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

• Market Cap: ¥13.35B
• Dividend Yield: 1.19%
• Average Volume (3M): 3.52K
• Price to Earnings (P/E): 16.9
• Beta (1Y): 0.27
• 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: -0.88
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 1.55
• P/FCF Ratio: 14.84
• 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: ¥3,472.00 ▲(7.33% 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

Robust balance sheet

Extremely low leverage and a 91.17% equity ratio provide durable financial resilience. This capital structure reduces refinancing risk, supports funding of seasonal inventory and modest capex, and preserves flexibility to withstand demand swings in the packaged foods market.

Healthy gross and EBIT margins

Strong gross and EBIT margins reflect efficient production and cost control in staple rice-based products. Durable margin levels give the company room to absorb rice price volatility and retail price pressure while maintaining operating profitability across seasonal demand cycles.

Solid cash generation vs. earnings

Operating cash exceeds accounting earnings, indicating good cash conversion and underlying operational cash strength. That cash reliability supports working capital needs, dividend continuity and reinvestment for product or distribution initiatives over the medium term.

Negative Factors

Free cash flow decline

A near 40% drop in free cash flow growth signals deteriorating cash available after investments. This materially constrains capacity for reinvestment, dividend flexibility or buffer for seasonal inventory funding unless FCF trends reverse, creating medium-term financial pressure.

Weak return on equity

ROE at ~3% indicates limited effectiveness in converting equity into shareholder returns. Persistently low ROE can limit investor appetite and implies management must improve operational leverage or margin expansion to generate meaningful long-term shareholder value.

Modest revenue, falling EPS

Slow top-line growth paired with negative EPS growth suggests margin or cost pressures are eroding earnings power. In a low-growth packaged foods market, this combination limits strategic flexibility and could hinder long-term investment in new products or distribution expansion.

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 from the sale of branded packaged food products, with its core revenue streams coming from (1) packaged mochi/rice cake products and (2) packaged cooked rice products. The company makes money by manufacturing these products and selling them through wholesalers and directly/indirectly to retailers (e.g., supermarkets, mass merchandisers, and other consumer retail channels), earning a margin between production costs (raw materials such as rice/glutinous rice, packaging, labor, and factory overhead) and the wholesale/retail selling price. Demand is influenced by seasonal consumption patterns (notably stronger mochi demand around Japan’s year-end/New Year period), product mix (premium vs. value offerings), and distribution reach. Information on specific customer concentration, named partnerships, licensing arrangements, or other non-product income streams is null.

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	1.67B	1.62B	1.53B	1.50B	1.62B	1.51B
EBITDA	965.20M	945.67M	913.92M	856.38M	1.02B	1.08B
Net Income	676.60M	596.43M	773.22M	384.74M	727.94M	292.59M
Balance Sheet
Total Assets	21.60B	21.16B	22.32B	20.90B	20.62B	20.46B
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	2.57B	1.86B	1.88B	2.08B
Stockholders Equity	19.58B	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: Neutral
• Last Price: 3235.00
• 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:2814, the sentiment is Neutral. The current price of 3235 is below the 20-day moving average (MA) of 3236.25, above the 50-day MA of 3192.70, and above the 200-day MA of 2803.95, indicating a neutral trend. The MACD of 13.41 indicates Positive momentum. The RSI at 50.93 is Neutral, neither overbought nor oversold. The STOCH value of 35.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	¥15.95B	12.33	―	1.43%	10.77%	131.68%
2819	68 Neutral	¥23.91B	4.38	―	1.87%	3.08%	-16.77%
2814	65 Neutral	¥13.35B	16.94	―	1.19%	6.33%	-0.77%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
2923	62 Neutral	¥38.89B	4.55	―	0.80%	8.19%	42.84%
2806	61 Neutral	¥14.81B	358.43	―	1.90%	2.59%	21.25%
2910	46 Neutral	¥37.28B	21.75	―	1.65%	-1.17%	-84.81%