NIHON DENGI CO., LTD. (1723) AI Stock Analysis

• Market Cap: ¥197.55B
• Dividend Yield: 1.83%
• Average Volume (3M): 39.50K
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.71
• Revenue Growth: 22.05%
• EPS Growth: 52.10%
• Country: JP
• Employees: 897
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 169.46
• Shares Outstanding: 16,395,000
• 10 Day Avg. Volume: 54,040
• 30 Day Avg. Volume: 39,500
• PEG Ratio: 0.25
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 1.40
• P/FCF Ratio: 7.52
• 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): 502.1
• Revenue Forecast (FY): ¥48.00B

• Rating: 78 Outperform
• Price Target: ¥13,805.00 ▲(174.45% Upside)
• Action: Reiterated Date: 02/13/26
• Date: Action: Reiterated 02/13/26

The score is driven primarily by strong financial performance (profitability, growth, low leverage, and excellent cash flow). Technicals are supportive but tempered by overbought signals (high RSI/Stoch). Valuation is the main constraint given a mid-20s P/E and a modest dividend yield.

Positive Factors

High Profitability

Durable high gross and net margins indicate strong product pricing, manufacturing efficiency and value capture. Sustained margins support reinvestment, buffer cyclical downturns and enable healthy cash returns to stakeholders over the next 2–6 months.

Consistent Revenue Growth

Double-digit revenue growth shows persistent demand expansion and successful market penetration. Continued top-line momentum supports scale economies, product development and margin sustainability, underpinning medium-term earnings resilience.

Strong Cash Generation & Low Leverage

Exceptional free cash flow growth and very low leverage provide financial flexibility for capex, dividends or M&A without balance sheet strain. Strong cash conversion reduces refinancing risk and supports durable investment in growth initiatives.

Negative Factors

Modest Dividend Income

A low dividend yield limits appeal to income-focused investors and reduces the stock's defensive characteristics. Over a 2–6 month horizon, this may constrain investor demand from yield-sensitive pools even if fundamentals remain strong.

Industry Cyclicality

Being in hardware and equipment ties revenue to capex and industrial cycles, which can cause durable demand volatility. Even with strong margins and cash flow, cyclical end-market swings could pressure sales and order timing within months.

Limited Scale & Market Liquidity

A mid-sized workforce and modest average trading volume suggest limited global scale and thinner liquidity. This may constrain rapid market expansion, R&D breadth and investor access, and can make capital raises or large block trades more challenging.

NIHON DENGI CO., LTD. Business Overview & Revenue Model

Company Description

Nihon Dengi Co., Ltd. engages in the automatic control system business in Japan. It operates through two segments, Air Conditioning Instrumentation Related Business and Industrial System Related Business. The Air Conditioning Instrumentation Related Business segment is involved in the design and construction of automatic air conditioning control system for non-residential buildings, including office buildings, factories, hospitals, laboratories, schools, and commercial facilities, as well as maintenance and inspection after construction. This segment sells equipment for automatic control of air conditioning, such as automatic control panels, sensors, and thermostats. The Industrial System Related Business segment handles instrumentation work and automatic control work for factories and transport lines, including food factories, installation, maintenance, and production management of various FA machines centered on industrial robots. This segment also sells control equipment, such as regulators, flow meters, and industrial valves. Nihon Dengi Co., Ltd. was incorporated in 1959 and is headquartered in Tokyo, Japan.

How the Company Makes Money

NIHON DENGI generates revenue primarily through the sale of its semiconductor products and electronic components to manufacturers in various industries. The company operates on a business model that includes both direct sales and partnerships with distributors and OEMs (original equipment manufacturers). Key revenue streams come from bulk orders for integrated circuits and sensors, as well as ongoing contracts with large corporations in the automotive and consumer electronics sectors. Additionally, NIHON DENGI invests in research and development to create innovative products that meet the evolving needs of technology markets, further enhancing its profitability through advanced product offerings and potential licensing agreements.

NIHON DENGI CO., LTD. Financial Statement Overview

Summary

Strong overall fundamentals: rising profitability (2025 gross margin 43.3%, net margin 14.9%), solid growth (revenue +10.7% YoY), very low leverage (debt-to-equity 0.01), and excellent cash generation (free cash flow +98.4% YoY; strong cash conversion with OCF/NI 1.27 and FCF/NI 1.25).

Income Statement

The company demonstrates strong profitability with a consistent increase in gross profit and net profit margins over the past five years. Notably, the gross profit margin is 43.3% and the net profit margin is 14.9% for 2025. Revenue growth is substantial at 10.7% from 2024 to 2025, indicating robust business expansion. EBIT and EBITDA margins are healthy, reflecting efficient operational management.

Balance Sheet

The balance sheet is stable with a low debt-to-equity ratio of 0.01, indicating minimal leverage and a strong equity base. The return on equity (ROE) is impressive at 16.2%, showcasing effective use of equity to generate profits. The equity ratio is 74.7%, underscoring the company's strong capital structure and low financial risk.

Cash Flow

The cash flow statement reflects excellent cash generation, with a significant increase in free cash flow by 98.4% from 2024 to 2025. The operating cash flow to net income ratio of 1.27 and the free cash flow to net income ratio of 1.25 indicate strong cash conversion and effective cash management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	44.93B	43.06B	38.89B	34.31B	31.67B	34.08B
Gross Profit	19.65B	18.66B	14.54B	11.60B	10.72B	11.30B
EBITDA	10.26B	9.57B	6.66B	4.89B	4.47B	4.82B
Net Income	6.78B	6.41B	4.67B	3.17B	3.03B	3.32B
Balance Sheet
Total Assets	48.55B	52.89B	46.02B	43.29B	38.57B	37.63B
Cash, Cash Equivalents and Short-Term Investments	14.00B	15.54B	11.83B	11.48B	11.55B	12.51B
Total Debt	752.00M	543.00M	658.00M	343.00M	314.00M	383.00M
Total Liabilities	8.81B	13.39B	11.56B	12.21B	9.71B	10.97B
Stockholders Equity	39.74B	39.49B	34.46B	31.08B	28.86B	26.66B
Cash Flow
Free Cash Flow	0.00	8.01B	4.04B	3.31B	1.24B	3.76B
Operating Cash Flow	0.00	8.13B	4.27B	3.52B	1.36B	4.10B
Investing Cash Flow	0.00	-4.28B	-2.12B	-2.20B	-1.44B	-2.38B
Financing Cash Flow	0.00	-1.64B	-2.11B	-989.00M	-1.07B	-1.02B

NIHON DENGI CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5030.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1723, the sentiment is Positive. The current price of 5030 is below the 20-day moving average (MA) of 11570.00, below the 50-day MA of 9969.00, and below the 200-day MA of 6380.56, indicating a bullish trend. The MACD of 525.15 indicates Positive momentum. The RSI at 68.59 is Neutral, neither overbought nor oversold. The STOCH value of 79.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1723.

NIHON DENGI CO., LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6850	80 Outperform	¥31.93B	16.29	―	2.89%	6.15%	2.98%
7745	80 Outperform	¥77.15B	13.18	―	2.31%	6.50%	30.54%
6866	79 Outperform	¥106.31B	19.22	―	3.23%	7.28%	4.16%
1723	78 Outperform	¥197.55B	23.73	―	1.83%	22.05%	52.10%
6874	72 Outperform	¥24.58B	10.85	―	2.84%	8.78%	16.25%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6858	59 Neutral	¥10.30B	24.74	―	2.45%	15.66%	-69.17%

NIHON DENGI CO., LTD. Corporate Events

Nihon Dengi Lifts Earnings and Dividend Outlook on Strong Nine-Month Results

Nihon Dengi Co., Ltd. reported robust results for the nine months ended 31 December 2025, with net sales rising 14.1% year on year to ¥29.87 billion and profit attributable to owners of the parent jumping 45.4% to ¥5.67 billion, driving basic earnings per share to ¥355.81 after a 2-for-1 stock split. The company also strengthened its balance sheet, lifting its equity ratio to 80.6%, and revised upward both its full‑year earnings and dividend forecasts for the year ending 31 March 2026, now targeting ¥46.0 billion in net sales and ¥8.07 billion in profit attributable to owners of the parent while planning a total annual dividend of ¥152 per share, signalling confidence in sustained earnings growth and an increasing return of profits to shareholders.

The most recent analyst rating on (JP:1723) stock is a Buy with a Yen10294.00 price target. To see the full list of analyst forecasts on NIHON DENGI CO., LTD. stock, see the JP:1723 Stock Forecast page.