Toabo Corporation (3204) AI Stock Analysis

• Market Cap: ¥4.54B
• Dividend Yield: 2.7%
• Average Volume (3M): 31.49K
• Price to Earnings (P/E): 5.5
• Beta (1Y): 0.25
• Revenue Growth: -3.33%
• EPS Growth: 30.77%
• Country: JP
• Employees: 456
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): 11.06
• Shares Outstanding: 8,940,448
• 10 Day Avg. Volume: 48,790
• 30 Day Avg. Volume: 31,486
• PEG Ratio: 0.11
• Price to Book (P/B): 0.26
• Price to Sales (P/S): 0.19
• P/FCF Ratio: 21.48
• 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: 77 Outperform
• Price Target: ¥582.00 ▲(21.25% Upside)

The score is driven by attractive valuation (low P/E and solid yield) and supportive technical momentum (price above major moving averages with positive MACD). Financial performance is improving, particularly profitability and free cash flow, but the slight revenue decline and higher leverage temper the overall rating.

Positive Factors

Improved Profitability

Net margin rising to 4.3% alongside ROE improving to 6.0% signals lasting operational improvements and more efficient capital use. Sustained margin expansion supports internal reinvestment, dividend capacity and resilience through cycles, strengthening long-term shareholder returns.

Free Cash Flow Turnaround

The shift to positive free cash flow and a 0.71 operating cash flow to net income ratio indicate improved cash conversion and core cash generation. Durable FCF provides flexibility for debt repayment, capex and strategic investments, reducing reliance on external funding over time.

Stable Gross Margin

A consistent gross margin near 19% reflects steady cost control or pricing power in core operations. That stability underpins predictable operating margins, aids long-term planning, and reduces sensitivity to commodity or input volatility, supporting sustainable profitability.

Negative Factors

Slight Revenue Decline

A modest top-line contraction of ~3.3% erodes scale benefits and can pressure long-term margin expansion if persistent. Sustained revenue weakness may reflect demand or market-share challenges, limiting reinvestment capacity and slowing structural earnings and cash-flow improvement.

Relatively High Leverage

A near-1.0 debt-to-equity ratio implies material financial leverage, which raises fixed obligations and reduces flexibility. In adverse conditions higher interest or refinancing risk could constrain capex, acquisitions and dividend policy, increasing long-term financial vulnerability.

Limited Free Cash After Capex

A low FCF-to-net-income ratio (~0.21) means much reported profit is not immediately available after investment needs. This limits capacity for debt reduction, strategic M&A, or higher shareholder returns unless cash conversion improves, constraining durable financial flexibility.

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

Profitability improved (net margin up to 4.3% in 2024; ROE up to 6.0%) and free cash flow turned positive, indicating better operating performance. Offsetting this are a slight revenue decline and relatively high leverage (debt-to-equity ~0.96), which increases risk.

Income Statement

Toabo Corporation's income statement shows a stable gross profit margin of around 19% over recent years, indicating consistent cost management. The net profit margin improved significantly to 4.3% in 2024 from 3.0% in 2023, reflecting enhanced profitability. However, revenue has decreased slightly from 2023 to 2024, which could be a potential concern. Overall, the company's EBIT and EBITDA margins show a modest upward trend, signaling operational efficiency.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of roughly 0.96, indicating a balanced use of debt and equity financing. Return on Equity (ROE) improved to 6.0% in 2024 from 4.6% in 2023, suggesting better utilization of shareholder funds. The equity ratio stands at a solid 38.5%, which is a positive indicator of financial stability. However, the total debt level remains high, posing a potential risk if market conditions worsen.

Cash Flow

Toabo Corporation's cash flow statement shows a significant improvement in free cash flow from negative in 2023 to positive in 2024, highlighting enhanced cash generation capabilities. The operating cash flow to net income ratio stands at 0.71, indicating good cash conversion efficiency. Despite this, the free cash flow to net income ratio is relatively low at 0.21, suggesting limited cash available after capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	18.43B	18.42B	19.04B	17.00B	15.53B	14.75B
Gross Profit	3.79B	3.61B	3.62B	3.18B	2.95B	2.80B
EBITDA	1.64B	1.13B	1.00B	923.00M	819.00M	645.00M
Net Income	789.00M	799.00M	573.00M	269.00M	258.00M	184.00M
Balance Sheet
Total Assets	34.97B	34.84B	34.45B	32.91B	31.49B	31.25B
Cash, Cash Equivalents and Short-Term Investments	1.72B	2.40B	2.47B	2.46B	2.58B	2.66B
Total Debt	12.79B	12.87B	12.90B	12.25B	11.78B	12.38B
Total Liabilities	21.49B	21.42B	21.92B	21.17B	20.12B	20.43B
Stockholders Equity	13.48B	13.42B	12.53B	11.74B	11.36B	10.81B
Cash Flow
Free Cash Flow	0.00	164.00M	-160.00M	-505.00M	376.00M	-410.00M
Operating Cash Flow	0.00	571.00M	414.00M	492.00M	664.00M	-68.00M
Investing Cash Flow	0.00	-157.00M	-597.00M	-1.13B	-217.00M	-199.00M
Financing Cash Flow	0.00	-229.00M	230.00M	336.00M	-692.00M	928.00M

Toabo Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 480.00
• 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:3204, the sentiment is Positive. The current price of 480 is below the 20-day moving average (MA) of 494.35, below the 50-day MA of 480.12, and above the 200-day MA of 431.03, indicating a bullish trend. The MACD of 6.17 indicates Positive momentum. The RSI at 57.85 is Neutral, neither overbought nor oversold. The STOCH value of 56.46 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
3204	77 Outperform	¥4.54B	5.47	―	2.70%	-3.33%	30.77%
8157	75 Outperform	¥62.06B	10.76	―	2.82%	-5.63%	52.73%
7795	73 Outperform	¥10.35B	7.96	―	3.79%	6.83%	41.94%
7509	73 Outperform	¥6.20B	4.80	―	3.35%	7.25%	-11.62%
7571	68 Neutral	¥3.91B	32.43	―	0.93%	2.95%	―
3696	64 Neutral	¥21.53B	6.93	―	2.88%	10.23%	152.86%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%