Raito Kogyo Co., Ltd. (1926) AI Stock Analysis

• Market Cap: ¥157.39B
• Dividend Yield: 3.22%
• Average Volume (3M): 143.58K
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.39
• Revenue Growth: 12.23%
• EPS Growth: 43.29%
• Country: JP
• Employees: 1,374
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 93.36
• Shares Outstanding: 42,970,450
• 10 Day Avg. Volume: 158,370
• 30 Day Avg. Volume: 143,580
• PEG Ratio: 0.42
• Price to Book (P/B): 1.30
• Price to Sales (P/S): 0.94
• P/FCF Ratio: 20.22
• 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): 243.71
• Revenue Forecast (FY): ¥133.14B

• Rating: 82 Outperform
• Price Target: ¥5,052.00 ▲(49.25% Upside)
• Action: Reiterated Date: 02/07/26
• Date: Action: Reiterated 02/07/26

The score is led by strong financial performance—especially a very low-leverage, high-equity balance sheet and improving profitability—tempered by a recent sharp decline in free cash flow. Technicals are supportive due to a strong uptrend, but the elevated RSI suggests near-term pullback risk. Valuation is reasonable with a modest dividend yield, adding support without being a major catalyst.

Positive Factors

Very low leverage / strong balance sheet

An exceptionally low debt-to-equity ratio and high equity ratio provide durable financial flexibility. This capital structure lets the company bid on projects, fund capex or absorb delays without material refinancing risk, supporting stability across infrastructure cycles.

Improving profitability and stable gross margin

Rising net margin and a stable gross margin indicate lasting operational improvements and pricing or execution advantages in specialized ground-improvement work. Sustained margins support free cash generation and resilience to competitive pressure on contracts.

Strong cash conversion from earnings

OCF slightly exceeding net income shows earnings reliably convert to cash, underpinning working capital needs and capital spending. Consistent cash conversion reduces execution risk on multi-month contracts and supports durable financial health despite FCF swings.

Negative Factors

Sharp decline in free cash flow

A near-50% drop in free cash flow year-over-year signals material volatility in project cash timing, capex, or working capital. Persistent FCF deterioration would constrain reinvestment, limit dividend sustainability, and could force greater reliance on equity despite low leverage.

Revenue dependent on winning discrete contracts

The business model's heavy reliance on tenders and contract awards creates structural revenue cyclicality and low visibility. Competitive tendering can compress margins and make backlog and cashflow timing highly sensitive to public spending and bidding outcomes.

Modest long-term top-line growth

A low five-year revenue CAGR points to limited organic expansion beyond core infrastructure work. Without geographic diversification, new service lines, or larger contract wins, top-line growth may remain constrained and cap long-term earnings upside.

Raito Kogyo Co., Ltd. Business Overview & Revenue Model

Company Description

Raito Kogyo Co., Ltd. engages in the civil engineering works business in Japan, North America, and internationally. The company's civil engineering works include slope protection and stabilization, ground improvement, pile and diaphragm wall, sewage main installation, environmental investigation and remediation, and repair and reinforcement of structures. It is involved in the design, supervision, management, and contracting related to construction works. The company also trades in construction material and equipment, as well as office equipment; and leases vehicles, and office, construction, and homecare equipment. In addition, it operates care houses; and provides temporary staffing, elderly care, and life and non-life insurance agency services. The company was formerly known as Raito Bosui Kogyosho Co., Ltd. and changed its name to Raito Kogyo Co., Ltd. in 1951. Raito Kogyo Co., Ltd. was founded in 1943 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Raito Kogyo Co., Ltd. generates revenue primarily through the sale of construction materials, including ready-mixed concrete and asphalt, which are essential for various construction projects. The company also earns income from engineering services related to infrastructure development, as well as from public contracts for civil engineering projects. Key revenue streams include direct sales to construction companies, government contracts, and partnerships with other firms in the construction sector. Additionally, Raito Kogyo may benefit from strategic partnerships that enhance its service offerings and expand its market reach, further contributing to its overall earnings.

Raito Kogyo Co., Ltd. Financial Statement Overview

Summary

Strong overall fundamentals driven by improving profitability (net margin up to 8.2% in 2025), stable gross margin (~20.7%), and an exceptionally strong balance sheet with very low leverage (debt-to-equity 0.018, equity ratio 71.9%). Main risk is cash flow quality/consistency, with free cash flow declining sharply (-46.2% from 2024 to 2025) despite solid cash conversion (OCF/NI 1.04).

Income Statement

Raito Kogyo Co., Ltd. has demonstrated consistent revenue growth with a CAGR of approximately 2.7% over the past five years. The Gross Profit Margin has been stable around 20.7%, and the Net Profit Margin improved to 8.2% in 2025 from 6.7% in 2020, indicating enhanced profitability. The EBIT and EBITDA margins also show strengthening operational efficiency. Overall, the financials suggest a robust upward trend in profitability, although gross profit margins have slightly fluctuated.

Balance Sheet

The company's Balance Sheet reflects strong financial health with a low Debt-to-Equity ratio of 0.018, indicating minimal leverage. The Return on Equity (ROE) stood at 11.3% in 2025, demonstrating effective use of equity. The Equity Ratio remains high at 71.9%, underscoring financial stability and low financial risk. Overall, the company maintains a solid capital structure with substantial equity backing its assets.

Cash Flow

Free Cash Flow has shown volatility, peaking in some years but declining recently, with a Free Cash Flow Growth Rate of -46.2% from 2024 to 2025. Despite this, the Operating Cash Flow to Net Income Ratio of 1.04 indicates strong cash conversion from earnings. However, recent declines in free cash flow highlight potential challenges in managing capital expenditures and operating activities effectively.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	126.56B	121.46B	117.32B	114.97B	109.50B	108.21B
Gross Profit	25.92B	25.10B	23.22B	23.92B	23.95B	22.17B
EBITDA	16.67B	17.17B	14.67B	15.86B	15.45B	14.12B
Net Income	10.36B	9.92B	8.18B	9.49B	8.93B	8.64B
Balance Sheet
Total Assets	115.03B	122.21B	124.45B	122.92B	115.89B	112.61B
Cash, Cash Equivalents and Short-Term Investments	25.31B	30.95B	34.93B	30.61B	32.02B	30.26B
Total Debt	1.69B	1.56B	1.55B	1.83B	882.00M	830.00M
Total Liabilities	29.75B	33.53B	33.35B	37.49B	35.07B	36.69B
Stockholders Equity	84.47B	87.83B	90.19B	84.50B	80.74B	75.82B
Cash Flow
Free Cash Flow	0.00	5.63B	10.48B	1.73B	5.58B	11.96B
Operating Cash Flow	0.00	10.35B	14.59B	4.76B	8.60B	15.21B
Investing Cash Flow	0.00	-1.90B	-4.25B	487.00M	-2.35B	-7.23B
Financing Cash Flow	0.00	-12.40B	-5.33B	-5.76B	-4.69B	-2.50B

Raito Kogyo Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3385.00
• 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:1926, the sentiment is Positive. The current price of 3385 is below the 20-day moving average (MA) of 3984.50, below the 50-day MA of 3687.10, and above the 200-day MA of 3250.72, indicating a bullish trend. The MACD of 171.23 indicates Negative momentum. The RSI at 80.52 is Negative, neither overbought nor oversold. The STOCH value of 91.53 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:1926.

Raito Kogyo Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1926	82 Outperform	¥157.39B	15.45	―	3.22%	12.23%	43.29%
1965	82 Outperform	¥152.45B	14.05	―	1.55%	20.44%	106.45%
1835	76 Outperform	¥198.98B	15.51	―	3.44%	11.25%	36.92%
1871	75 Outperform	¥165.19B	17.26	―	3.13%	5.39%	33.02%
1934	68 Neutral	¥210.23B	16.91	―	2.87%	6.66%	46.38%
1720	68 Neutral	¥173.15B	14.38	―	2.89%	20.38%	128.85%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Raito Kogyo Co., Ltd. Corporate Events

Raito Kogyo Lifts Full-Year Earnings and Dividend Forecasts on Strong Construction Progress

Raito Kogyo has raised its full-year earnings outlook for the fiscal year ending March 2026, citing stronger-than-expected progress on on-hand construction projects in Japan and at overseas subsidiaries. The company now projects consolidated net sales of ¥135 billion and profit attributable to owners of parent of ¥10 billion, with higher profitability supported by improved construction margins abroad.

Non-consolidated forecasts were also revised upward, reflecting higher net sales and earnings at each profit stage compared with the initial plan. In line with the stronger performance, Raito Kogyo increased its annual dividend forecast, lifting the fiscal-year-end dividend to bring the total payout to ¥118 per share, signaling a shareholder-friendly stance backed by solid operational momentum.

The most recent analyst rating on (JP:1926) stock is a Buy with a Yen4469.00 price target. To see the full list of analyst forecasts on Raito Kogyo Co., Ltd. stock, see the JP:1926 Stock Forecast page.

Raito Kogyo Lifts Nine-Month Profit 36% and Confirms Higher Dividend Payout

Raito Kogyo Co., Ltd., a Tokyo-listed construction and civil engineering specialist, reported solid growth in the nine months to December 31, 2025, with net sales rising 16.2% year on year to ¥103.5 billion and profit attributable to owners of the parent climbing 36.5% to ¥9.0 billion. Earnings per share increased to ¥207.91, supported by improved profitability and a stronger comprehensive income position, while total assets and equity both inched higher, keeping the equity ratio above 70% and underscoring a robust balance sheet.

The company kept its full-year forecast unchanged, projecting a 5.0% rise in net sales to ¥127.5 billion and modest growth in operating and ordinary profit, but a 4.2% decline in full-year profit attributable to owners to ¥9.5 billion, suggesting expectations of a more conservative back half. Raito also maintained its dividend guidance, targeting a total annual dividend of ¥107 per share for the year ending March 31, 2026, up from ¥100 the previous year, signaling continued shareholder returns alongside an active share buyback that reduced the average number of shares outstanding.

The most recent analyst rating on (JP:1926) stock is a Buy with a Yen4469.00 price target. To see the full list of analyst forecasts on Raito Kogyo Co., Ltd. stock, see the JP:1926 Stock Forecast page.

Raito Kogyo Launches ¥7 Billion Share Buyback and Plans Full Cancellation of Acquired Shares

Raito Kogyo Co., Ltd. has resolved to implement a share buyback of up to 2.3 million common shares, representing 5.37% of its outstanding shares (excluding treasury stock), with a total acquisition cost capped at 7 billion yen through market purchases between February 6 and December 31, 2026. The company plans to cancel all shares acquired under this program on January 29, 2027, a move aimed at enhancing shareholder returns and improving capital efficiency, which may support its share value and signal management’s confidence in the company’s financial position and long-term prospects.

The most recent analyst rating on (JP:1926) stock is a Buy with a Yen3922.00 price target. To see the full list of analyst forecasts on Raito Kogyo Co., Ltd. stock, see the JP:1926 Stock Forecast page.

Raito Kogyo Sharpens Capital-Efficiency Focus With Higher Payouts and Balance Sheet Overhaul

Raito Kogyo has updated its capital cost- and share price-conscious management measures under its Raito 2027 medium-term plan, emphasizing stronger communication with investors on its growth strategy and capital policy as its price-to-book ratio continues to improve. The company plans to enhance capital efficiency by targeting an effective total payout ratio of around 100% over the plan period, maintaining a dividend payout ratio of at least 50%, aiming for a dividend on equity of 6% in the final year, and supplementing this with share buybacks while gradually increasing leverage to reach an optimal capital structure. It will continue optimizing its balance sheet by reducing cross-shareholdings and investment properties and by improving working capital efficiency, using funds freed up to pursue growth investments, including M&A in fields that leverage its strengths, with the Board of Directors focusing on returns above the cost of capital. Through these initiatives and ongoing dialogue with shareholders, Raito Kogyo aims to bolster profitability, sustain higher corporate value, and reinforce its positioning as a financially disciplined, shareholder-conscious player in its sector.

The most recent analyst rating on (JP:1926) stock is a Buy with a Yen3922.00 price target. To see the full list of analyst forecasts on Raito Kogyo Co., Ltd. stock, see the JP:1926 Stock Forecast page.

Raito Kogyo Posts Strong Nine-Month Earnings and Lifts Dividend Outlook

Raito Kogyo reported strong consolidated results for the nine months ended December 31, 2025, with net sales rising 16.2% year on year to ¥103.5 billion and profit attributable to owners of parent surging 36.5% to ¥9.0 billion, driven by improved profitability and higher project volumes. The company’s equity ratio remained robust at 71.5%, and it plans to increase annual dividends for the fiscal year ending March 31, 2026 to ¥107 per share, up from ¥100, while maintaining its full-year forecast of moderate sales and profit growth; this combination of earnings momentum, solid balance sheet and enhanced shareholder returns underscores its stable positioning in the construction market and signals continued focus on capital efficiency, including a notable increase in treasury shares.

The most recent analyst rating on (JP:1926) stock is a Buy with a Yen3922.00 price target. To see the full list of analyst forecasts on Raito Kogyo Co., Ltd. stock, see the JP:1926 Stock Forecast page.

Raito Kogyo Announces Treasury Share Cancellation

Raito Kogyo Co., Ltd. has announced the completion of its treasury share purchases and the subsequent cancellation of 2,497,100 common shares, which represents 5.49% of its total shares outstanding. This move, scheduled for January 30, 2026, is part of a strategic decision made by the Board of Directors to optimize the company’s capital structure, potentially enhancing shareholder value and market positioning.

The most recent analyst rating on (JP:1926) stock is a Buy with a Yen3631.00 price target. To see the full list of analyst forecasts on Raito Kogyo Co., Ltd. stock, see the JP:1926 Stock Forecast page.