Sato Foods Co., Ltd. (2923) AI Stock Analysis

• Market Cap: ¥37.48B
• Dividend Yield: 0.8%
• Average Volume (3M): 6.26K
• Price to Earnings (P/E): 11.8
• Beta (1Y): 0.23
• Revenue Growth: 8.19%
• EPS Growth: 42.84%
• Country: JP
• Employees: 631
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 167.96
• Shares Outstanding: 5,075,500
• 10 Day Avg. Volume: 2,740
• 30 Day Avg. Volume: 6,256
• PEG Ratio: -1.27
• Price to Book (P/B): 1.65
• Price to Sales (P/S): 0.80
• P/FCF Ratio: -146.15
• 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: 62 Neutral
• Price Target: ¥7,780.00 ▲(6.72% Upside)

Sato Foods Co., Ltd. has a stable financial foundation with solid revenue growth and operational efficiency. However, the stock faces challenges with profitability margins, increased debt reliance, and negative free cash flow. Technical indicators suggest bearish momentum, while valuation metrics indicate the stock is reasonably priced. The lack of earnings call and corporate events data limits further insights.

Positive Factors

Consistent Revenue Growth

Sato Foods' recurring revenue expansion demonstrates steady end-market demand and increasing product adoption across channels. Over 2-6 months this supports scale benefits, predictable top-line that can fund incremental investment, absorb cost shocks and underpin strategic initiatives.

Healthy Gross Margin & Stable Operating Margins

A roughly 24.7% gross margin and stable EBIT/EBITDA margins indicate durable pricing power and operational control in production. This margin base supports reinvestment and resilience to input cost volatility, helping preserve profitability over the medium term.

Diversified Channels & Distribution Partnerships

Broad retailer, foodservice and industrial distribution plus major supermarket partnerships create diversified revenue streams and scale economics. This structural market access enhances bargaining power, steadier demand and lowers per-unit costs, strengthening long-term competitive positioning.

Negative Factors

Higher Leverage

An elevated D/E of 0.83 raises financing risk and reduces balance sheet flexibility. Over months, higher interest or refinancing needs could constrain capital allocation, amplify earnings sensitivity to rates, and limit the firm's ability to fund growth or deleverage quickly.

Negative Free Cash Flow

Persistent negative free cash flow, despite better operating cash generation, suggests heavy capex or working capital strain. This restricts capacity to repay debt, invest organically or return capital, making financing and operational choices more constrained over the medium term.

Declining Net Profit Margin and ROE

Falling net margin and lower ROE point to weakening profitability on shareholder capital. Over 2-6 months this reduces internal funding for growth, weakens returns expectations and magnifies the impact of leverage and cash flow issues on long-term financial health.

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

Company Description

Sato Foods Co., Ltd. produces and sells packaged mochi rice cakes and packaged cooked rice in Japan. It offers products under the Sato no Gohan, Kirimochi, and Usagimochi brands. The company was founded in 1950 and is headquartered in Niigata, Japan.

How the Company Makes Money

Sato Foods Co., Ltd. generates revenue through multiple streams, primarily from the sale of its processed and frozen food products to retailers, wholesalers, and food service operators. The company has established significant partnerships with major supermarket chains and distributors, enhancing its market reach and product visibility. Additionally, Sato Foods capitalizes on the growing demand for convenience food by expanding its ready-to-eat meals segment. The company also benefits from economies of scale in production and supply chain efficiencies, which contribute to its profitability. Furthermore, Sato Foods invests in product development and marketing to strengthen brand loyalty and attract new customers, ultimately driving sales growth.

Sato Foods Co., Ltd. Financial Statement Overview

Summary

Sato Foods Co., Ltd. shows solid revenue growth and operational efficiency. However, challenges include decreased profitability margins, increased debt reliance, and negative free cash flow, indicating the need for improved capital management.

Income Statement

Sato Foods Co., Ltd. has shown consistent revenue growth over the years, with a 3.2% increase in the most recent year. The gross profit margin remains healthy at around 24.7%, although it has slightly decreased from previous years. Net profit margin has decreased to 4.2% from 5.4% the previous year, indicating some pressure on profitability. EBIT and EBITDA margins are stable, reflecting efficient operational management.

Balance Sheet

The company's debt-to-equity ratio has increased to 0.83, indicating a higher reliance on debt financing, which could pose a risk if not managed carefully. Return on equity has decreased to 8.7%, suggesting a decline in profitability relative to shareholder equity. The equity ratio remains stable, indicating a balanced asset structure.

Cash Flow

Operating cash flow has improved significantly, but free cash flow remains negative, which is a concern. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to net income. However, the negative free cash flow to net income ratio highlights potential challenges in managing capital expenditures and investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	47.87B	46.48B	42.58B	39.67B	39.05B	46.94B
Gross Profit	12.36B	11.50B	11.16B	10.01B	10.42B	19.04B
EBITDA	6.29B	6.00B	5.43B	4.88B	4.99B	4.30B
Net Income	2.85B	1.95B	2.30B	1.84B	1.94B	1.49B
Balance Sheet
Total Assets	46.69B	48.84B	43.74B	39.27B	36.35B	31.76B
Cash, Cash Equivalents and Short-Term Investments	1.90B	4.87B	2.67B	3.48B	1.67B	359.59M
Total Debt	16.70B	18.56B	15.68B	14.16B	12.18B	10.07B
Total Liabilities	23.66B	26.36B	23.15B	21.01B	19.87B	16.89B
Stockholders Equity	23.04B	22.48B	20.59B	18.26B	16.48B	14.87B
Cash Flow
Free Cash Flow	0.00	-254.34M	-1.93B	393.62M	-398.92M	2.76B
Operating Cash Flow	0.00	4.92B	2.16B	3.04B	1.60B	4.85B
Investing Cash Flow	0.00	-5.12B	-4.12B	-2.88B	-2.09B	-2.17B
Financing Cash Flow	0.00	2.41B	1.15B	1.65B	1.80B	-2.63B

Sato Foods Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7290.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2923, the sentiment is Negative. The current price of 7290 is below the 20-day moving average (MA) of 7451.00, below the 50-day MA of 7678.20, and below the 200-day MA of 7712.03, indicating a bearish trend. The MACD of -57.18 indicates Negative momentum. The RSI at 44.75 is Neutral, neither overbought nor oversold. The STOCH value of 30.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:2923.

Sato Foods Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2918	73 Outperform	¥61.13B	12.37	―	3.20%	4.98%	-10.23%
2915	72 Outperform	¥33.36B	12.40	―	2.23%	-0.25%	-41.09%
2831	64 Neutral	¥31.95B	12.80	―	1.96%	0.16%	10.88%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
2923	62 Neutral	¥37.48B	11.82	―	0.80%	8.19%	42.84%
3139	59 Neutral	¥35.94B	8.25	―	3.84%	6.49%	31.81%
2910	46 Neutral	¥37.17B	304.97	―	1.65%	-1.17%	-84.81%