Watanabe Sato Co., Ltd. (1807) AI Stock Analysis

• Market Cap: ¥9.87B
• Dividend Yield: 4.82%
• Average Volume (3M): 8.68K
• Price to Earnings (P/E): 11.6
• Beta (1Y): 0.57
• Revenue Growth: 5.27%
• EPS Growth: -26.39%
• Country: JP
• Employees: 497
• Sector: Industrials
• Sector Strength: 85
• Industry: Engineering & Construction
• EPS (TTM): 117.83
• Shares Outstanding: 6,391,400
• 10 Day Avg. Volume: 1,370
• 30 Day Avg. Volume: 8,680
• PEG Ratio: 0.55
• Price to Book (P/B): 0.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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

• Rating: 83 Outperform
• Price Target: ¥1,985.00 ▲(19.58%Upside)

The stock of Watanabe Sato Co., Ltd. scores highly due to strong technical indicators and attractive valuation metrics, providing a promising investment opportunity. While financial performance shows solid growth, attention is needed on improving cash flows and profit margins.

Watanabe Sato Co., Ltd. Business Overview & Revenue Model

Company Description

Watanabe Sato Co., Ltd. (1807) is a diversified construction and civil engineering company based in Japan. The company is engaged in a wide range of infrastructure projects, including building construction, civil engineering works, and the development of residential and commercial properties. Watanabe Sato Co., Ltd. is known for its expertise in delivering high-quality and innovative construction solutions, catering to both public and private sector clients.

How the Company Makes Money

Watanabe Sato Co., Ltd. generates revenue primarily through its construction and engineering projects. The company undertakes large-scale infrastructure projects, including roads, bridges, and tunnels, as well as residential and commercial building construction. Revenue streams include project contracts awarded by government entities and private sector clients. Additionally, the company may engage in property development and sales, contributing to its earnings. Strategic partnerships with other construction firms and suppliers also play a role in optimizing project delivery and cost management, thus impacting the company's profitability.

Watanabe Sato Co., Ltd. Financial Statement Overview

Summary

The company shows strong revenue growth and maintains a solid balance sheet with low leverage. However, declining profit margins and negative cash flows present risks that need to be addressed.

Income Statement

The company demonstrates a solid financial performance with a consistent revenue growth trajectory. Revenue increased from ¥38.46 billion in 2024 to ¥40.42 billion in 2025, marking a growth rate of 5.27%. The gross profit margin slightly decreased from 10.56% in 2024 to 8.55% in 2025, and the net profit margin contracted from 3.13% to 2.21%, indicating pressure on profitability. However, EBITDA margin remains healthy at 4.90%.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.13 and a solid equity ratio of 60.21% as of 2025. The return on equity declined to 4.18% from 5.71% in the previous year, reflecting the impact of reduced net income. Overall, the company exhibits financial stability with a high level of stockholders' equity and low leverage.

Cash Flow

The cash flow situation presents challenges with negative operating cash flow of ¥3.96 billion and free cash flow of ¥-4.49 billion in 2025. The free cash flow to net income ratio is negative, highlighting potential liquidity issues. Despite robust past performance, recent cash flow trends pose a risk.

Breakdown
TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
38.88B	40.42B	38.40B	34.66B	37.45B	39.92B
	Gross Profit
3.40B	3.46B	4.06B	2.77B	4.56B	4.71B
	EBIT
988.93M	1.18B	1.65B	616.12M	2.49B	2.69B
	EBITDA
1.54B	1.98B	2.45B	1.31B	3.10B	3.33B
	Net Income Common Stockholders
735.96M	891.64M	1.20B	446.67M	1.73B	1.84B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.28B	5.03B	7.62B	4.80B	6.00B	4.19B
	Total Assets
30.76B	35.43B	35.13B	32.28B	32.63B	32.38B
	Total Debt
102.11M	2.80B	40.87M	160.30M	233.74M	277.29M
	Net Debt
-6.18B	-2.23B	-7.58B	-4.64B	-5.77B	-3.92B
	Total Liabilities
11.96B	14.01B	13.99B	12.92B	13.53B	14.43B
	Stockholders Equity
18.73B	21.34B	21.06B	19.28B	19.03B	17.87B
Cash Flow		Free Cash Flow
0.00	-4.49B	3.03B	-271.32M	2.61B	1.75B
	Operating Cash Flow
0.00	-3.96B	3.48B	187.68M	3.28B	2.06B
	Investing Cash Flow
0.00	-625.68M	-437.98M	-929.69M	-799.90M	-382.50M
	Financing Cash Flow
0.00	2.00B	-412.42M	-455.77M	-679.72M	-1.33B

Watanabe Sato Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1660.00
• 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:1807, the sentiment is Positive. The current price of 1660 is above the 20-day moving average (MA) of 1649.70, above the 50-day MA of 1603.30, and above the 200-day MA of 1610.88, indicating a bullish trend. The MACD of 16.86 indicates Negative momentum. The RSI at 54.35 is Neutral, neither overbought nor oversold. The STOCH value of 66.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1807.

Watanabe Sato Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1807	83 Outperform	¥9.87B	11.59		4.82%	5.27%	-26.39%
1798	82 Outperform	¥8.38B	5.03		0.26%	15.97%	3.62%
1966	81 Outperform	¥11.18B	4.21		4.59%	11.12%	37.32%
1850	71 Outperform	¥8.88B	5.18		0.32%	21.36%	55.82%
1853	69 Neutral	¥9.79B	10.63		4.68%	6.79%	34.45%
1848	69 Neutral	¥8.27B	3.78		2.79%	18.22%	428.48%
Sector *	66 Neutral	$4.47B	12.21	5.40%	3.65%	4.14%	-12.00%