Material Group, Inc. (156A) AI Stock Analysis

• Market Cap: ¥8.68B
• Dividend Yield: 3.33%
• Average Volume (3M): 69.62K
• Price to Earnings (P/E): 17.4
• Beta (1Y): 0.49
• Revenue Growth: 19.06%
• EPS Growth: -33.36%
• Country: JP
• Employees: 282
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 19.53
• Shares Outstanding: 9,877,197
• 10 Day Avg. Volume: 60,440
• 30 Day Avg. Volume: 69,620
• PEG Ratio: -0.49
• Price to Book (P/B): 3.62
• Price to Sales (P/S): 1.24
• P/FCF Ratio: 12.03
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 77 Outperform
• Price Target: ¥908.00 ▲(22.37% Upside)
• Action: Reiterated Date: 01/16/26
• Date: Action: Reiterated 01/16/26

The score is driven primarily by solid financial performance (growth, strong gross margin, and improved leverage), partially offset by weakening net margin and softer operating cash flow. Technicals are supportive given the uptrend, but overbought RSI raises short-term risk. Valuation is reasonable with a supportive dividend yield.

Positive Factors

Improved leverage and balance sheet

Material Group's markedly improved debt-to-equity and equity ratios reduce financial leverage and interest burden, lowering default risk. Enhanced balance-sheet flexibility supports sustained capital allocation to R&D, strategic partnerships and dividend capacity across the next several quarters.

Sustainable gross and operating margins

Robust gross margins alongside stable EBIT and EBITDA margins indicate durable pricing power and effective cost control across the product portfolio. Consistent operating profitability underpins reliable cash generation and funds reinvestment into product development and distribution over the medium term.

Strong free cash flow conversion

Despite some decline in operating cash flow, robust free cash flow and high FCF-to-net income conversion provide internal funding for capex, debt reduction and R&D. Reliable FCF reduces dependence on external financing and preserves strategic optionality over multiple quarters.

Negative Factors

Declining net profit margin

A falling net profit margin suggests rising non-operating costs, pricing pressure, or one-time items that erode retained earnings. Persistent margin compression would limit internal funding for growth and dividends and could weaken ROE and resilience through cyclical downswings.

Decreasing operating cash flow

Reduced operating cash flow points to working-capital strain or weaker cash receipts, undermining near-term liquidity coverage. If OCF weakness persists, the firm may need to draw on cash reserves or external financing, complicating supplier and capex execution over the medium term.

Negative EPS growth

Reported EPS contraction of roughly 30.7% signals material earnings deterioration. Sustained negative EPS growth reduces the company's ability to reinvest, pay dividends or shore up equity, and indicates earnings volatility that can constrain long-term strategic initiatives and shareholder returns.

Material Group, Inc. Business Overview & Revenue Model

Company Description

Material Group, Inc. (156A) is a leading provider of innovative materials and solutions primarily serving the construction, manufacturing, and industrial sectors. The company specializes in the development and distribution of high-performance materials, including advanced composites, polymers, and coatings, which are designed to enhance durability and efficiency in various applications. With a strong commitment to sustainability, Material Group, Inc. also focuses on eco-friendly products that meet the evolving needs of its customers while adhering to environmental standards.

How the Company Makes Money

Material Group, Inc. generates revenue through multiple key streams, including the sale of its proprietary materials and products to businesses in the construction and industrial sectors. The company employs a direct sales model, supported by a network of distributors and partners, to reach a broad customer base. Additionally, Material Group, Inc. engages in long-term contracts with major construction firms and manufacturers, providing a steady revenue stream. Strategic partnerships with research institutions and technology companies also enhance its product offerings, enabling the company to pursue innovative solutions that attract new customers and drive sales. Moreover, the firm invests in research and development to continuously improve its existing products and create new, high-demand materials, contributing to its overall profitability.

Material Group, Inc. Financial Statement Overview

Summary

Strong overall fundamentals: revenue grew 5.63% with robust gross margin and stable EBIT/EBITDA margins. Balance sheet leverage improved meaningfully (better debt-to-equity and equity ratio) with strong ROE. Key watchouts are the declining net profit margin and lower operating cash flow/coverage, which slightly temper the score.

Income Statement

Material Group, Inc. has demonstrated strong revenue growth with a 5.63% increase in the latest year, building on previous growth. The gross profit margin remains robust, indicating effective cost management. However, the net profit margin has decreased, suggesting increased expenses or other financial pressures. EBIT and EBITDA margins are stable, reflecting consistent operational efficiency.

Balance Sheet

The company has improved its debt-to-equity ratio significantly, indicating reduced leverage and enhanced financial stability. Return on equity remains strong, showcasing effective use of equity to generate profits. The equity ratio has improved, reflecting a healthier balance between equity and total assets.

Cash Flow

Operating cash flow has decreased, but free cash flow remains strong, suggesting efficient capital expenditure management. The free cash flow to net income ratio is high, indicating good cash conversion. However, the decline in operating cash flow coverage ratio may signal potential liquidity concerns.

Breakdown	Aug 2025	Aug 2024	Aug 2023	Aug 2022
Income Statement
Total Revenue	6.29B	5.28B	4.66B	4.18B
Gross Profit	3.85B	3.19B	2.84B	2.51B
EBITDA	877.53M	915.42M	703.47M	498.72M
Net Income	468.95M	709.63M	437.86M	208.28M
Balance Sheet
Total Assets	3.90B	3.26B	2.64B	2.81B
Cash, Cash Equivalents and Short-Term Investments	1.26B	1.12B	614.87M	851.11M
Total Debt	228.01M	274.18M	374.86M	913.81M
Total Liabilities	1.68B	1.23B	1.21B	1.82B
Stockholders Equity	2.16B	2.03B	1.43B	993.40M
Cash Flow
Free Cash Flow	649.27M	967.55M	485.50M	295.07M
Operating Cash Flow	694.25M	987.20M	535.99M	347.02M
Investing Cash Flow	-58.33M	-176.88M	-211.16M	-53.15M
Financing Cash Flow	-497.27M	-302.58M	-561.06M	-88.97M

Material Group, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 742.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:156A, the sentiment is Positive. The current price of 742 is below the 20-day moving average (MA) of 849.60, below the 50-day MA of 848.50, and below the 200-day MA of 776.54, indicating a bullish trend. The MACD of -0.68 indicates Negative momentum. The RSI at 62.66 is Neutral, neither overbought nor oversold. The STOCH value of 75.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:156A.

Material Group, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2436	80 Outperform	¥8.81B	10.35	―	1.24%	11.42%	29.26%
156A	77 Outperform	¥8.68B	17.43	―	3.33%	19.06%	-33.36%
7068	75 Outperform	¥15.14B	12.05	―	1.27%	7.24%	215.65%
2411	74 Outperform	¥5.77B	12.00	―	4.65%	5.94%	617.63%
7354	72 Outperform	¥16.52B	11.98	―	1.51%	7.96%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6094	50 Neutral	¥13.68B	17.08	―	―	-2.68%	91.68%