Sumiken Mitsui Road Co., Ltd. (1776) AI Stock Analysis

• Market Cap: ¥18.21B
• Dividend Yield: 2.54%
• Average Volume (3M): 9.88K
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.17
• Revenue Growth: 5.89%
• EPS Growth: -30.27%
• Country: JP
• Employees: 429
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): N/A
• Shares Outstanding: 9,277,500
• 10 Day Avg. Volume: 10,120
• 30 Day Avg. Volume: 9,883
• PEG Ratio: -1.02
• Price to Book (P/B): 0.90
• Price to Sales (P/S): 0.41
• P/FCF Ratio: -3.44
• 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: 60 Neutral
• Price Target: ¥2,092.00 ▲(27.64% Upside)
• Action: Reiterated Date: 03/12/26
• Date: Action: Reiterated 03/12/26

The score is primarily constrained by weakening profitability and a sharp deterioration in free cash flow, despite a strong, low-leverage balance sheet. Technicals are supportive with price above key moving averages and a positive MACD, but RSI indicates the stock is overbought. Valuation is reasonable (mid-teens P/E) with a modest dividend yield.

Positive Factors

Strong equity ratio

A 55.2% equity ratio signals a structurally strong capital base, enabling the company to absorb cyclical downturns, sustain operations without emergency financing, and fund selective investments. Over 2-6 months this underpins solvency and strategic optionality despite weak profits.

Extremely low leverage

Debt-to-equity of ~0.0025 implies minimal interest burden and very low refinancing risk. This durable financial flexibility allows management to prioritize operational fixes, opportunistic capital spending or M&A, and maintain liquidity cushions while addressing cash flow weakness.

Low business volatility profile

A low beta (~0.27) and modest employee base suggest the business exhibits limited market sensitivity and manageable operational scale. Over months this stability can help steady cash flows and planning, making recovery and restructuring efforts easier compared with highly cyclical peers.

Negative Factors

Deteriorating profitability

Sharp margin compression to an 8.15% gross margin and 0.55% net margin reflects persistent pressure on pricing or cost control. Over a multi-month horizon this undermines earnings power, reduces retained earnings, and limits the firm's ability to rebuild ROE without structural cost or revenue fixes.

Free cash flow turned negative

A swing to -3.55 billion FCF from positive cash flow last year signals material cash-generation deterioration. This is a durable concern: negative FCF constrains reinvestment, dividends, and may force reliance on external funding despite low debt, raising execution risk for operational recovery.

Revenue decline and margin erosion

A 2.4% revenue decline coupled with falling EBIT/EBITDA margins points to structural demand weakness or competitive pressure and operational inefficiencies. Over several months this combination can further depress profitability and return metrics unless management stabilizes top-line or improves cost structure.

Sumiken Mitsui Road Co., Ltd. Business Overview & Revenue Model

Company Description

Sumiken Mitsui Road Co.,Ltd. primarily engages in construction business in Japan. The company is involved in the design, construction, and supervision of pavements and roads, airports, ports, and living and community facilities, as well as landscaping, civil works, building, and electricity and plumbing works. It also manufactures, sells, and leases machinery; and offers consulting services, security guard outsourcing, and buildings and equipment maintenance and management services. In addition, the company engages in the collection, transportation, and treatment of general and industrial waste; manufacture and sale of asphalt mixture, aggregates, and other construction materials; and acquisition, management, use, disposal, leasing, and sale of real estate properties. Further, it is involved in the soil and groundwater pollution restoration and purification activities; and generation, supply, and sale of solar power. The company was founded in 1948 and is headquartered in Tokyo, Japan. Sumiken Mitsui Road Co.,Ltd. is a subsidiary of Sumitomo Mitsui Construction Co. Ltd.

How the Company Makes Money

null

Sumiken Mitsui Road Co., Ltd. Financial Statement Overview

Summary

Income statement trends are weak (revenue down 2.4% YoY, gross margin down to 8.15%, net margin down to 0.55%), and cash flow deteriorated sharply (FCF turned negative to -3.55B). The balance sheet is a key offset with a strong equity ratio (55.2%) and very low leverage (debt-to-equity 0.0025), though ROE fell to 1.23%.

Income Statement

The company's revenue has shown a declining trend over the past few years, with a revenue decrease of 2.4% from 2024 to 2025. Gross profit margin decreased to 8.15% in 2025 from 10.3% in 2024, indicating pressure on cost management. Net profit margin fell significantly to 0.55% in 2025 from 1.9% in 2024, reflecting challenges in sustaining profitability. The EBIT and EBITDA margins also decreased, suggesting operational inefficiencies.

Balance Sheet

The company maintains a strong equity position, with an equity ratio of 55.2% in 2025, indicating financial stability. The debt-to-equity ratio remains low at 0.0025, reflecting conservative leverage. However, return on equity decreased to 1.23% in 2025 from 4.3% in 2024, showing a decline in shareholder returns.

Cash Flow

Cash flow performance weakened significantly, with a negative free cash flow of -3.55 billion in 2025 compared to a positive 831 million in 2024. The operating cash flow to net income ratio indicates challenges in generating cash from operations. The free cash flow to net income ratio is negative, highlighting cash generation issues relative to reported earnings.

Breakdown	TTM	Mar 2025	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	30.52B	30.16B	30.91B	31.91B	31.54B	33.80B
Gross Profit	2.57B	2.46B	3.17B	3.25B	3.21B	4.06B
EBITDA	857.00M	813.00M	1.54B	1.48B	1.48B	2.46B
Net Income	173.00M	167.00M	587.00M	630.00M	627.00M	1.19B
Balance Sheet
Total Assets	22.35B	24.58B	27.71B	28.18B	26.71B	27.55B
Cash, Cash Equivalents and Short-Term Investments	6.33B	7.03B	11.18B	10.71B	9.66B	10.68B
Total Debt	347.00M	96.00M	125.00M	103.00M	19.00M	33.00M
Total Liabilities	9.35B	11.01B	14.05B	14.81B	13.74B	15.01B
Stockholders Equity	13.00B	13.56B	13.65B	13.36B	12.97B	12.54B
Cash Flow
Free Cash Flow	0.00	-3.55B	842.00M	1.35B	-727.00M	1.71B
Operating Cash Flow	0.00	-3.15B	1.82B	2.14B	195.00M	2.43B
Investing Cash Flow	0.00	-600.00M	-1.00B	-793.00M	-930.00M	-752.00M
Financing Cash Flow	0.00	-402.00M	-351.00M	-297.00M	-278.00M	-267.00M

Sumiken Mitsui Road Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1639.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1776, the sentiment is Positive. The current price of 1639 is below the 20-day moving average (MA) of 1784.90, below the 50-day MA of 1691.30, and above the 200-day MA of 1550.47, indicating a bullish trend. The MACD of 99.01 indicates Negative momentum. The RSI at 76.29 is Negative, neither overbought nor oversold. The STOCH value of 99.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1776.

Sumiken Mitsui Road Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1852	82 Outperform	¥81.99B	11.48	―	3.64%	18.01%	15.27%
5911	79 Outperform	¥116.84B	10.36	―	3.81%	0.82%	30.84%
1870	79 Outperform	¥91.93B	15.89	―	3.63%	35.73%	62.37%
256A	77 Outperform	¥42.11B	6.66	―	3.88%	4.11%	28.37%
1882	70 Outperform	¥89.76B	12.57	―	8.02%	2.51%	4.02%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1776	60 Neutral	¥18.21B	14.29	―	2.54%	5.89%	-30.27%