3 billion, with operating income increasing 37% to ¥118.1 billion, marking a record high for the third quarter. The number of monthly active users on PlayStation platforms increased by 5% year-on-year, reaching 129 million accounts, the highest in PS history.
Music Segment Performance
Music segment sales increased 14% year-on-year to ¥481.7 billion, with operating income increasing 28% to ¥97.4 billion. Streaming revenues increased 9% year-on-year on a U.S. dollar basis.
Strategic Alliances and Acquisitions
Sony became the largest shareholder of Kadokawa through a capital and business alliance, aiming to create new value by combining Kadokawa's strengths in creating original IP with Sony's technologies and global expansion capabilities.
Lowlights
Pictures Segment Challenges
While sales for the Pictures segment increased 9% year-on-year, operating income decreased 18% due to increased marketing costs and impacts from strikes, such as the postponement of theatrical releases.
ET&S Segment Sales Decline
Sales for the ET&S segment decreased 4% year-on-year to ¥704.5 billion, primarily due to a decrease in unit sales of televisions. The full year forecast remains unchanged despite these challenges.
Financial Services Segment Operating Income Decline
Operating income for the financial services segment decreased by ¥30.9 billion year-on-year to ¥46.4 billion. This was primarily due to the absence of significant gains related to market fluctuations recorded in the previous fiscal year.
Company Guidance
During the Sony Group Corporation fiscal year 2024 third quarter earnings call, several key financial metrics were discussed. Consolidated sales excluding the financial services segment increased by 7% year-on-year to ¥3,695.7 trillion, while operating income rose 10% to ¥423 billion. Including the financial services segment, consolidated sales saw an 18% increase year-on-year, reaching ¥4,409.6 trillion, with operating income increasing by 1% to ¥469.3 billion, marking a record high for the third quarter. The company revised its full-year forecast, with consolidated sales expected to reach ¥13.200 trillion, a 4% increase from the previous forecast, and operating income revised upward by 2% to ¥335 billion. Additionally, the PlayStation segment showed strong performance, with a 16% increase in sales year-on-year to ¥1,682.3 billion and a 37% rise in operating income to ¥118.1 billion. The Music segment also experienced growth, with sales increasing 14% to ¥481.7 billion and operating income rising 28% to ¥97.4 billion. The company's financial services revenue for the quarter increased by ¥406.7 billion year-on-year to ¥718.5 billion.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.