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Kumagai Gumi Co Ltd (JP:1861)
:1861

Kumagai Gumi Co (1861) AI Stock Analysis

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JP:1861

Kumagai Gumi Co

(1861)

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Outperform 74 (OpenAI - 4o)
Rating:74Outperform
Price Target:
¥1,752.00
▲(11.95% Upside)
Kumagai Gumi Co's stock is supported by strong technical momentum and a stable financial position, though profitability and cash flow efficiency challenges need attention. The valuation is moderate, with a decent dividend yield, but growth acceleration is necessary to justify higher valuations.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong demand for Kumagai Gumi's construction services, enhancing its market position and potential for future expansion.
Balance Sheet Health
A solid equity position and moderate debt levels provide financial stability, allowing Kumagai Gumi to invest in growth opportunities and withstand economic fluctuations.
Operational Efficiency
Stable operational efficiency suggests effective management and cost control, supporting sustainable profitability in competitive markets.
Negative Factors
Cash Flow Challenges
Declining cash flow efficiency may limit Kumagai Gumi's ability to fund operations and growth initiatives, posing a risk to long-term financial health.
Profitability Concerns
A declining gross profit margin could indicate rising costs or pricing pressures, potentially impacting future profitability and competitive positioning.
Cash Position Decline
A declining cash position may affect Kumagai Gumi's liquidity, limiting its ability to respond to unforeseen expenses or investment opportunities.

Kumagai Gumi Co (1861) vs. iShares MSCI Japan ETF (EWJ)

Kumagai Gumi Co Business Overview & Revenue Model

Company DescriptionKumagai Gumi Co.,Ltd. operates as a construction company in Japan and internationally. The company constructs tunnels, roads and bridges, railways, dams, and airports/marine ports, as well as water and sewerage, environmental, energy, renewal, ICT civil engineering, housing/mansion, office/government, hotel, commercial, culture, education/research, sports/entertainment, medical/social welfare, plant, distribution, and other projects. It also engages in the production of asphalt mixture and the paving of roads, airports, ports, bridges, etc.; building renovation business, including building deterioration surveys and seismic diagnosis to the planning, design, and construction of comfortable spaces, as well as after-sales services; and manufacture of steel products for shield tunnels and construction machinery, as well as civil engineering and renovation, environmental-related projects, and basic construction; and operates a leasing business for a steel construction. In addition, the company provides construction and building plans, and applications for projects; construction education to universities and construction companies; and insurance agency services, as well as operates as a technology trading company for construction industry. Kumagai Gumi Co.,Ltd. was founded in 1898 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyKumagai Gumi generates revenue primarily through its construction contracts, which include both public and private sector projects. The company bids on and secures contracts for infrastructure developments, earning revenue from the execution of these projects. Key revenue streams include construction services, engineering consulting, and project management fees. Additionally, Kumagai Gumi may engage in joint ventures and partnerships with local and international firms to expand its project portfolio and capabilities, further enhancing its earnings potential. Factors contributing to its financial success include a strong reputation for quality and reliability, a diversified project pipeline, and strategic alliances in the construction industry.

Kumagai Gumi Co Financial Statement Overview

Summary
Kumagai Gumi Co exhibits robust revenue growth and maintains a strong balance sheet with manageable debt levels. However, profitability and cash flow efficiency have faced challenges, potentially affecting its operational flexibility. The company's financial health remains stable, but monitoring is required to address cash flow concerns and ensure sustained growth.
Income Statement
72
Positive
Kumagai Gumi Co has shown positive revenue growth with a 12.51% increase in the latest year, accompanied by improving gross and net profit margins. The EBIT and EBITDA margins indicate stable operational efficiency. However, the company experienced a decline in gross profit margin over the past year, which may suggest rising costs or pricing pressures.
Balance Sheet
78
Positive
The company maintains a strong equity position with an equity ratio of 39.3%, reflecting stability. The debt-to-equity ratio is moderate at 0.23, indicating prudent leverage levels. The return on equity stands at 5.14%, suggesting modest profitability. The decreasing cash position over the years is a concern that could impact future liquidity.
Cash Flow
68
Positive
Kumagai Gumi Co's cash flow from operations is positive, but there's a significant decline compared to previous years, pointing to potential operational challenges. The free cash flow growth is negative, and the ratio of operating cash flow to net income shows a decline, suggesting efficiency issues in translating income into cash.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue501.27B498.58B443.19B403.50B425.22B450.23B
Gross Profit40.17B38.31B36.08B33.21B43.47B48.09B
EBITDA18.25B16.68B15.04B14.35B25.12B30.13B
Net Income10.40B9.35B8.32B7.97B15.85B17.93B
Balance Sheet
Total Assets443.11B462.53B467.23B376.65B371.10B379.57B
Cash, Cash Equivalents and Short-Term Investments51.05B50.16B70.07B40.98B67.40B71.33B
Total Debt58.74B42.13B52.38B22.20B12.15B11.89B
Total Liabilities266.94B280.70B287.22B206.79B201.79B215.74B
Stockholders Equity176.17B181.83B180.01B169.86B169.30B163.83B
Cash Flow
Free Cash Flow0.004.16B14.73B-23.17B5.10B4.48B
Operating Cash Flow0.008.23B16.97B-18.83B8.26B6.57B
Investing Cash Flow0.00-11.99B-10.78B-8.46B-3.40B-4.31B
Financing Cash Flow0.00-16.47B22.32B456.00M-9.69B-6.11B

Kumagai Gumi Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1565.00
Price Trends
50DMA
1531.40
Positive
100DMA
1392.91
Positive
200DMA
1219.75
Positive
Market Momentum
MACD
32.96
Negative
RSI
71.38
Negative
STOCH
83.87
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1861, the sentiment is Positive. The current price of 1565 is below the 20-day moving average (MA) of 1568.40, above the 50-day MA of 1531.40, and above the 200-day MA of 1219.75, indicating a bullish trend. The MACD of 32.96 indicates Negative momentum. The RSI at 71.38 is Negative, neither overbought nor oversold. The STOCH value of 83.87 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1861.

Kumagai Gumi Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
¥365.49B11.5016.55%4.26%9.49%64.79%
76
Outperform
¥422.63B13.432.73%18.92%73.08%
75
Outperform
¥235.29B13.083.82%-3.72%59.02%
74
Outperform
¥291.92B21.037.62%3.44%7.54%115.47%
73
Outperform
¥165.93B12.953.44%11.25%36.92%
63
Neutral
$10.79B15.437.44%2.01%2.89%-14.66%
63
Neutral
¥505.16B25.0810.95%1.88%16.67%5.82%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:1861
Kumagai Gumi Co
1,688.00
792.45
88.49%
JP:1719
Hazama Ando
2,028.00
955.85
89.15%
JP:1893
Penta-Ocean Construction Co
1,772.00
1,154.24
186.84%
JP:1820
Nishimatsu Construction Co., Ltd.
5,961.00
1,159.23
24.14%
JP:1835
Totetsu Kogyo Co., Ltd.
4,820.00
1,836.77
61.57%
JP:1860
Toda Corporation
1,378.00
513.59
59.42%

Kumagai Gumi Co Corporate Events

Kumagai Gumi Books ¥3.8 Billion Extraordinary Gain From Partial Sale of Sumitomo Forestry Stake
Jan 8, 2026

Kumagai Gumi has completed the partial sale of its shareholding in Sumitomo Forestry Co., Ltd., disposing of 4,777,600 shares via a block trade through a securities firm. As a result, its stake in Sumitomo Forestry has been reduced from 2.5% to 1.7% of the outstanding shares, and the company will record an extraordinary gain of 3,763 million yen as gain on sale of investment securities in its consolidated and non-consolidated results for the fourth quarter of the fiscal year ending March 31, 2026. The company stated that this finalized amount does not change the full-year earnings and dividend forecasts it announced earlier the same day, signaling that the impact of the transaction has already been incorporated into its guidance and should not alter expectations for shareholders or other stakeholders.

The most recent analyst rating on (JP:1861) stock is a Buy with a Yen1752.00 price target. To see the full list of analyst forecasts on Kumagai Gumi Co stock, see the JP:1861 Stock Forecast page.

Kumagai Gumi Books ¥4 Billion Share-Sale Gain, Lifts Profit and Dividend Forecasts
Jan 8, 2026

Kumagai Gumi has decided to sell 4,777,600 shares of Sumitomo Forestry, booking an expected ¥4.0 billion gain on sale of investment securities as extraordinary income to improve asset efficiency and reinforce its financial position. The sale prompts an upward revision of the full-year profit forecast for the fiscal year ending March 31, 2026, with profit attributable to owners of the parent now expected to reach ¥18.5 billion on a consolidated basis and ¥17.2 billion on a non-consolidated basis, significantly lifting projected earnings per share after a recent stock split. In line with its policy of targeting a roughly 40% payout ratio under its mid-term plan, the company has also raised its year-end dividend forecast from ¥20 to ¥25 per share, signaling stronger shareholder returns on the back of the improved earnings outlook driven mainly by the extraordinary gain.

The most recent analyst rating on (JP:1861) stock is a Buy with a Yen1752.00 price target. To see the full list of analyst forecasts on Kumagai Gumi Co stock, see the JP:1861 Stock Forecast page.

Kumagai Gumi and Sumitomo Forestry Cut Cross-Shareholdings While Deepening Alliance
Jan 8, 2026

Kumagai Gumi Co., Ltd. and Sumitomo Forestry Co., Ltd. announced coordinated reductions in their cross-shareholdings as part of efforts to improve capital efficiency while maintaining and deepening their capital and business alliance. Sumitomo Forestry plans to sell up to 11,473,400 shares of Kumagai Gumi through a secondary offering, while Kumagai Gumi will sell 4,777,600 shares of Sumitomo Forestry via a block trade, with both disposals conducted on an equal, proportional basis and no further share sales planned. The companies said the alliance—centered on combining Sumitomo Forestry’s expertise in wood-based construction and environmental greening with Kumagai Gumi’s advanced civil engineering and construction technologies—will continue unchanged, and Kumagai Gumi will remain an equity-method affiliate of Sumitomo Forestry. The impact on Sumitomo Forestry’s earnings is expected to be minor, whereas Kumagai Gumi will book an extraordinary gain on the sale of investment securities in the fourth quarter of the fiscal year ending March 31, 2026, providing a one-off boost to its results while signaling a more disciplined approach to capital structure and shareholder value.

The most recent analyst rating on (JP:1861) stock is a Buy with a Yen1752.00 price target. To see the full list of analyst forecasts on Kumagai Gumi Co stock, see the JP:1861 Stock Forecast page.

Kumagai Gumi Launches Share Buyback to Boost Shareholder Returns and Capital Efficiency
Jan 8, 2026

Kumagai Gumi has resolved to acquire up to 3 million of its own common shares, representing about 1.7% of its outstanding stock (excluding treasury shares), with a maximum outlay of 3.5 billion yen. The buyback, to be executed via market purchases on the Tokyo Stock Exchange between January 30 and March 31, 2026, is aimed at enhancing shareholder returns and improving capital efficiency, signaling management’s focus on capital discipline and potentially supporting the company’s share price and return metrics for investors.

The most recent analyst rating on (JP:1861) stock is a Buy with a Yen1752.00 price target. To see the full list of analyst forecasts on Kumagai Gumi Co stock, see the JP:1861 Stock Forecast page.

Kumagai Gumi to Adjust Alliance Structure with Sumitomo Forestry via Large Secondary Share Offering
Jan 8, 2026

Kumagai Gumi has resolved to conduct a secondary offering of its common shares as part of an adjustment to its long-standing capital and business alliance with Sumitomo Forestry. Sumitomo Forestry will sell 9,976,900 Kumagai Gumi shares through an underwritten secondary offering, with pricing to be set at 90–100% of the market closing price on a specified date in January, and an additional over-allotment option of up to 1,496,500 shares may be executed depending on investor demand. The move is aimed at improving capital efficiency and enhancing shareholder value by partially unwinding cross-shareholdings while maintaining the alliance, as Sumitomo Forestry is expected to remain classified as an “other associate,” signaling continuity in their strategic relationship despite a reduction in mutual shareholdings.

The most recent analyst rating on (JP:1861) stock is a Buy with a Yen1752.00 price target. To see the full list of analyst forecasts on Kumagai Gumi Co stock, see the JP:1861 Stock Forecast page.

Kumagai Gumi Co. Reports Financial Results and Announces Share Split
Nov 19, 2025

Kumagai Gumi Co., Ltd. reported its consolidated financial results for the six months ended September 30, 2025, showing a modest increase in net sales of completed construction contracts. The company also conducted a 4-for-1 share split of its common stock as of October 1, 2025, which impacts the calculation of basic earnings per share and net assets per share. This strategic move could potentially enhance market liquidity and shareholder value.

The most recent analyst rating on (JP:1861) stock is a Buy with a Yen1494.00 price target. To see the full list of analyst forecasts on Kumagai Gumi Co stock, see the JP:1861 Stock Forecast page.

Kumagai Gumi Co. Reports Financial Results and Announces Share Split
Nov 13, 2025

Kumagai Gumi Co., Ltd. reported its consolidated financial results for the six months ended September 30, 2025, showing a modest increase in net sales and operating profit compared to the previous year. The company also announced a 4-for-1 share split effective October 1, 2025, which impacts the calculation of earnings per share and dividend forecasts, reflecting a strategic move to enhance stock liquidity and shareholder value.

The most recent analyst rating on (JP:1861) stock is a Buy with a Yen1494.00 price target. To see the full list of analyst forecasts on Kumagai Gumi Co stock, see the JP:1861 Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Nov 30, 2025