NAFCO Co., Ltd. (2790) AI Stock Analysis

• Market Cap: €55.41B
• Dividend Yield: 2.87%
• Average Volume (3M): 9.02K
• Price to Earnings (P/E): 81.4
• Beta (1Y): 0.52
• Revenue Growth: -6.21%
• EPS Growth: -29.75%
• Country: JP
• Employees: 1,324
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Home Improvement
• EPS (TTM): 1.91
• Shares Outstanding: 29,784,400
• 10 Day Avg. Volume: 8,530
• 30 Day Avg. Volume: 9,020
• PEG Ratio: -2.76
• Price to Book (P/B): 0.31
• Price to Sales (P/S): 0.26
• P/FCF Ratio: -7.47
• 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: 55 Neutral
• Price Target: ¥2,019.00 ▲(0.00% Upside)

NAFCO Co., Ltd. is currently facing significant financial challenges, with declining revenues and negative cash flows impacting its financial health. The technical indicators suggest a neutral to bearish outlook, while the negative P/E ratio raises valuation concerns. The dividend yield offers some compensation to investors, but overall, the stock is under pressure due to operational and financial inefficiencies.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage provides financial stability and flexibility, allowing NAFCO to invest in growth opportunities and weather economic downturns.

Diversified Revenue Streams

Diversified revenue streams reduce dependency on a single market, enhancing resilience against sector-specific downturns and supporting long-term revenue stability.

Commitment to Innovation

Investment in R&D fosters innovation, potentially leading to new product offerings and competitive advantages, driving future growth and market leadership.

Negative Factors

Declining Revenue

Declining revenue indicates potential market share loss or reduced demand, posing challenges to growth and profitability if not addressed strategically.

Negative Cash Flows

Negative cash flows highlight operational inefficiencies and liquidity risks, which could constrain the company's ability to fund operations and growth initiatives.

Decreasing Profit Margins

Decreasing profit margins suggest challenges in cost management and pricing power, potentially impacting long-term profitability and shareholder returns.

NAFCO Co., Ltd. Business Overview & Revenue Model

Company Description

NAFCO Co., Ltd. operates a chain of home and furniture retail outlets in Japan. The company's furniture/home fashion stores offer kitchen and dining, living room, bed and bedroom, study room, and wedding gift furniture; and bedding products, small furniture, and other items. It also operates home centers that offer DIY hardware, gardening products, exterior and interior furnishings, automobile accessories, and pet goods. In addition, the company operates combination stores that provide general furniture, interior and furnishings, DIY hardware, gardening merchandise, automobile and car accessories, and pet goods. As of March 31, 2022, it operated 359 stores. The company was founded in 1947 and is headquartered in Kitakyushu, Japan.

How the Company Makes Money

NAFCO generates revenue through a diversified business model that includes the sale of industrial materials, chemical products, and specialized solutions. The company has established key revenue streams from its core product offerings, which are sold to various sectors including construction and manufacturing. Additionally, NAFCO benefits from long-term contracts with major clients, which provide stable income. Strategic partnerships with other industry players and suppliers further enhance its market presence and revenue potential. The company also invests in research and development to innovate new products, which can create additional income opportunities through enhanced offerings.

NAFCO Co., Ltd. Financial Statement Overview

Summary

NAFCO Co., Ltd. is facing declining revenues and profitability, with significant challenges in operational efficiency and cash flow generation. Despite a strong balance sheet with low leverage, the negative operating and free cash flows in 2025 highlight potential liquidity issues.

Income Statement

NAFCO Co., Ltd. has experienced declining revenue over recent years, with total revenue decreasing from ¥234.58 billion in 2021 to ¥181.85 billion in 2025. The gross profit margin for 2025 is approximately 34.15%, indicating reasonable profitability within the industry. However, the net profit margin has decreased significantly to around 0.10% in 2025, reflecting reduced net income. The declining EBIT and EBITDA margins highlight challenges in operational efficiency and profit generation.

Balance Sheet

The company's balance sheet shows a stable equity position, with a debt-to-equity ratio of 0.16 in 2025, which is quite conservative. The return on equity (ROE) has been decreasing, indicating lower profitability from shareholders' investments, standing at approximately 0.12% in 2025. The equity ratio remains healthy at about 68.36%, suggesting a strong reliance on equity over debt for financing.

Cash Flow

NAFCO Co., Ltd. has faced a significant decline in operating cash flow, turning negative in 2025 at -¥709 million, reflecting operational challenges. Free cash flow has also turned negative in 2025, indicating potential liquidity issues. The free cash flow to net income ratio is negative, showing inefficiencies in cash generation from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	180.22B	181.85B	192.45B	202.64B	206.88B	234.58B
Gross Profit	62.02B	62.11B	65.39B	69.96B	72.14B	80.73B
EBITDA	6.81B	7.10B	11.00B	14.98B	18.43B	24.66B
Net Income	-14.00M	183.00M	3.11B	5.64B	7.96B	11.69B
Balance Sheet
Total Assets	225.39B	225.19B	232.25B	238.41B	233.07B	236.16B
Cash, Cash Equivalents and Short-Term Investments	18.88B	18.50B	33.00B	36.12B	34.11B	40.98B
Total Debt	23.17B	27.65B	26.53B	26.40B	26.00B	26.71B
Total Liabilities	71.38B	71.24B	72.89B	76.60B	75.31B	83.34B
Stockholders Equity	154.01B	153.96B	159.36B	161.81B	157.76B	152.82B
Cash Flow
Free Cash Flow	0.00	-6.34B	4.14B	6.47B	-2.38B	20.82B
Operating Cash Flow	0.00	-709.00M	9.17B	9.66B	1.18B	24.78B
Investing Cash Flow	0.00	-5.95B	-4.93B	-3.43B	-3.50B	-3.50B
Financing Cash Flow	0.00	-7.84B	-7.36B	-4.22B	-4.56B	-4.49B

NAFCO Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2019.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2790, the sentiment is Positive. The current price of 2019 is above the 20-day moving average (MA) of 1970.25, above the 50-day MA of 1988.50, and above the 200-day MA of 1848.21, indicating a bullish trend. The MACD of 4.57 indicates Negative momentum. The RSI at 56.90 is Neutral, neither overbought nor oversold. The STOCH value of 74.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2790.

NAFCO Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3191	68 Neutral	¥122.10B	15.28	―	2.98%	0.73%	-9.78%
8218	67 Neutral	¥169.77B	11.29	―	1.61%	1.69%	3.90%
7516	67 Neutral	¥123.80B	8.22	―	2.92%	3.83%	7.24%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3199	58 Neutral	¥29.82B	14.88	―	1.68%	1.84%	-14.00%
2790	55 Neutral	€55.41B	81.39	0.41%	2.87%	-6.21%	-29.75%
7450	48 Neutral	¥10.67B	-5.05	―	0.50%	-0.60%	-386.40%