DENSO Corporation (DNZOF)
Fair ValueFundamental
69
Price
$1840.00
Market Cap
$4.81T
Part 1 · What the company is worth
Overview
DENSO makes the components that go inside cars rather than complete vehicles: air-conditioning and thermal-management systems, engine and powertrain parts, electronics, electrification hardware like inverters and motors, and semiconductors. It is headquartered in Japan and supplies carmakers worldwide, with Toyota — also its largest shareholder — as its single biggest customer by a wide margin.
How it makes money
DENSO sells parts as an original-equipment supplier under contracts tied to specific vehicle models, so revenue tracks how many cars carmakers actually build and how much content DENSO wins on each one. Prices are negotiated per component and typically decline over a model's life under automakers' cost-reduction pressure, so DENSO depends on new wins and efficiency gains to protect margins.
What drives demand
CyclicalDENSO's revenue follows global vehicle production, which rises and falls with consumer confidence, credit conditions and automakers' own inventory cycles. Because contracts are tied to specific models, a model's production cut or delay shows up directly in DENSO's results with little lag.
Key risks
- Dependence on Toyota group sales — DENSO discloses that fluctuations in Toyota group sales could materially affect its performance, even though it states it negotiates terms with Toyota group companies on the same basis as with other customers.
- Semiconductor and supply-chain fragility — Recent shortages of automotive semiconductors exposed how dependent DENSO's production is on a resilient global supply chain; a disruption at a chip or raw-material supplier can constrain output across several of its product lines at once.
- Competition in electrification components — As electrification becomes central to vehicle powertrains, DENSO faces rivals such as LG Magna e-Powertrain and CATL in inverters and battery-related systems, an area where it does not hold the same long incumbency it has in traditional components.
Customer concentration
Top customers account for 48.6% of revenue
For the fiscal year ended March 2026, sales to the Toyota group accounted for 48.6% of DENSO's net sales, according to the company's own related-party disclosure. Toyota also holds roughly 22% of DENSO's voting rights.
The case for
Buyers argue that DENSO's decades-long relationships with Toyota and other carmakers give it a stable base of contracted volume, and that its shift toward electrification, safety and semiconductor content lets it grow revenue per vehicle even as overall car production stays flat.
The case against
Sellers fear that near-half dependence on a single customer group leaves DENSO exposed to Toyota's own production decisions, that new electrification rivals lack the cost-down pressure of legacy component businesses, and that a global auto downturn would hit DENSO with little room to diversify away from it.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated on September 18, 2026 with claude-haiku-4-5 — shared with all users
Bosch is the world's largest auto-parts supplier and bids against DENSO for the same carmaker platforms in powertrain control, thermal systems, sensors and electrified drive units.
Aisin is the other large Toyota-group supplier, competing with DENSO for the same Japanese carmakers' business and, through electrified drive units and e-Axles, for the same electrification content per vehicle.
Valeo supplies the same product families as DENSO — thermal and HVAC systems, powertrain electrification, lighting and driver-assistance electronics — to European, Asian and North American automakers.
ZF is a German full-line supplier that competes head-on with DENSO for electric drive units, chassis electronics and ADAS sensor contracts at the same global carmakers.
Hyundai Mobis plays for Hyundai-Kia the role DENSO plays for Toyota, and increasingly bids outside its home group for the same electrification, braking and cockpit-electronics business.
Hanon is the specialist rival in automotive thermal management, competing directly with DENSO's HVAC, heat-pump and battery-cooling systems on electric-vehicle platforms.
Balance Sheet & Liquidity
Revenue
$7.79T
Trailing 12 months to the last reported quarter — estimated from per-share metrics
Net Income
$432.47B
Trailing 12 months to the last reported quarter — estimated from per-share metrics
Free Cash Flow
$76.84B
Total Equity
$5.49T
Total Liabilities
$3.02T
Current Ratio
2.09
Interest Coverage
17.41
Debt/EBITDA
1.32
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$1910.70
Current Price
$1840.00
Margin of Safety
+3.7%
Fair Value Range
$1711.28 - $2110.11
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
11.39
ROE
8.1%
P/B Ratio
0.90
P/FCF
67.23
Gross Margin
15.2%
ROIC
6.5%
Profitability Radar
Value Creation (Economic Moat)
ROIC
6.5%
WACC
7.4%
ROIC − WACC
-0.9 pp
ROIC is roughly in line with the cost of capital — the company is barely covering its capital cost.
Fundamental Analysis Criteria
Passed (18)
- EPS shows upward trend
- EPS CAGR 16.15%
- ROIC 6.5%
- P/B Ratio 0.90
- Debt/Equity ratio
- Operating Margin 6.9%
- Positive Free Cash Flow
- Current Ratio
- Interest Coverage
- Debt/EBITDA
- Price below Graham Number
- ROE 8.3%
- Revenue Growth 5Y 8.8%
- Analyst Consensus 50% Buy
- PEG Ratio 0.38
- Earnings Quality (OCF/NI) 1.15
- Net Margin Trend 5.9% vs 5.9%
- Piotroski F-Score 6/9
Failed (7)
- Price CAGR 4.55%
- Gross Margin 15.2%
- P/FCF 67.23
- CapEx intensity
- DCF valuation (Fairly valued)
- Earnings Surprise avg -12.0%
- Share Dilution 36.9%
Unavailable (3)
- Dividend Payout NaN%
- Return on Tangible Assets
- Low reliance on intangibles
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Issuing new shares, diluting ownership
Institutional Holdings
No institutional filings reported for this company.
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Shinnosuke Hayashi | President, CEO & Director | 61 |
| Mr. Yasushi Matsui | CRO, CCO, Chief Safety & Environment Officer & Representative Director | 61 |
| Mr. Yasuhiko Yamazaki | EVP, Chief Strategy Officer, CHRO & Representative Director | 62 |
| Mr. Seiji Maeda | CFO & Head of Corporate Management Headquarters | - |
| Tadashi Arai | Accounting Manager | - |
| Masanori Sugiura | Operating Exec. Officer & Head of Corporate Legal, IP and Public Affairs Headquarters of Audit Dept. | - |
| Yasuhisa Sakurai | Senior Executive Officer, Head of Sales & Marketing Group of Corporate Strategy Headquarters | - |
| Chitaka Kambe | Senior Executive Officers & Head of General Administration and Human Resources Headquarters | - |
| Mr. Kenichiro Ito | CEO of EU Area & Senior Executive Officer | 63 |
| Mr. Jiro Ebihara | Sr Exec Off, Chief Monozukuri Officer & Head of Purchasing Group, Corp Strategy Headquarters | 61 |
Audit Risk
1
Board Risk
6
Compensation Risk
1
Shareholder Rights Risk
5
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Latest News
Recent headlines for DNZOF, sourced from Markets Gazette.