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

• Market Cap: ¥15.23B
• Dividend Yield: 3.68%
• Average Volume (3M): 31.68K
• Price to Earnings (P/E): 4.5
• Beta (1Y): 0.95
• 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: -8.74
• 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: ¥778.00 ▲(14.24% 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

Strong revenue growth

A 48.2% revenue rise in the latest year indicates sustained demand or successful expansion initiatives, providing a larger sales base to absorb costs and support reinvestment. Over 2-6 months this underpins cash generation potential and market positioning if growth persists.

Stable gross margins and improving operating margins

Stable ~16.6% gross margins plus rising EBIT/EBITDA margins point to effective cost control and operational leverage. This combination supports margin sustainability, improves free cash generation potential when paired with revenue growth, and signals durable competitive execution.

Conservative leverage and strong capital structure

A low debt-to-equity ratio (~0.17) and strong equity ratio mean the company has financial flexibility to fund capex, weather downturns, or pursue selective investments without excessive refinancing risk. This enhances long-term resilience and strategic optionality.

Negative Factors

Negative free cash flow / weaker operating cash flow

Declining operating cash flow and negative free cash flow signal the business is not converting earnings into sustainable cash, pressuring liquidity. Over months this can force external financing, curb investment, or constrain dividend/distribution capacity, harming long-term stability.

Net profit margin collapse

A drop of net margin to 0% erodes the economic return on sales despite revenue growth. This suggests rising costs, pricing pressure, or non-operating hits that can persist, reducing retained earnings, limiting reinvestment, and undermining shareholder returns over the medium term.

Material EPS contraction

A ~46% contraction in EPS reflects meaningful earnings volatility and weaker profitability per share. If sustained, EPS declines reduce the firm's ability to fund growth internally, make consistent payouts, and signal execution or margin issues that weigh on medium-term fundamentals.

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

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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	2.82B	3.12B	2.03B	1.78B	1.75B	1.49B
Net Income	949.31M	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	-1.46B	701.76M	185.11M	354.51M	411.63M
Operating Cash Flow	0.00	648.97M	1.83B	1.13B	1.36B	1.54B
Investing Cash Flow	0.00	-2.09B	-1.62B	-1.12B	-507.29M	-960.71M
Financing Cash Flow	0.00	-233.30M	-374.53M	-268.23M	53.96M	-348.06M

Japan Foundation Engineering Co., Ltd. Technical Analysis

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

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 727.75, below the 50-day MA of 704.48, and above the 200-day MA of 667.30, indicating a neutral trend. The MACD of 2.43 indicates Positive momentum. The RSI at 50.04 is Neutral, neither overbought nor oversold. The STOCH value of 29.38 is Neutral, 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	¥22.12B	8.25	―	2.97%	22.32%	5024.88%
1828	73 Outperform	¥28.67B	9.70	―	3.44%	-5.43%	34.48%
1716	71 Outperform	¥17.35B	8.08	―	2.87%	-1.39%	-4.43%
4642	70 Outperform	¥8.19B	16.72	―	2.03%	16.10%	-10.63%
5918	70 Outperform	¥15.44B	6.90	―	1.39%	2.98%	11.88%
1914	67 Neutral	¥15.23B	4.49	―	3.68%	5.82%	-22.14%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%