Yahagi Construction Co., Ltd. (1870) AI Stock Analysis

• Market Cap: ¥108.99B
• Dividend Yield: 3.63%
• Average Volume (3M): 121.46K
• Price to Earnings (P/E): 10.2
• Beta (1Y): 0.70
• Revenue Growth: 35.73%
• EPS Growth: 62.37%
• Country: JP
• Employees: 1,324
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 36.73
• Shares Outstanding: 44,607,456
• 10 Day Avg. Volume: 128,820
• 30 Day Avg. Volume: 121,456
• PEG Ratio: -0.77
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 0.39
• P/FCF Ratio: -3.06
• 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): 185.9
• Revenue Forecast (FY): ¥169.00B

• Rating: 79 Outperform
• Price Target: ¥2,662.00 ▲(14.10% Upside)
• Action: Reiterated Date: 11/30/25
• Date: Action: Reiterated 11/30/25

Yahagi Construction's strong technical indicators and attractive valuation are the primary drivers of its overall score. The company's robust revenue growth and stable gross profitability further support its positive outlook. However, declining net profit margins and negative cash flow trends present potential risks that investors should monitor.

Positive Factors

Revenue Growth

The company's strong revenue growth trajectory indicates a robust market position and effective execution of its business model, enhancing its competitive edge in the construction industry.

Stable Gross Profitability

Consistent gross profitability suggests effective cost management and pricing strategies, which are crucial for maintaining long-term financial health and competitiveness.

Balanced Debt-to-Equity Ratio

A balanced debt-to-equity ratio indicates a stable capital structure, providing financial flexibility and reducing risk associated with excessive leverage.

Negative Factors

Declining Net Profit Margins

The decline in net profit margins suggests rising operational or interest costs, which could impact profitability and require strategic adjustments to improve efficiency.

Increased Leverage

Increased leverage can strain financial resources and limit the company's ability to invest in growth opportunities, potentially affecting long-term stability.

Negative Cash Flow Trends

Negative cash flow trends highlight challenges in converting profits into cash, which may impact the company's ability to fund operations and future investments.

Yahagi Construction Co., Ltd. Business Overview & Revenue Model

Company Description

Yahagi Construction Co.,Ltd. engages in the construction of buildings in Japan. Its works include condominiums, logistics centers, commercial facilities, office buildings, airport terminal buildings, residential site development, roadways, railways, aseismic reinforcement, and slope face reinforcement. The company is involved in planning, surveying, designing, supervising, executing, and consulting for civil engineering, architecture, and other construction projects. It also engages in the maintenance and management of buildings and structures, diagnosis, and assessment of seismic resistance, etc. In addition, the company is involved in the planning, designing, supervising, and consulting related to inspection and removal of environmental pollutants; and planning, construction, and maintenance of public facilities, such as roads, railroads, buildings, educational/cultural facilities, etc. Further, it purchases, sells, leases, mediates, and manages real estate, as well as provides management and consulting related to real estate investment. The company was incorporated in 1949 and is headquartered in Nagoya, Japan.

How the Company Makes Money

Yahagi Construction Co., Ltd. generates revenue primarily through its construction contracts, which include public works projects, private sector developments, and infrastructure improvements. The company's revenue model is based on a mix of fixed-price contracts and cost-plus contracts, allowing for flexibility in pricing based on project scope and client requirements. Key revenue streams include government contracts for transportation infrastructure, such as roads and bridges, as well as residential and commercial building projects. Additionally, Yahagi Construction often partners with local governments and private developers, leveraging these relationships to secure large-scale projects and maintain a steady flow of contracts, contributing significantly to its earnings.

Yahagi Construction Co., Ltd. Financial Statement Overview

Summary

Yahagi Construction shows strong revenue growth and stable gross profitability, indicative of a robust business model. However, declining net profit margins and increased leverage highlight potential risks in operational efficiency and financial stability. The negative cash flow trends warrant attention, as they may impact future investments and financial flexibility.

Income Statement

Yahagi Construction has demonstrated solid revenue growth, increasing from ¥93 billion in 2022 to ¥141 billion in 2025, reflecting a positive growth trajectory. Gross profit margin has remained stable, averaging around 14% over the years, indicating effective cost management. However, the decline in net profit margin from 5.5% in 2022 to 4.0% in 2025 suggests rising operational or interest costs. The EBIT and EBITDA margins have slightly decreased, pointing to potential efficiency issues in operating expenses.

Balance Sheet

The company maintains a balanced debt-to-equity ratio, which has increased to 0.56 in 2025, reflecting a moderate leverage level. The equity ratio of around 48% indicates a stable capital structure. However, the increase in total debt to ¥38.6 billion in 2025 signals potential risk if revenue growth does not keep pace. The return on equity (ROE) has been steady, suggesting effective use of shareholder funds, albeit with a slight decrease in recent years.

Cash Flow

Yahagi Construction's cash flow performance has been volatile, with negative free cash flow in recent years due to significant capital expenditures and reduced operating cash flow. The free cash flow to net income ratio turned negative in 2025, indicating challenges in converting profits into cash. The operating cash flow to net income ratio has also declined, suggesting potential inefficiencies in cash-generating activities.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	155.22B	140.70B	119.82B	111.11B	93.09B	106.61B
Gross Profit	22.60B	19.42B	19.80B	16.59B	14.94B	15.70B
EBITDA	12.45B	9.50B	10.57B	7.41B	8.00B	6.57B
Net Income	7.62B	5.64B	6.46B	4.51B	4.84B	3.29B
Balance Sheet
Total Assets	153.18B	144.22B	126.00B	129.99B	116.42B	129.84B
Cash, Cash Equivalents and Short-Term Investments	16.36B	15.67B	19.99B	22.82B	22.01B	22.09B
Total Debt	42.10B	38.60B	22.40B	31.90B	30.40B	42.94B
Total Liabilities	83.56B	75.38B	59.46B	69.56B	58.89B	75.20B
Stockholders Equity	69.61B	68.83B	66.53B	60.43B	57.53B	54.64B
Cash Flow
Free Cash Flow	0.00	-18.04B	7.83B	1.47B	13.24B	-7.50B
Operating Cash Flow	0.00	-17.19B	10.23B	4.15B	15.84B	-6.76B
Investing Cash Flow	0.00	-255.00M	-1.18B	-3.07B	-1.55B	-220.00M
Financing Cash Flow	0.00	13.15B	-11.86B	-253.00M	-14.35B	15.36B

Yahagi Construction Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2333.00
• 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:1870, the sentiment is Positive. The current price of 2333 is below the 20-day moving average (MA) of 2434.00, below the 50-day MA of 2402.54, and above the 200-day MA of 2108.15, indicating a bullish trend. The MACD of 29.75 indicates Negative momentum. The RSI at 65.54 is Neutral, neither overbought nor oversold. The STOCH value of 83.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1870.

Yahagi Construction Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1879	80 Outperform	¥128.67B	9.28	―	2.81%	-3.99%	13.29%
1982	80 Outperform	¥147.33B	17.94	―	2.14%	4.81%	-1.16%
5911	79 Outperform	¥124.81B	10.64	―	3.81%	0.82%	30.84%
1870	79 Outperform	¥108.99B	10.23	―	3.63%	35.73%	62.37%
1871	75 Outperform	¥160.05B	17.26	―	3.13%	5.39%	33.02%
1882	70 Outperform	¥97.72B	26.86	―	8.02%	2.51%	4.02%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Yahagi Construction Co., Ltd. Corporate Events

Yahagi Construction Lifts FY2025 Earnings Forecast on Strong Margins and Real Estate Gains

Yahagi Construction Co., Ltd. revised its consolidated earnings forecast for the fiscal year ending March 31, 2026, keeping net sales unchanged at ¥168 billion but raising operating and ordinary profit projections by ¥1.5 billion each. The upward revision reflects stronger-than-expected profitability in construction projects, higher contracting volumes, and accumulated gains from real estate disposals, offsetting share-based compensation expenses.

Despite booking an extraordinary loss of ¥1.8 billion in the third quarter related to the transfer of its condominiums for sale business, the company now expects profit attributable to owners of parent to exceed the prior forecast by ¥0.4 billion, to ¥7 billion. The revised outlook also marks a solid year-on-year improvement versus fiscal 2025, signaling resilient earnings power and potentially reinforcing Yahagi Construction’s competitive position and shareholder value in a challenging construction and real estate environment.

The most recent analyst rating on (JP:1870) stock is a Hold with a Yen2723.00 price target. To see the full list of analyst forecasts on Yahagi Construction Co., Ltd. stock, see the JP:1870 Stock Forecast page.

Yahagi Construction Lifts Full-Year Outlook on Sharp Profit Rebound

Yahagi Construction Industry posted a sharp rebound in earnings for the nine months ended December 31, 2025, with net sales up 37.1% to ¥133.1 billion and profit attributable to owners of parent surging 215.6% to ¥7.3 billion, alongside a rise in the equity ratio from 47.7% to 52.5%. Basic earnings per share more than tripled year on year, and the company raised its full-year forecast, now projecting ¥168 billion in net sales and a 24.0% increase in full-year profit, while maintaining a higher dividend trajectory of ¥90 per share for the fiscal year ending March 31, 2026.

The stronger balance sheet and upgraded profit outlook suggest improved project execution and profitability, reinforcing Yahagi Construction’s financial base after a weaker prior year. For shareholders, the increased dividend compared with the previous ordinary payout underlines management’s confidence in cash generation, while the lack of changes in accounting policies and consolidation scope indicates that performance gains are driven by underlying operations rather than technical adjustments.

The most recent analyst rating on (JP:1870) stock is a Hold with a Yen2723.00 price target. To see the full list of analyst forecasts on Yahagi Construction Co., Ltd. stock, see the JP:1870 Stock Forecast page.

Yahagi Construction Raises Full-Year Profit Forecast on Strong Construction and Real Estate Margins

Yahagi Construction has revised upward its full-year consolidated forecast for the fiscal year ending March 31, 2026, keeping net sales unchanged at ¥168 billion but lifting operating and ordinary profit projections by ¥1.5 billion each. Profit attributable to owners of parent is now projected at ¥7.0 billion, up ¥0.4 billion from the previous guidance, with earnings per share expected to rise to ¥162.66 from ¥153.38.

The upgrade reflects gross profit exceeding initial expectations, driven by improved profitability and higher contract values in the construction business, as well as stronger gains from real estate sales. These positives more than offset the impact of expenses related to an employee stock ownership plan and an extraordinary loss of ¥1.8 billion tied to the transfer of condominium-for-sale businesses, signaling resilient earnings momentum for stakeholders despite one-off charges.

The most recent analyst rating on (JP:1870) stock is a Hold with a Yen2723.00 price target. To see the full list of analyst forecasts on Yahagi Construction Co., Ltd. stock, see the JP:1870 Stock Forecast page.

Yahagi Construction to Grant Treasury Shares to Employees via Stock Ownership Scheme

Yahagi Construction will dispose of up to 149,600 shares of its treasury stock via a third-party allotment to its Employee Shareholders Association at ¥2,400 per share, with final size contingent on actual employee participation. The company will effectively grant each eligible employee a special incentive equivalent to 100 shares, paid in cash and contributed to the association, with no additional monetary outlay required from employees.

Introduced in the final year of its current mid-term plan, the scheme is designed to boost job satisfaction, motivation, and retention, while aligning employees’ interests more closely with shareholders. By treating the stock grants as a human capital investment, Yahagi aims to cultivate staff who think from the perspective of shareholders and stakeholders, thereby reinforcing its foundation for sustainable growth and its transition into a problem-solving, value-creating enterprise.

The most recent analyst rating on (JP:1870) stock is a Hold with a Yen2723.00 price target. To see the full list of analyst forecasts on Yahagi Construction Co., Ltd. stock, see the JP:1870 Stock Forecast page.

Yahagi Construction to Acquire Kaisho Parent to Bolster Slope Engineering Business

Yahagi Construction has resolved to acquire all outstanding shares of Aquarius Invesco Ltd., the parent company of Kaisho Inc., in order to integrate Kaisho’s business and technology into the group. Kaisho’s Stand Drive (SD) method, a technique for installing steel reinforcing bar without heavy machinery or scaffolding in difficult locations, complements Yahagi’s existing PAN WALL inverted soil reinforcement method without competing on sales, and is expected to strengthen the company’s portfolio of slope construction solutions. By folding the SD Method into its sales network and leveraging Kaisho’s track record, particularly in the Kinki and Kyushu regions, Yahagi aims to expand order opportunities, broaden its trade area, and generate group-wide synergies. The move supports Yahagi’s strategy to build a stronger management foundation ahead of its next medium-term plan (FY2026–FY2030), enhance competitiveness in targeted customer bases and business sectors, and accelerate growth as a problem-solving, value-creating construction engineering group.

The most recent analyst rating on (JP:1870) stock is a Hold with a Yen2723.00 price target. To see the full list of analyst forecasts on Yahagi Construction Co., Ltd. stock, see the JP:1870 Stock Forecast page.

Yahagi Construction to Spin Off Condominium Businesses to Meitetsu Group in Strategic Refocus

Yahagi Construction announced that two of its subsidiaries, Yahagi Real Estate and Yahagi Building and Life, will transfer their condominium development, sales, and management businesses to Meitetsu Group companies via absorption-type demergers effective April 1, 2026, subject to shareholder approval. By offloading these individual-focused condominium operations to Meitetsu City Design and Meitetsu Community Life, which have a strong real estate base around Nagoya Station and along Nagoya Railroad lines, Yahagi aims to realize synergies for the transferred businesses while sharpening its own strategic focus and reallocating management resources to its core strengths in construction and real estate for corporate and public-sector clients, thereby enhancing competitiveness ahead of its next medium-term plan and geographic expansion along the maglev route.

The most recent analyst rating on (JP:1870) stock is a Hold with a Yen2723.00 price target. To see the full list of analyst forecasts on Yahagi Construction Co., Ltd. stock, see the JP:1870 Stock Forecast page.