Japan Foundation Engineering Co., Ltd. (1914) AI Stock Analysis

• Market Cap: ¥16.36B
• Dividend Yield: 3.68%
• Average Volume (3M): 31.68K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.97
• Revenue Growth: 5.82%
• EPS Growth: -22.14%
• Country: JP
• Employees: 395
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 36.60
• Shares Outstanding: 29,346,400
• 10 Day Avg. Volume: 26,290
• 30 Day Avg. Volume: 31,676
• PEG Ratio: 0.15
• Price to Book (P/B): 0.56
• Price to Sales (P/S): 0.42
• P/FCF Ratio: -9.04
• 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: 67 Neutral
• Price Target: ¥835.00 ▲(22.61% Upside)
• Action: Reiterated Date: 10/30/25
• Date: Action: Reiterated 10/30/25

The overall stock score of 67 reflects a balance between strong financial performance in terms of revenue growth and stable gross margins, and concerns over profitability and liquidity due to negative free cash flow. The technical indicators suggest a lack of strong momentum, while the valuation is reasonable with an attractive dividend yield. The absence of earnings call data and corporate events means these factors did not influence the score.

Positive Factors

Revenue growth & stable gross margins

A 48.2% revenue uplift alongside stable ~16.6% gross margins indicates sustained demand and effective cost control across projects. Durable top-line growth with steady gross margins supports long-term project throughput, pricing power on specialized engineering services, and reinvestment capacity.

Conservative leverage / strong capital structure

Very low debt-to-equity (0.17) and a strong equity ratio provide financial resilience for capital-intensive projects. Conservative leverage reduces refinancing risk, preserves borrowing capacity for large infrastructure contracts, and supports investment flexibility during industry cycles.

Long-term contracts & diversified income streams

Reliance on long-term government and private construction contracts plus equipment sales/rentals creates predictable backlog and recurring cash flow profiles. Diversified service lines and strategic partnerships reduce single-project volatility and support multi-year revenue visibility.

Negative Factors

Negative free cash flow

Declining operating cash flows and negative free cash flow signal weak cash conversion despite revenue gains. Persistent FCF deficits can force reliance on external financing, constrain capex for equipment or R&D, and pressure liquidity when project billing is lumpy or capex-heavy.

Weak net profitability and returns

A net margin falling to ~0% and ROE near zero show the company struggles to translate revenue into shareholder returns. This undermines long-term capital efficiency, limits retained earnings for growth, and raises concerns about cost structure or competitive pricing pressure on margins.

Earnings and revenue volatility

Contradictory short- and medium-term metrics (recent negative revenue and steep EPS declines) point to volatile project timing or profitability swings. Such volatility complicates forecasting, increases working capital stress, and heightens execution risk on multi-year infrastructure contracts.

Japan Foundation Engineering Co., Ltd. Business Overview & Revenue Model

Company Description

Japan Foundation Engineering Co., Ltd. provides various construction services in Japan. It also offers ground improvement technology, which include chemical injection method, mechanical stirring method, and high pressure injection agitation method. In addition, the company provides various technologies for construction works, such as anchor; slope stability; foundation pile; landslide countermeasure; rock rouging; pollution control; natural restoration; tunnel assist; repair; bowling application; geological survey and construction consultant; construction-generated soil recycling technologies; and real-time monitoring systems. The company was formerly known as Japan Grout Corporation and changed its name to Japan Foundation Engineering Co., Ltd. in April 1985. The company was founded in 1958 and is headquartered in Osaka, Japan.

How the Company Makes Money

Japan Foundation Engineering Co., Ltd. generates revenue primarily through its engineering and construction services. Key revenue streams include fees from foundation construction projects, consulting services in geotechnical engineering, and sales or rentals of specialized construction equipment. The company often engages in long-term contracts with government agencies and private developers, ensuring a steady income flow. Strategic partnerships with construction firms and collaborations on large infrastructure projects also contribute significantly to its earnings. Additionally, the company may benefit from advancements in technology and innovative engineering solutions that enhance operational efficiency and project outcomes, further driving its profitability.

Japan Foundation Engineering Co., Ltd. Financial Statement Overview

Summary

Japan Foundation Engineering Co., Ltd. shows strong revenue growth and stable gross margins, indicating a competitive position in the market. However, the decline in net profit margin and negative free cash flow raise concerns about profitability and liquidity. The balance sheet remains strong with low leverage, but the company needs to address cash flow challenges to ensure long-term financial health.

Income Statement

The company has demonstrated strong revenue growth with a 48.2% increase in the latest year, indicating robust demand or successful expansion. Gross profit margins have remained stable around 16.6%, suggesting effective cost management. However, the net profit margin has been volatile, dropping to 0% in the latest period, which could indicate challenges in controlling expenses or increased competition. EBIT and EBITDA margins have improved, reflecting better operational efficiency.

Balance Sheet

The company maintains a healthy debt-to-equity ratio of 0.17, indicating conservative leverage and financial stability. The equity ratio is strong, suggesting a solid capital structure. However, the return on equity has decreased to 0%, which may point to inefficiencies in generating returns from equity investments.

Cash Flow

Operating cash flow has decreased significantly, and free cash flow is negative, indicating potential liquidity issues. The negative free cash flow to net income ratio suggests that the company is not generating sufficient cash from operations to cover its net income, which could be a concern for sustainability.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	29.78B	30.28B	23.58B	23.91B	22.11B	22.85B
Gross Profit	4.73B	5.05B	3.93B	3.37B	3.42B	3.02B
EBITDA	2.92B	3.18B	2.41B	2.02B	2.05B	1.63B
Net Income	948.85M	1.44B	932.86M	526.97M	498.10M	213.28M
Balance Sheet
Total Assets	31.78B	31.78B	32.84B	30.24B	30.09B	30.86B
Cash, Cash Equivalents and Short-Term Investments	4.07B	4.62B	6.22B	6.21B	6.43B	5.77B
Total Debt	4.50B	4.00B	3.32B	3.34B	2.72B	1.25B
Total Liabilities	9.29B	8.83B	10.90B	9.61B	8.98B	8.22B
Stockholders Equity	22.48B	22.95B	21.94B	20.63B	21.11B	22.64B
Cash Flow
Free Cash Flow	0.00	-1.41B	484.31M	-173.48M	-10.49M	204.65M
Operating Cash Flow	0.00	449.66M	1.65B	969.54M	1.19B	1.37B
Investing Cash Flow	0.00	-1.87B	-1.43B	-945.98M	-325.95M	-783.67M
Financing Cash Flow	0.00	-258.77M	-383.00M	-276.96M	48.60M	-350.03M

Japan Foundation Engineering Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 681.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:1914, the sentiment is Positive. The current price of 681 is below the 20-day moving average (MA) of 713.55, below the 50-day MA of 689.46, and above the 200-day MA of 659.88, indicating a bullish trend. The MACD of 18.80 indicates Negative momentum. The RSI at 81.51 is Negative, neither overbought nor oversold. The STOCH value of 87.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1914.

Japan Foundation Engineering Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1960	73 Outperform	¥22.84B	11.42	―	2.97%	22.32%	5024.88%
1828	73 Outperform	¥31.52B	11.49	―	3.44%	-5.43%	34.48%
1716	71 Outperform	¥18.33B	10.67	―	2.87%	-1.39%	-4.43%
4642	70 Outperform	¥8.30B	16.96	―	2.03%	16.10%	-10.63%
5918	70 Outperform	¥15.94B	16.82	―	1.39%	2.98%	11.88%
1914	67 Neutral	¥16.36B	12.39	―	3.68%	5.82%	-22.14%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%