Toabo Corporation (3204) AI Stock Analysis

• Market Cap: ¥4.71B
• Dividend Yield: 2.7%
• Average Volume (3M): 31.49K
• Price to Earnings (P/E): 7.3
• Beta (1Y): 0.29
• Revenue Growth: -3.33%
• EPS Growth: 30.77%
• Country: JP
• Employees: 456
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): 34.80
• Shares Outstanding: 8,940,448
• 10 Day Avg. Volume: 48,790
• 30 Day Avg. Volume: 31,486
• PEG Ratio: -0.36
• Price to Book (P/B): 0.30
• Price to Sales (P/S): 0.24
• P/FCF Ratio: 6.21
• 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: 66 Neutral
• Price Target: ¥552.00 ▲(15.00% Upside)
• Action: Downgraded Date: 02/18/26
• Date: Action: Downgraded 02/18/26

The score is driven by attractive valuation (low P/E with a dividend) and supportive technical momentum (price above key moving averages with positive MACD). These positives are tempered by only mid-tier financial quality due to recent revenue declines and uneven cash-flow conversion despite improving profitability and gradually declining leverage.

Positive Factors

Improving net margin

Net margin has risen to about 3.7% in 2025 after weaker years, indicating structural improvement in profitability. Sustained margin expansion enhances internal cash generation, supports reinvestment and dividends, and provides a larger buffer against demand shocks over the next several quarters.

Deleveraging trend

Leverage has meaningfully declined over several years, reflecting capital retention or debt paydown. A continued downward trend in debt-to-equity improves financial flexibility, lowers interest burden, and increases capacity for strategic investments or opportunistic M&A over a multi-quarter horizon.

Recent positive free cash flow

Free cash flow turned positive in the last two years and approached ~66% of net income, showing improving cash conversion. Durable positive FCF supports capital expenditure, dividend payouts and further debt reduction, strengthening balance sheet resilience over the medium term.

Negative Factors

Declining revenue trend

Top-line contraction across consecutive years reduces scale and can erode operating leverage. Persistent revenue declines constrain margin expansion, limit reinvestment capacity, and make profitability gains more fragile if demand or pricing pressure persists over the next several quarters.

Volatile cash generation

Historical swings between negative and positive free cash flow signal inconsistent cash conversion. That volatility elevates funding and execution risk for capex, dividends or deleveraging plans, and means recent FCF improvement may not be fully reliable without structural changes to working capital or earnings quality.

Modest returns on capital

ROE near mid-single digits and low single-digit operating margins indicate limited ability to generate high shareholder returns. Modest returns constrain reinvestment payoff and reduce the margin for error in downturns, making sustained value creation more challenging absent material operational improvement.

Toabo Corporation Business Overview & Revenue Model

Company Description

Toabo Corporation manufactures and sells textiles in Japan and internationally. It offers fabrics, suits, uniforms, and wool products. The company is also involved in the manufacture of fine chemicals used in electronic materials and healthcare-related fields; electronic products for use in the field of power tools, vacuum cleaners, home appliances, industrial equipment, and OA equipment; and automotive interior, wastewater treatment, civil engineering, and greening materials. In addition, it leases offices, commercial complexes, and factory sites, as well as engages in driving school businesses. Toabo Corporation was founded in 1922 and is headquartered in Osaka, Japan.

How the Company Makes Money

Toabo Corporation generates revenue through a multi-faceted business model that includes direct sales of its precision machinery and components, as well as service contracts for maintenance and support. A significant portion of the company's earnings comes from long-term contracts with major manufacturers in the automotive and aerospace sectors, where reliability and precision are paramount. Additionally, Toabo has established strategic partnerships with various industry leaders, allowing for joint ventures and collaborative projects that enhance its market reach and product offerings. The company also invests in research and development to innovate and expand its product line, leading to new revenue opportunities in emerging markets.

Toabo Corporation Financial Statement Overview

Summary

Mid-tier fundamentals: profitability has improved (net margin ~3.7% in 2025) and leverage is trending down (debt-to-equity ~0.83x), but revenue has declined in 2024–2025 and cash-flow quality is below average with historically volatile/negative free cash flow.

Income Statement

Revenue has softened recently (down in 2024 and 2025), following a stronger 2022–2023 period. Profitability is steady-to-improving versus earlier years, with gross margin around ~19–20% and net margin improving to ~3.7% in 2025 (from ~1–2% in 2020–2022). Operating profitability remains modest (EBIT margin low-single-digits), so earnings are positive but not highly resilient if demand weakens further.

Balance Sheet

Leverage has improved but remains meaningful: debt-to-equity moved down from ~1.14x (2020) to ~0.83x (2025), supported by rising equity. Returns on equity are moderate (~4.7% in 2025; ~6.0% in 2024), indicating the balance sheet is not generating especially strong shareholder returns. Overall, the balance sheet trend is constructive, but leverage is still a key constraint.

Cash Flow

Cash generation is volatile. Operating cash flow is positive in most years but was negative in 2020, and free cash flow has swung between positive and negative (negative in 2022 and 2023, then recovering to positive in 2024 and 2025). The latest year shows improved free cash flow (about two-thirds of net income), but cash conversion from operations remains relatively weak versus the earnings base, keeping cash-flow quality below average.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	18.43B	17.47B	18.42B	19.04B	17.00B	15.53B
Gross Profit	3.79B	3.58B	3.61B	3.62B	3.18B	2.95B
EBITDA	1.64B	1.03B	1.13B	1.00B	923.00M	819.00M
Net Income	789.00M	655.00M	799.00M	573.00M	269.00M	258.00M
Balance Sheet
Total Assets	34.97B	34.31B	34.84B	34.45B	32.91B	31.49B
Cash, Cash Equivalents and Short-Term Investments	1.72B	1.97B	2.40B	2.47B	2.46B	2.58B
Total Debt	12.79B	11.65B	12.87B	12.90B	12.25B	11.78B
Total Liabilities	21.49B	20.33B	21.42B	21.92B	21.17B	20.12B
Stockholders Equity	13.48B	13.97B	13.42B	12.53B	11.74B	11.36B
Cash Flow
Free Cash Flow	0.00	681.00M	164.00M	-160.00M	-505.00M	376.00M
Operating Cash Flow	0.00	1.01B	571.00M	414.00M	492.00M	664.00M
Investing Cash Flow	0.00	73.00M	-157.00M	-597.00M	-1.13B	-217.00M
Financing Cash Flow	0.00	-1.33B	-229.00M	230.00M	336.00M	-692.00M

Toabo Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 480.00
• 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:3204, the sentiment is Positive. The current price of 480 is below the 20-day moving average (MA) of 518.55, below the 50-day MA of 498.23, and above the 200-day MA of 442.75, indicating a bullish trend. The MACD of 10.78 indicates Negative momentum. The RSI at 64.36 is Neutral, neither overbought nor oversold. The STOCH value of 79.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3204.

Toabo Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4241	73 Outperform	¥3.77B	30.00	―	1.87%	1.62%	―
5355	72 Outperform	¥4.44B	9.99	―	2.79%	3.32%	18.84%
3306	67 Neutral	¥3.12B	5.31	―	0.59%	-27.54%	253.34%
3512	67 Neutral	¥15.76B	31.07	―	2.41%	-4.23%	-5.96%
3204	66 Neutral	¥4.71B	7.32	―	2.70%	-3.33%	30.77%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
9849	47 Neutral	¥3.09B	478.33	―	1.10%	1.67%	15.59%