Autowave Co., Ltd. (2666) AI Stock Analysis

• Market Cap: ¥2.51B
• Dividend Yield: 1.92%
• Average Volume (3M): 63.26K
• Price to Earnings (P/E): 8.2
• Beta (1Y): 0.36
• Revenue Growth: 11.96%
• EPS Growth: 30.75%
• Country: JP
• Employees: 201
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 3.66
• Shares Outstanding: 14,451,000
• 10 Day Avg. Volume: 64,400
• 30 Day Avg. Volume: 63,256
• PEG Ratio: 3.72
• Price to Book (P/B): 0.52
• Price to Sales (P/S): 0.24
• P/FCF Ratio: 15.68
• 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: ¥187.00 ▲(16.88% Upside)

The overall stock score is primarily driven by a strong valuation, indicating potential undervaluation with a low P/E ratio and reasonable dividend yield. Financial performance shows solid revenue growth and improved leverage, though profitability and cash flow efficiency could be enhanced. Technical analysis indicates bearish momentum, which slightly offsets the positive valuation and financial performance.

Positive Factors

Revenue Growth

Sustained top-line growth (~12% reported revenue growth and a five‑year increase to ¥8,871m) signals durable market demand and execution. Over the next 2–6 months this underpins scaling benefits, supports operating leverage and provides a firmer base for margin recovery and reinvestment.

Improved Leverage / Stronger Equity Base

Material reduction in leverage and a c.55% equity ratio meaningfully lowers financial risk and interest exposure. This increases flexibility for capital allocation, cushions against downturns, and permits strategic investments or opportunistic moves without immediate refinancing pressure over the medium term.

Stable Gross Margins and Operational Efficiency

Stable gross margins and steady EBITDA/EBIT margins reflect enduring cost controls and operational discipline in specialty retail. This consistency supports predictable operating cash generation, helps absorb input cost swings, and sustains core profitability while management pursues efficiency gains.

Negative Factors

Low Net Profit Margin

A ~3% net margin constrains the company’s ability to convert revenue growth into shareholder returns or to self‑fund expansion. Persistently low net profitability limits ROE improvement potential and makes the company more vulnerable to margin erosion from cost inflation or competitive pricing pressure.

Declining Free Cash Flow Efficiency

A sharp drop in FCF-to-net-income signals weaker cash conversion and reduced cash cushions. If this trend persists it will constrain organic investment, dividend policy or debt reduction, forcing tougher tradeoffs on capex and working capital management over the coming months.

Modest Return on Equity

An ROE of ~6–7% indicates only modest returns on shareholder capital. With a stronger equity base, improving shareholder value will require either material margin expansion or higher asset turnover; absent that, ROE limits the company’s appeal for investors seeking higher long‑term returns.

Autowave Co., Ltd. Business Overview & Revenue Model

Company Description

AUTOWAVE Co., Ltd. engages in the sales of automobile supplies and related services in Japan. The company offers tires and wheels, vehicle inspection/sheet metal, oil batteries, and other car supplies. It also offers car navigation, rear monitor, back camera, and terrestrial digital tuner. In addition, the company sells and installs speakers, woofers, and power amplifiers. Further, it provides body coat, car film, window glass water repellent coat, wheel coat, headlight coat, and safety products, as well as purchases and sells new and used cars. AUTOWAVE Co., Ltd. was incorporated in 1960 and is headquartered in Chiba, Japan.

How the Company Makes Money

Autowave Co., Ltd. generates revenue through multiple streams, primarily by selling automotive electronic components and software to automotive manufacturers and suppliers. The company has established key partnerships with major automotive OEMs (Original Equipment Manufacturers) and Tier 1 suppliers, allowing it to secure long-term contracts and consistent orders. Additionally, Autowave offers research and development services, which provide another revenue stream by creating tailored solutions for clients. The growing trend towards electric vehicles and autonomous driving technologies further contributes to its earnings, as demand for its innovative products continues to rise in response to industry advancements.

Autowave Co., Ltd. Financial Statement Overview

Summary

Autowave Co., Ltd. demonstrates solid revenue growth and improved leverage ratios. The company maintains operational efficiency with stable gross margins, though net profitability could be enhanced. The balance sheet shows a stronger equity position, reducing financial risk. Cash flow remains stable, though recent declines in Free Cash Flow suggest the need for improved cash efficiency.

Income Statement

Autowave Co., Ltd. has demonstrated steady revenue growth with an increase from 7,063 million to 8,871 million over the past five years. The Gross Profit Margin has been stable around 31-32%, indicating efficient cost management. However, the Net Profit Margin remains modest at approximately 3%, suggesting room for improvement in net profitability. EBIT and EBITDA margins are consistent, showing operational efficiency. The company shows a positive revenue growth trajectory, but profitability margins indicate potential areas for enhancement.

Balance Sheet

The company's Debt-to-Equity Ratio has improved over the years, moving from 0.88 to 0.38, indicating reduced leverage and financial risk. Return on Equity (ROE) is stable around 6-7%, reflecting moderate profitability for shareholders. The Equity Ratio has increased to about 55%, enhancing asset financing through equity rather than debt. While the balance sheet shows strengthened equity positions, there is still potential risk in terms of the overall low ROE.

Cash Flow

Operating Cash Flow has shown fluctuations but remains positive, indicating good cash generation from operations. Free Cash Flow has declined in the latest year, with a reduction in Free Cash Flow to Net Income Ratio from 1.74 to 0.51, suggesting decreased cash efficiency. The Operating Cash Flow to Net Income Ratio remains above 1, indicating solid cash flow relative to net income. The cash flow statement indicates stability with some room for improvement in Free Cash Flow generation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.87B	8.42B	7.99B	7.42B	7.06B
Gross Profit	2.78B	2.60B	2.68B	2.41B	2.35B
EBITDA	623.33M	668.83M	645.61M	492.14M	454.16M
Net Income	268.75M	263.13M	259.57M	141.06M	142.04M
Balance Sheet
Total Assets	7.52B	7.40B	7.46B	7.57B	8.03B
Cash, Cash Equivalents and Short-Term Investments	529.69M	650.70M	606.74M	764.18M	1.13B
Total Debt	1.58B	1.78B	1.98B	2.23B	2.83B
Total Liabilities	3.38B	3.49B	3.78B	4.12B	4.68B
Stockholders Equity	4.14B	3.91B	3.68B	3.45B	3.35B
Cash Flow
Free Cash Flow	136.41M	396.95M	207.97M	367.55M	458.84M
Operating Cash Flow	325.10M	537.51M	367.75M	560.33M	571.10M
Investing Cash Flow	-203.26M	-260.97M	-245.65M	-292.09M	-186.81M
Financing Cash Flow	-242.84M	-232.58M	-279.55M	-628.46M	-265.00M

Autowave Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 160.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2666, the sentiment is Positive. The current price of 160 is below the 20-day moving average (MA) of 169.55, below the 50-day MA of 161.92, and above the 200-day MA of 155.58, indicating a bullish trend. The MACD of 2.90 indicates Positive momentum. The RSI at 70.75 is Negative, neither overbought nor oversold. The STOCH value of 61.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2666.

Autowave Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9832	75 Outperform	¥128.67B	13.93	7.75%	3.63%	17.43%	248.12%
2674	74 Outperform	¥28.38B	12.60	―	3.77%	7.88%	-5.92%
2681	69 Neutral	¥73.52B	14.78	―	1.81%	6.48%	-38.41%
2666	67 Neutral	¥2.51B	8.21	―	1.92%	11.96%	30.75%
2751	64 Neutral	¥44.94B	24.83	―	0.26%	15.30%	-15.97%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3059	45 Neutral	¥4.06B	-4.66	―	2.40%	-3.69%	-11429.88%