Penta-Ocean Construction Co (1893) AI Stock Analysis

• Market Cap: $407.09B
• Dividend Yield: 2%
• Average Volume (3M): 1.66M
• Price to Earnings (P/E): 28.4
• Beta (1Y): 0.71
• Revenue Growth: 16.67%
• EPS Growth: 5.82%
• Country: JP
• Employees: 3,824
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 36.90
• Shares Outstanding: 286,013,920
• 10 Day Avg. Volume: 1,976,700
• 30 Day Avg. Volume: 1,658,796
• PEG Ratio: -0.54
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 0.28
• P/FCF Ratio: -3.27
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.56
• Enterprise Value/Gross Profit: 8.24
• Enterprise Value/Ebitda: 9.87
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: ¥1,824.00 ▲(5.46% Upside)

The stock's overall score is primarily influenced by strong technical momentum, despite financial performance challenges and a high valuation. The company's revenue growth is overshadowed by profitability and cash flow issues, and the stock appears overvalued with a modest dividend yield. Investors should be cautious of the overbought technical indicators.

Positive Factors

Revenue Growth

The consistent revenue growth indicates strong demand for Penta-Ocean's services and its ability to capture market opportunities, supporting long-term business expansion.

Market Position

Penta-Ocean's long-standing presence and specialization in marine and civil engineering bolster its reputation and competitive edge in the construction industry.

Strategic Partnerships

Strategic partnerships expand Penta-Ocean's capabilities and market access, fostering innovation and competitive advantages in international projects.

Negative Factors

Profitability Challenges

Declining profit margins suggest rising operational costs, which could pressure profitability and require efficiency improvements to sustain long-term growth.

Cash Flow Strain

Negative cash flow indicates that the company's operations are not generating enough cash to cover costs, potentially limiting investment capacity and financial flexibility.

Rising Leverage

Higher leverage increases financial risk and interest obligations, which could impact the company's ability to invest in growth and manage economic downturns.

Penta-Ocean Construction Co Business Overview & Revenue Model

Company Description

Penta-Ocean Construction Co., Ltd. engages in the civil engineering and building construction activities in Japan, Southeast Asia, and internationally. The company operates through three segments: Domestic Civil Engineering, Domestic Building Construction, and Overseas. It constructs ports and harbors, airports, power stations, bridges, offices, commercial buildings and lodges, and residential and education buildings, as well as undertakes water supply and sewerage, railway, environmental facility, recreational, and dam and river work projects. The company is also involved in the development of real estate properties; and shipbuilding, leasing, insurance, and environment businesses. Penta-Ocean Construction Co., Ltd. was founded in 1896 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Penta-Ocean Construction Co. generates revenue primarily through the bidding and execution of construction contracts in both public and private sectors. The company earns money by providing comprehensive services that include planning, design, and construction management for large infrastructure projects. Key revenue streams include government contracts for public works, private sector projects, and international assignments, particularly in Asia and the Pacific regions. The firm also benefits from strategic partnerships with local and international firms, which can enhance its capabilities and expand its market reach. Additionally, Penta-Ocean invests in technology and innovation to improve efficiency and reduce costs, ultimately contributing to its profitability.

Penta-Ocean Construction Co Financial Statement Overview

Summary

Penta-Ocean Construction Co shows revenue growth but faces profitability and cash flow challenges. The company is experiencing increased leverage, which could pose risks if not managed. Despite strong equity, declining margins and negative cash flows are critical issues to address for long-term stability and profitability.

Income Statement

Penta-Ocean Construction Co has shown a consistent revenue growth trend over the past years, with a significant increase of 17.76% in 2025. However, the gross profit margin has decreased from 2024 to 2025, indicating rising costs. The net profit margin also declined, suggesting profitability challenges. Despite these issues, the company maintains positive EBIT and EBITDA margins, although both have seen a downward trend.

Balance Sheet

The company maintains a solid equity base with an equity ratio of 26.06% in 2025, showing a strong reliance on equity financing. However, the increasing debt-to-equity ratio, which reached 0.97 in 2025, points to a rising leverage risk. Return on equity has declined, reflecting reduced profitability relative to equity. Overall, the balance sheet shows solid equity but increasing leverage concerns.

Cash Flow

Penta-Ocean Construction Co faced severe cash flow challenges in 2025, with a negative free cash flow of ¥61.48 billion. The operating cash flow to net income ratio is negative, indicating that the company's operations are not generating enough cash to cover the costs, exacerbated by high capital expenditures. Free cash flow to net income ratio also indicates cash flow strain.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	747.28B	727.49B	617.71B	502.20B	458.23B	471.06B
Gross Profit	50.90B	47.58B	53.33B	26.42B	37.23B	50.04B
EBITDA	42.49B	30.52B	37.30B	10.16B	23.46B	38.12B
Net Income	14.14B	12.46B	17.88B	684.00M	10.75B	20.99B
Balance Sheet
Total Assets	683.11B	660.13B	566.03B	508.18B	467.36B	452.25B
Cash, Cash Equivalents and Short-Term Investments	53.03B	57.27B	60.19B	50.50B	44.86B	59.79B
Total Debt	219.32B	166.47B	110.32B	93.69B	92.56B	82.21B
Total Liabilities	511.15B	488.00B	392.97B	351.23B	307.58B	293.85B
Stockholders Equity	171.90B	172.06B	173.01B	156.84B	159.60B	158.28B
Cash Flow
Free Cash Flow	0.00	-61.48B	-1.75B	9.57B	-16.34B	19.65B
Operating Cash Flow	0.00	-23.33B	9.14B	19.69B	-7.69B	30.69B
Investing Cash Flow	0.00	-23.22B	-6.41B	-11.70B	-11.82B	-12.80B
Financing Cash Flow	0.00	43.88B	6.71B	-6.96B	1.36B	-3.11B

Penta-Ocean Construction Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1729.50
• 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:1893, the sentiment is Positive. The current price of 1729.5 is above the 20-day moving average (MA) of 1560.35, above the 50-day MA of 1368.02, and above the 200-day MA of 979.62, indicating a bullish trend. The MACD of 94.49 indicates Negative momentum. The RSI at 66.29 is Neutral, neither overbought nor oversold. The STOCH value of 84.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1893.

Penta-Ocean Construction Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1719	79 Outperform	€315.02B	10.02	16.55%	4.66%	9.49%	64.79%
1860	76 Outperform	¥358.53B	11.39	―	3.10%	18.92%	73.08%
5076	76 Outperform	¥409.44B	10.87	―	3.13%	―	―
1820	75 Outperform	¥210.85B	13.21	―	4.15%	-3.72%	59.02%
1720	69 Neutral	¥111.60B	13.85	―	3.47%	20.38%	128.85%
1893	68 Neutral	$407.09B	28.38	10.95%	2.00%	16.67%	5.82%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%