Nakano Corporation (1827) AI Stock Analysis

• Market Cap: ¥43.37B
• Dividend Yield: 1.96%
• Average Volume (3M): 58.36K
• Price to Earnings (P/E): 13.7
• Beta (1Y): 0.87
• Revenue Growth: 2.55%
• EPS Growth: -14.37%
• Country: JP
• Employees: 1,331
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 43.48
• Shares Outstanding: 34,498,096
• 10 Day Avg. Volume: 43,570
• 30 Day Avg. Volume: 58,363
• PEG Ratio: 0.93
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.24
• P/FCF Ratio: -5.70
• 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: 75 Outperform
• Price Target: ¥1,420.00 ▲(17.74% Upside)

The score is driven primarily by strong financial stability (high equity, declining debt) and constructive technical momentum (above major moving averages with positive MACD). This is tempered by cash-flow weakness (negative operating/free cash flow) and only modest dividend support despite a reasonable P/E.

Positive Factors

Strong balance sheet

A rising equity base and falling total debt materially lower financial risk and improve credit standing. For a construction firm this durable balance-sheet strength supports self-funding of projects, competitive bidding, and resilience through cyclical downturns over coming months.

Stable revenue & improving margins

Modest revenue growth combined with improving gross and net margins indicates sustained demand and better cost control. For Nakano this supports predictable backlog conversion and long-term profitability, enabling reinvestment and strengthening operational economics over the medium term.

Lower capex, potential cash conversion

Management has cut capital spending and the OCF-to-net-income ratio suggests room to improve cash conversion. Reduced capex eases cash outflows, improving near-term liquidity and increasing the likelihood of restoring positive free cash flow within several quarters if operating performance holds.

Negative Factors

Negative operating/free cash flow

Persistent negative operating and free cash flows weaken liquidity and force reliance on equity or external financing despite accounting profits. For a project-driven construction business, poor cash conversion can constrain working capital, limit investment, and raise refinancing risk over the medium term.

Margin volatility

Volatile EBIT/EBITDA margins suggest inconsistent project execution, pricing pressure, or cost control issues. Such variability reduces earnings predictability and free-cash-flow stability, undermining long-term profitability and competitive position unless operational efficiency is improved.

Declining EPS

A ~-14% EPS decline indicates earnings pressure despite revenue and margin improvements. Continued EPS contraction can limit retained-earnings growth, reduce funding for strategic initiatives, and impair the company’s ability to deleverage or invest without tapping reserves or external capital over the next several quarters.

Nakano Corporation Business Overview & Revenue Model

Company Description

Nakano Corporation engages in the construction and real estate business in Japan, Singapore, Malaysia, Indonesia, Thailand, Vietnam, and internationally. The company plans, designs, and constructs educational, office, residential, commercial, industrial, renovation, and public work and civil engineering projects, as well as transport, warehousing, distribution, welfare, leisure, religious, and healthcare facilities. It also offers development assistance, as well as land and building based consulting services; and engages in solar power generation and insurance agency business, as well as technical support projects located in the Far East, Russia, and the Middle East. Further, the company leases office buildings, commercial facilities, and residual units. Nakano Corporation was founded in 1933 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nakano Corporation generates revenue through the sale of its reinforced concrete products, which are utilized in various construction projects. The company earns money by supplying these materials to contractors, construction firms, and government agencies involved in infrastructure development. Key revenue streams include direct sales of concrete products, contracts for large-scale construction projects, and potential partnerships with other construction companies to provide specialized materials and services. Additionally, the company may benefit from long-term contracts that provide a steady revenue stream, as well as government initiatives aimed at infrastructure improvements that can increase demand for its products.

Nakano Corporation Financial Statement Overview

Summary

Profitable growth and a strong balance sheet support a solid score (improving revenue and margins; rising equity and declining debt). The main offset is weaker cash-flow quality, with negative operating and free cash flows in recent years.

Income Statement

Nakano Corporation has shown stable revenue growth with a recent increase from 107.4 billion to 110.5 billion yen. Gross and net profit margins have improved, indicating better cost management and profitability. However, fluctuations in EBIT and EBITDA margins highlight the need for operational efficiency improvements.

Balance Sheet

The company maintains a strong equity position with an increasing stockholders' equity and a low debt-to-equity ratio, indicative of financial stability. The equity ratio remains strong, suggesting good asset management. There is a consistent decrease in total debt, which mitigates financial risk.

Cash Flow

Cash flow management remains a challenge, with negative operating and free cash flows in recent years. However, the company has been reducing capital expenditures, and the operating cash flow to net income ratio suggests potential for improvement. The free cash flow to net income ratio needs attention to enhance liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	108.72B	110.54B	107.42B	114.46B	96.47B	116.05B
Gross Profit	10.56B	10.77B	9.95B	8.94B	4.99B	7.27B
EBITDA	3.99B	4.43B	4.27B	3.42B	-313.00M	2.05B
Net Income	2.53B	2.90B	2.65B	1.91B	-1.59B	335.00M
Balance Sheet
Total Assets	80.00B	80.67B	80.62B	79.67B	82.19B	84.47B
Cash, Cash Equivalents and Short-Term Investments	27.63B	20.96B	26.23B	27.90B	27.05B	22.38B
Total Debt	674.00M	674.00M	822.00M	971.00M	1.18B	6.39B
Total Liabilities	35.84B	36.21B	38.46B	41.84B	46.62B	47.15B
Stockholders Equity	42.56B	42.84B	40.66B	36.55B	34.42B	35.70B
Cash Flow
Free Cash Flow	0.00	-4.64B	-2.43B	1.82B	9.87B	-4.94B
Operating Cash Flow	0.00	-4.38B	-2.09B	2.17B	11.52B	-4.54B
Investing Cash Flow	0.00	-398.00M	-28.00M	-256.00M	-2.68B	89.00M
Financing Cash Flow	0.00	-891.00M	-801.00M	-776.00M	-5.74B	4.06B

Nakano Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1206.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1827, the sentiment is Positive. The current price of 1206 is above the 20-day moving average (MA) of 1157.15, above the 50-day MA of 1119.46, and above the 200-day MA of 874.21, indicating a bullish trend. The MACD of 21.53 indicates Negative momentum. The RSI at 61.35 is Neutral, neither overbought nor oversold. The STOCH value of 82.99 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1827.

Nakano Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1810	79 Outperform	¥45.75B	10.40	―	3.97%	2.85%	317.62%
1780	76 Outperform	¥27.82B	7.92	―	2.03%	26.15%	64.47%
1827	75 Outperform	¥43.37B	13.73	―	1.96%	2.55%	-14.37%
1828	73 Outperform	¥29.83B	10.40	―	3.44%	-5.43%	34.48%
1866	72 Outperform	¥38.31B	14.18	―	2.04%	-3.21%	-45.14%
1811	69 Neutral	¥56.30B	13.74	―	1.57%	11.01%	231.83%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%