Sato Foods Industries Co., Ltd. (2814) AI Stock Analysis

• Market Cap: ¥13.57B
• Dividend Yield: 1.19%
• Average Volume (3M): 3.52K
• Price to Earnings (P/E): 19.2
• Beta (1Y): 0.25
• Revenue Growth: 6.33%
• EPS Growth: -0.77%
• Country: JP
• Employees: 164
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 62.62
• Shares Outstanding: 8,885,206
• 10 Day Avg. Volume: 5,740
• 30 Day Avg. Volume: 3,523
• PEG Ratio: -0.80
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 1.41
• P/FCF Ratio: 13.49
• 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: 65 Neutral
• Price Target: ¥3,531.00 ▲(9.15% Upside)
• Action: Reiterated Date: 11/01/25
• Date: Action: Reiterated 11/01/25

Sato Foods Industries Co., Ltd. demonstrates strong financial stability and operational efficiency, which are significant strengths. However, the technical indicators suggest a neutral to slightly bearish short-term outlook. The valuation is reasonable, with a moderate P/E ratio and a modest dividend yield. The absence of recent earnings call data and corporate events limits additional insights.

Positive Factors

Balance sheet strength

An extremely low debt-to-equity ratio and a 91.17% equity ratio provide substantial financial flexibility. This conservative capital structure lowers solvency risk, supports investment capacity and supplier/creditor standing, and helps the business endure economic cycles without heavy external borrowing.

Margin durability

Healthy gross and EBIT margins indicate efficient manufacturing, scale in packaged rice products and effective cost controls. Durable mid-teens plus gross and double-digit EBIT margins create a buffer against commodity swings and support reinvestment in quality, distribution and product improvement over time.

Steady revenue and cash conversion

Modest but consistent revenue growth coupled with operating cash flow exceeding net income shows reliable cash conversion. This persistent cash generation supports working capital, routine capex and dividend capacity, enabling operational continuity and strategic reinvestment without immediate dependence on external finance.

Negative Factors

Low return on equity

ROE at roughly 3% indicates the company generates limited returns from its equity base despite a strong capital position. Persistently low ROE can impair long-term shareholder value creation and suggests the firm may struggle to translate its conservative balance sheet into higher growth or profitability without improving operational efficiency or pricing power.

Weakening free cash flow growth

A steep 38.5% decline in free cash flow growth materially reduces internal funding for capex, product development and shareholder returns. If this trend persists it limits strategic flexibility, could force greater reliance on retained earnings or external financing, and constrains capacity to pursue growth initiatives.

Net margin compression

A falling net profit margin to 9.38% erodes bottom-line profitability relative to gross and EBIT margins, implying rising non-operating costs, taxes or inefficiencies. Continued net margin pressure would reduce retained earnings and the ability to sustainably fund dividends, R&D or marketing investments.

Sato Foods Industries Co., Ltd. Business Overview & Revenue Model

Company Description

Sato Foods Industries Co., Ltd. engages in manufacture and sale of tea extracts, plant extracts, naturally derived flavorings, and powdered alcohol in Japan and internationally. Its powdered alcohol is used in snacks, premixes, drinks, soups, processed seafood and livestock foods, prepared meals, pickles, foods boiled in soy sauce, processed agricultural foods, etc.; and plant extracts are used in fruit juice powders, vegetable powders, and coffee extracts. The company's powdered tea extracts are used in instant teas, tea machines and cup vending machines, health foods, cakes, and various types of general food processing; and naturally derived flavorings are used in noodle broths, sauces, soups, dressings, Chinese noodles, snacks, oden, pickles, prepared dishes, etc. Sato Foods Industries Co., Ltd. was founded in 1950 and is headquartered in Komaki, Japan.

How the Company Makes Money

Sato Foods Industries generates revenue primarily through the sale of its food products, which include a variety of sauces, seasonings, and convenience meals. The company markets its products to both domestic and international customers, leveraging distribution agreements with retailers and food service providers. Key revenue streams include direct sales to supermarkets, online platforms, and partnerships with restaurants and catering services. Additionally, Sato Foods may benefit from brand loyalty and repeat purchases, as well as potential collaborations with other food brands that enhance its market presence and product offerings.

Sato Foods Industries Co., Ltd. Financial Statement Overview

Summary

Sato Foods Industries Co., Ltd. showcases strong operational efficiency and financial stability with low leverage and robust equity ratios. While profitability metrics have room for improvement, the company's steady revenue growth and consistent cash generation provide a solid foundation for future growth. Attention to enhancing net income and free cash flow is recommended to further strengthen financial health.

Income Statement

The company demonstrates a strong gross profit margin (25.42%) and EBIT margin (10.58%), indicating cost efficiency and effective operations. However, the net profit margin has decreased to 9.38%, reflecting a decline in profitability. Revenue growth is modest at 4.25%, showing steady, albeit slow, expansion.

Balance Sheet

Sato Foods maintains a robust balance sheet with a low debt-to-equity ratio of 0.03, highlighting financial stability. The equity ratio stands at 91.17%, which underscores strong equity financing. However, ROE has decreased to 3.09%, suggesting room for improvement in profitability relative to equity.

Cash Flow

The cash flow statement reveals a decline in free cash flow growth, down by 38.52%. The operating cash flow to net income ratio is 1.55, indicating strong cash generation relative to earnings. However, the free cash flow to net income ratio of 1.11 suggests potential constraints in free cash flow growth.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	6.56B	6.36B	6.10B	5.88B	5.64B	6.08B
Gross Profit	1.65B	1.63B	1.54B	1.52B	1.64B	1.53B
EBITDA	1.07B	1.16B	1.20B	629.60M	1.12B	1.17B
Net Income	676.00M	596.43M	773.22M	384.74M	727.94M	292.59M
Balance Sheet
Total Assets	21.60B	21.16B	21.85B	20.49B	20.32B	20.05B
Cash, Cash Equivalents and Short-Term Investments	8.91B	9.72B	9.86B	9.01B	9.18B	8.75B
Total Debt	670.00M	670.00M	670.00M	670.00M	670.00M	670.00M
Total Liabilities	2.03B	1.87B	2.10B	1.45B	1.58B	1.67B
Stockholders Equity	19.57B	19.29B	19.74B	19.04B	18.74B	18.38B
Cash Flow
Free Cash Flow	0.00	663.21M	1.08B	204.86M	647.56M	1.13B
Operating Cash Flow	0.00	921.97M	1.17B	553.28M	844.39M	1.29B
Investing Cash Flow	0.00	-464.86M	140.87M	-325.52M	-221.19M	-176.09M
Financing Cash Flow	0.00	-597.10M	-449.51M	-404.59M	-187.93M	-197.69M

Sato Foods Industries Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3235.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2814, the sentiment is Positive. The current price of 3235 is above the 20-day moving average (MA) of 3224.00, above the 50-day MA of 3180.85, and above the 200-day MA of 2731.66, indicating a bullish trend. The MACD of 30.16 indicates Negative momentum. The RSI at 62.94 is Neutral, neither overbought nor oversold. The STOCH value of 83.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2814.

Sato Foods Industries Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3392	78 Outperform	¥13.86B	9.32	―	1.43%	10.77%	131.68%
2819	68 Neutral	¥25.46B	15.65	―	1.87%	3.08%	-16.77%
2814	65 Neutral	¥13.57B	19.25	―	1.19%	6.33%	-0.77%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
2923	62 Neutral	¥38.28B	12.29	―	0.80%	8.19%	42.84%
2806	61 Neutral	¥15.05B	32.02	―	1.90%	2.59%	21.25%
2910	46 Neutral	¥37.25B	311.33	―	1.65%	-1.17%	-84.81%