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Hitachi Ltd (HTHIY)
OTHER OTC:HTHIY
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Hitachi
(OTC:HTHIY)
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Rating:76Outperform
Price Target:
$38.00
â–²(22.82% Upside)
The score is driven primarily by stronger financial quality—improving margins, low leverage, and robust free cash flow—supported by a technically positive trend. It is held back by a relatively high P/E with a low dividend yield, and a mixed earnings-call backdrop where raised guidance is offset by affiliate losses and competitive pressures.
Positive Factors
Free Cash Flow Generation
Hitachi's very strong trailing‑12‑month free cash flow (~¥1.41T) and high conversion ratio provide durable internal funding for capex, M&A, dividends and debt paydown. Persistent FCF strength supports strategic investments (AI, GEM) and financial flexibility across cycles.
Margin Improvement
Substantial improvement in EBIT and net margins versus earlier years indicates better operational leverage and higher‑quality earnings. Sustained margin expansion, driven by higher‑margin DSS/GEM segments and cost discipline, enhances long‑term cash generation and return on capital.
Diversified Business Model
Hitachi's multi‑segment exposure (IT services, social infrastructure, materials) and long‑term government/private social‑infra contracts reduce cyclicality and concentration risk. Diversification enables cross‑sell, stable backlog, and resilience amid sector shifts like digital transformation and electrification.
Negative Factors
Uneven Revenue Growth
Top‑line growth has been inconsistent—strong in FY2023 but softer in FY2024–FY2025 and low single‑digit in the TTM—limiting the sustainability of earnings gains. Reliance on margin gains over reliable organic revenue expansion could constrain long‑term EPS trajectories.
Equity Losses from Affiliates
Material equity losses at affiliates (Hitachi Astemo) reduced consolidated EBITA, highlighting earnings volatility from investments outside core operations. Persistent affiliate underperformance can offset operating improvements and complicate forecasting and capital allocation decisions.
Historical Variability in Leverage and Cash Flow
Although current leverage is conservative (~0.20 D/E) and FCF strong, past swings in debt and cash conversion signal sensitivity to cycle and project timing. This variability raises execution risk for large projects and could reintroduce balance‑sheet pressure in downturns.
Hitachi (HTHIY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$158.25B
Dividend Yield0.77%
Average Volume (3M)29.95K
Price to Earnings (P/E)28.7
Beta (1Y)1.36
Revenue Growth8.28%
EPS Growth21.01%
CountryUS
Employees268,655
SectorIndustrials
Sector Strength72
IndustryConglomerates
Share Statistics
EPS (TTM)0.24
Shares Outstanding4,581,561,000
10 Day Avg. Volume30,860
30 Day Avg. Volume29,948
Financial Highlights & Ratios
PEG Ratio2.40
Price to Book (P/B)1.38
Price to Sales (P/S)0.83
P/FCF Ratio8.74
Enterprise Value/Market Cap152.37
Enterprise Value/Revenue2.97
Enterprise Value/Gross Profit9.96
Enterprise Value/Ebitda17.49
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Hitachi Business Overview & Revenue Model
Company DescriptionHitachi Ltd. is a multinational conglomerate based in Japan, operating across various sectors including information technology, social infrastructure, high functional materials & components, and more. The company is known for its diverse range of products and services, including IT services, cloud computing, power systems, industrial machinery, and consumer electronics. Hitachi aims to contribute to society through its innovative technologies and solutions, focusing on sustainable development and enhancing customer value across its sectors.
How the Company Makes MoneyHitachi generates revenue through multiple key streams, primarily from IT services, social infrastructure projects, and high functional materials. The IT Services segment, which includes system integration and consulting, is a significant contributor, capitalizing on the increasing demand for digital transformation. The social infrastructure sector involves large-scale projects such as transportation systems and energy solutions, where Hitachi partners with governments and private entities, ensuring long-term contracts and steady income. Additionally, the high functional materials & components sector provides advanced materials for various industries, further diversifying revenue sources. Strategic partnerships with leading technology firms enhance their offerings, driving sales and fostering innovation, while a focus on sustainability and smart technology solutions attracts investment and customer interest, boosting overall earnings.
Hitachi Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong revenue growth and strategic advancements in AI and energy sectors, but challenges remain in the form of equity losses in affiliates and competitive pressures in specific business areas.Q2-2025 Updates
Positive Updates
Revenue and Profit Growth
Hitachi achieved an 11% year-on-year increase in revenue and a 23% increase in adjusted EBITA in Q2 FY 2024, driven by strong performance in DSS and GEM sectors.
Upward Revision in FY 2024 Forecast
Due to strong demand in the GEM sector, Hitachi has revised its revenue forecast upwards by JPY 150 billion and adjusted EBITA by JPY 19.5 billion.
Strong Order Growth in GEM
Orders in the GEM sector increased by 42% year-on-year, with significant contributions from railway BU and Hitachi Energy.
Strategic Partnerships and AI Investments
Hitachi is expanding its strategic partnerships, such as with Singtel, and investing JPY 300 billion in generative AI, focusing on infrastructure development and service engineering.
Increased Interim Dividend
Hitachi announced a 10% increase in dividends, representing a 31% year-on-year increase from the previous year's interim dividend.
Negative Updates
Equity Loss in Hitachi Astemo
Hitachi reported a decline in consolidated EBITA by JPY 22.1 billion year-on-year due to deterioration in equity in profit of affiliates, particularly Hitachi Astemo.
Challenges in Storage Business
The DSS segment's storage business experienced a decline due to intensified competition and a shift in projects, impacting profitability.
Impact of Foreign Exchange and Project Delays
Hitachi Energy's Q2 performance was affected by foreign exchange rates and project delays, resulting in fluctuations in revenue and profitability.
Company Guidance
The guidance provided during Hitachi Limited's Q2 FY 2024 web conference highlighted several key financial metrics. The company reported an 11% year-on-year increase in revenues, driven primarily by growth in the GEM (Green Energy and Mobility) and DSS (Digital Systems and Services) sectors. Adjusted EBITA rose by 23% year-on-year, with the adjusted EBITA margin improving by 1 percentage point to 10.7%. Net income attributable to Hitachi was reported at JPY 116.9 billion. Despite an increase in adjusted EBITA for the three sectors, consolidated EBITA decreased by JPY 22.1 billion due to a deterioration in equity profit from affiliates, notably Hitachi Astemo. Core free cash flow increased to JPY 97.6 billion. The fiscal year 2024 outlook was optimistic, with a revised revenue forecast up by JPY 150 billion and adjusted EBITA up by JPY 19.5 billion. Core free cash flow is expected to reach JPY 1.5 trillion, exceeding the medium-term target by JPY 300 billion. The company is also anticipating a 7% year-on-year increase in revenues and a 23% year-on-year rise in adjusted EBITA for FY 2024, with the adjusted EBITA margin projected to improve by 1.5 percentage points to 11.5%.Hitachi Financial Statement Overview
Summary
Improving profitability (net margin up to ~6–8% and EBIT margin ~10–12%), conservative current leverage (debt-to-equity ~0.20), and very strong TTM free cash flow (~¥1.41T) with solid conversion. The main offset is uneven and recently modest revenue growth, plus some historical volatility in cash flow and leverage.Income Statement
Profitability has improved meaningfully: net margin rose from ~1.0% (FY2021) to ~6–8% (FY2024–FY2025 and TTM (Trailing-Twelve-Months)), alongside stronger operating profitability (EBIT margin now ~10–12% vs. ~6–8% earlier). Revenue growth has been uneven—strong in FY2023, softer in FY2024–FY2025 and low-single-digit in TTM—so the story is more margin/earnings quality than consistent top-line acceleration. Overall, solid and improving earnings power, tempered by modest recent growth.78
Positive
Balance Sheet
Leverage looks conservative today: debt-to-equity is ~0.20 in FY2025 and TTM (Trailing-Twelve-Months), a sharp improvement from the higher leverage levels seen in FY2022–FY2023. Equity has also grown over time, supporting balance-sheet resilience. Returns on equity are healthy (roughly ~10–14% across FY2022–TTM), suggesting the company is generating solid profits relative to shareholder capital. The main watch item is that balance-sheet leverage has moved around historically, indicating potential variability in capital structure over cycles.82
Very Positive
Cash Flow
Cash generation is a clear strength: free cash flow has expanded materially from FY2022–FY2025 and is very strong in TTM (Trailing-Twelve-Months) (about ¥1.41T). Free cash flow has generally been well-supported by earnings (free cash flow running at ~0.79–0.82 of net income in FY2025/TTM vs. weaker conversion in earlier years). Growth in free cash flow is positive in the latest periods, though it was volatile historically (including a decline in FY2023). Overall, strong current cash-producing capacity with some past variability.85
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2023 | Dec 2023 | Dec 2023 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.12T | 9.78T | 9.73T | 9.73T | 9.73T | 9.73T |
| Gross Profit | 2.42T | 2.82T | 2.58T | 2.58T | 2.58T | 2.58T |
| EBITDA | 1.38T | 1.44T | 1.35T | 1.35T | 1.35T | 1.35T |
| Net Income | 640.51B | 615.72B | 589.90B | 589.90B | 589.90B | 589.90B |
Balance Sheet | ||||||
| Total Assets | 14.69T | 13.28T | 12.22T | 12.22T | 12.22T | 12.22T |
| Cash, Cash Equivalents and Short-Term Investments | 1.13T | 866.24B | 1.04T | 1.04T | 1.04T | 1.04T |
| Total Debt | 1.06T | 1.21T | 1.18T | 1.18T | 1.18T | 1.18T |
| Total Liabilities | 8.14T | 7.25T | 6.36T | 6.36T | 6.36T | 6.36T |
| Stockholders Equity | 6.36T | 5.85T | 5.70T | 5.70T | 5.70T | 5.70T |
Cash Flow | ||||||
| Free Cash Flow | 1.41T | 925.39B | 571.47B | 571.47B | 571.47B | 571.47B |
| Operating Cash Flow | 1.74T | 1.17T | 956.61B | 956.61B | 956.61B | 956.61B |
| Investing Cash Flow | -293.02B | -530.10B | -131.54B | -131.54B | -131.54B | -131.54B |
| Financing Cash Flow | -1.39T | -467.68B | -1.02T | -1.02T | -1.02T | -1.02T |
Hitachi Technical Analysis
Positive
30.94
Price Trends
32.05
Positive
30.89
Positive
29.22
Positive
Market Momentum
0.45
Negative
64.42
Neutral
66.34
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTHIY, the sentiment is Positive. The current price of 30.94 is below the 20-day moving average (MA) of 33.19, below the 50-day MA of 32.05, and above the 200-day MA of 29.22, indicating a bullish trend. The MACD of 0.45 indicates Negative momentum. The RSI at 64.42 is Neutral, neither overbought nor oversold. The STOCH value of 66.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HTHIY.
Hitachi Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $158.25B | 28.67 | 10.93% | 0.77% | 8.28% | 21.01% | |
71 Outperform | $144.45B | 28.48 | 30.28% | 2.24% | 7.48% | 9.55% | |
71 Outperform | $8.78B | 38.34 | 14.90% | 0.63% | 1.23% | -22.77% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
53 Neutral | $81.36B | 25.53 | 75.68% | 1.82% | -13.09% | -20.63% |
* Industrials Sector Average
HTHIY
Hitachi
34.75
9.75
39.00%
MMM
3M
153.16
5.90
4.01%
HON
Honeywell International
227.52
22.45
10.95%
VMI
Valmont
445.56
123.63
38.40%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.