Kudo Corporation (1764) AI Stock Analysis

• Market Cap: ¥3.61B
• Dividend Yield: 4.09%
• Average Volume (3M): 706.00
• Price to Earnings (P/E): 5.7
• Beta (1Y): 0.32
• Revenue Growth: 14.64%
• EPS Growth: 48.31%
• Country: JP
• Employees: 434
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): N/A
• Shares Outstanding: 1,331,220
• 10 Day Avg. Volume: 860
• 30 Day Avg. Volume: 706
• PEG Ratio: 0.04
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.15
• P/FCF Ratio: -1.33
• 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: 66 Neutral
• Price Target: ¥3,413.00 ▲(17.29% Upside)
• Action: Reiterated Date: 09/11/25
• Date: Action: Reiterated 09/11/25

Kudo Corporation's overall stock score is driven by strong valuation metrics, including a low P/E ratio and high dividend yield, which suggest the stock may be undervalued. However, financial performance is mixed, with strong revenue growth offset by cash flow challenges and increasing leverage. Technical indicators point to bearish momentum, which could impact short-term performance.

Positive Factors

Strong revenue growth

Kudo's 353.21% reported revenue jump in the most recent year indicates meaningful demand expansion and successful scaling. Sustained top-line growth can fund capex, support larger contracts, and enable fixed-cost absorption, strengthening long-term earnings power if execution holds.

Improving profitability and ROE

Improving gross and net margins alongside a rising return on equity point to better operating performance and capital allocation. Durable margin improvement and higher ROE imply management is extracting more value from invested capital, supporting sustainable cash generation as operations scale.

Low equity-market volatility (low beta)

A low beta (~0.32) suggests Kudo's equity is less sensitive to market swings, which can aid long-term planning for project-based engineering and construction work. Lower public-market volatility can reduce refinancing pressure and support steadier access to capital during cycles.

Negative Factors

Negative operating and free cash flows

Persistent negative operating and free cash flows weaken liquidity and constrain the company's ability to self-fund projects or absorb delays. Over months this necessitates external financing, raises refinancing and interest risk, and limits flexibility for strategic investments or dividend stability.

Rising and fluctuating leverage

A recent increase in total debt and fluctuating debt-to-equity indicate growing financial leverage. Higher leverage can amplify earnings volatility, elevate interest burdens, and reduce covenant headroom, making the company more vulnerable to cash-flow shortfalls over the medium term.

Modest EBIT/EBITDA margins

Despite top-line growth and margin improvement at gross/net levels, modest EBIT and EBITDA margins suggest limited operational leverage and potential cost or execution inefficiencies. Structurally lower operating margins leave less buffer against downturns and constrain free cash flow generation.

Kudo Corporation Business Overview & Revenue Model

Company Description

Kudo Corporation engages in the construction business in Japan. The company engages in the consultation, planning, construction, management, and repair of public and private sector projects. It is also involved in the contracting of architecture and civil engineering works; and renovation, real estate, custom built housing, building management, and nursing care business. The company was founded in 1966 and is headquartered in Yokohama, Japan.

How the Company Makes Money

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Kudo Corporation Financial Statement Overview

Summary

Kudo Corporation shows strong revenue growth and improving profitability, but faces challenges with cash flow management and increasing leverage. While the income statement reflects positive trends, the balance sheet and cash flow statements highlight areas that require strategic attention to ensure long-term financial stability.

Income Statement

Kudo Corporation has demonstrated strong revenue growth, particularly in the most recent year with a significant increase of 353.21%. The gross profit and net profit margins have shown improvement over the years, indicating enhanced profitability. However, the EBIT and EBITDA margins are relatively modest, suggesting room for operational efficiency improvements.

Balance Sheet

The company's debt-to-equity ratio has been fluctuating, with a recent increase in total debt, which could pose a risk if not managed properly. The return on equity has improved, reflecting better utilization of equity. However, the equity ratio indicates a moderate level of financial leverage, which requires careful monitoring.

Cash Flow

Kudo Corporation's cash flow situation is concerning, with negative operating and free cash flows in the latest period. The free cash flow growth rate is negative, and the operating cash flow to net income ratio is unfavorable, indicating potential liquidity challenges. The company needs to focus on improving cash generation from operations.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	22.50B	20.52B	19.58B	17.01B	19.80B
Gross Profit	3.15B	2.41B	2.33B	2.12B	2.54B
EBITDA	1.09B	710.41M	674.62M	628.33M	929.28M
Net Income	483.12M	206.76M	135.90M	121.06M	355.71M
Balance Sheet
Total Assets	17.08B	15.63B	14.66B	14.15B	13.60B
Cash, Cash Equivalents and Short-Term Investments	3.21B	4.42B	2.16B	1.74B	2.79B
Total Debt	5.54B	3.80B	4.30B	3.87B	3.40B
Total Liabilities	11.70B	10.80B	9.95B	9.47B	9.21B
Stockholders Equity	5.38B	4.83B	4.71B	4.68B	4.39B
Cash Flow
Free Cash Flow	-2.53B	3.01B	266.13M	-1.22B	1.66B
Operating Cash Flow	-2.13B	3.07B	294.00M	-1.10B	1.74B
Investing Cash Flow	-359.80M	-479.14M	-293.83M	110.03M	-190.06M
Financing Cash Flow	1.25B	-626.40M	245.30M	351.67M	-602.18M

Kudo Corporation Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2910.00
• 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:1764, the sentiment is Neutral. The current price of 2910 is below the 20-day moving average (MA) of 3276.75, below the 50-day MA of 3130.38, and above the 200-day MA of 2837.14, indicating a neutral trend. The MACD of 3.94 indicates Positive momentum. The RSI at 46.73 is Neutral, neither overbought nor oversold. The STOCH value of 48.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:1764.

Kudo Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1841	82 Outperform	¥5.68B	10.43	―	1.88%	-16.60%	-19.91%
1788	78 Outperform	¥3.24B	10.99	―	2.11%	21.66%	385.30%
1443	74 Outperform	¥4.97B	5.08	―	0.46%	0.58%	25.48%
4673	73 Outperform	¥3.61B	6.39	―	1.16%	29.12%	428.78%
7057	73 Outperform	¥3.31B	14.75	―	2.71%	5.85%	―
1764	66 Neutral	¥3.61B	5.72	―	4.09%	14.64%	48.31%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%