TOCALO Co., Ltd. (3433) AI Stock Analysis

• Market Cap: ¥147.22B
• Dividend Yield: 3.39%
• Average Volume (3M): 169.44K
• Price to Earnings (P/E): 16.4
• Beta (1Y): 1.11
• Revenue Growth: 14.21%
• EPS Growth: 29.38%
• Country: JP
• Employees: 1,389
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 33.90
• Shares Outstanding: 61,200,000
• 10 Day Avg. Volume: 202,670
• 30 Day Avg. Volume: 169,436
• PEG Ratio: 0.43
• Price to Book (P/B): 1.63
• Price to Sales (P/S): 1.82
• P/FCF Ratio: 27.78
• 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): 146.45
• Revenue Forecast (FY): ¥57.95B

• Rating: 78 Outperform
• Price Target: ¥3,517.00 ▲(58.14% Upside)
• Action: Reiterated Date: 02/04/26
• Date: Action: Reiterated 02/04/26

The score is primarily driven by strong financial performance: consistent revenue growth, improving margins, and a low-leverage balance sheet supported by solid operating cash flow. Technicals add support via a clear uptrend above major moving averages, but elevated RSI/Stoch indicate the stock may be stretched. Valuation is reasonable with a mid-range P/E and a ~2.9% dividend yield, contributing moderately to the overall score.

Positive Factors

Consistent revenue growth and improving margins

Multi-year top-line growth paired with rising net margins indicates durable demand for TOCALO's surface engineering services and improved operational efficiency. Sustained revenue expansion and margin improvement support reinvestment, stable profitability and stronger returns on capital over the medium term.

Low leverage and high equity ratio

Very low leverage and a high equity ratio provide financial resilience, reducing interest burden and giving flexibility to fund capex or M&A from internal or modest external sources. This structural balance-sheet strength preserves optionality through industry cycles and supports steady strategic execution.

Strong operating cash flow generation

Operating cash flow exceeding reported earnings shows reliable cash conversion from operations, enabling the company to fund working capital, maintenance capex and shareholder returns without heavy new borrowing. Robust OCF underpins long-term liquidity and operational durability.

Negative Factors

Moderate free cash flow conversion

Free cash flow materially below net income suggests significant capex or working capital absorption relative to earnings. That limits internally available funds for growth initiatives, larger dividends or acquisitions, constraining strategic flexibility over the medium term unless conversion improves.

Rising total liabilities require monitoring

Even from a low-leverage base, an upward trend in liabilities can erode the margin of safety if it continues. Sustained increases could raise interest or refinancing needs, reduce net financial flexibility and pressure credit metrics, making future capital allocation more constrained.

Exposure to industrial demand cyclicality

Revenue is closely tied to customer production volumes and industrial activity cycles. In downturns, component processing demand and utilization can fall, reducing throughput and pricing leverage. This structural exposure makes medium-term revenue and margin outcomes sensitive to manufacturing cycles.

TOCALO Co., Ltd. Business Overview & Revenue Model

Company Description

TOCALO Co.,Ltd. develops surface modifying technologies in Japan and internationally. It produces functional coatings through thermal spraying technology, including vacuum and atmospheric plasma, electric arc, high velocity oxy-fuel spraying, suspension plasma spraying, and SDC thick coatings, as well as powder, rod, and wire flame spraying processes. The company also provides other surface modification technologies, such as CDC-ZAC coating, TD process, PTA process, WIN KOTE, PVD process, and laser cladding process. Its products are used in the semiconductor and PFD, iron and steel, medical equipment, power generation, transportation and industrial machineries, pulp and paper, petrochemical plants, plastic and films, construction, food production, and cutting tool applications. The company was formerly known as Toyo Calorizing Industry Co., Ltd. and changed its name to TOCALO Co.,Ltd. in 1981. TOCALO Co.,Ltd. was founded in 1951 and is headquartered in Kobe, Japan.

How the Company Makes Money

TOCALO Co., Ltd. generates revenue through the sale of its precision cutting tools and machinery to various industries. The company has a diversified revenue model that includes direct sales to manufacturers, distribution partnerships, and export activities. Key revenue streams consist of product sales, maintenance services, and technical support. Additionally, TOCALO has established significant partnerships with major industrial firms, which provide stable demand for its products, contributing to consistent earnings growth.

TOCALO Co., Ltd. Financial Statement Overview

Summary

Strong multi-year revenue growth (2021: 39,073M yen to 2025: 54,231M yen) with improving profitability (net margin ~14.9% in 2025) and healthy operating efficiency. Balance sheet is stable with very low leverage (debt-to-equity ~0.06) and high equity ratio (~74.3%), while cash generation is solid (operating cash flow 9,077M yen; OCF/net income 1.13) though free cash flow conversion is moderate (FCF/net income 0.44).

Income Statement

TOCALO Co., Ltd. has demonstrated strong financial performance with consistent revenue growth, increasing from 39,073 million yen in 2021 to 54,231 million yen in 2025. The company maintains a robust gross profit margin, averaging around 36-37% over the years. Net profit margin has also improved, reaching approximately 14.9% in 2025. EBIT and EBITDA margins are healthy, showing operational efficiency improvements. The revenue growth rate from 2024 to 2025 was substantial at 16%, indicating a positive growth trajectory.

Balance Sheet

TOCALO Co., Ltd.'s balance sheet is strong, with a low debt-to-equity ratio of 0.06, reflecting low leverage. The company has a high equity ratio of around 74.3% in 2025, showcasing financial stability. The return on equity is solid at approximately 13.3%, indicating effective use of shareholder capital. However, the slight increase in total liabilities over the years requires monitoring.

Cash Flow

The company shows a positive trend in operating cash flow, increasing to 9,077 million yen in 2025. Free cash flow has grown steadily, with a growth rate of 18.9% from 2024 to 2025. The operating cash flow to net income ratio is 1.13, demonstrating strong cash generation relative to earnings. The free cash flow to net income ratio is 0.44, indicating a moderate level of free cash flow generation. Overall, cash flow management appears solid.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	56.52B	54.23B	46.73B	48.14B	43.81B	39.29B
Gross Profit	21.62B	20.29B	16.27B	17.38B	16.59B	14.77B
EBITDA	16.82B	15.57B	12.25B	13.55B	13.04B	11.66B
Net Income	8.75B	8.05B	6.33B	7.35B	6.91B	5.46B
Balance Sheet
Total Assets	80.15B	82.78B	77.94B	74.90B	70.07B	64.65B
Cash, Cash Equivalents and Short-Term Investments	15.68B	17.98B	20.91B	20.91B	20.11B	19.23B
Total Debt	3.40B	3.88B	5.10B	2.94B	4.29B	6.07B
Total Liabilities	14.83B	17.05B	18.01B	17.25B	17.61B	17.76B
Stockholders Equity	60.43B	60.65B	55.46B	53.84B	49.10B	44.20B
Cash Flow
Free Cash Flow	0.00	3.55B	3.09B	5.28B	5.31B	6.24B
Operating Cash Flow	0.00	9.08B	7.88B	9.89B	9.87B	10.59B
Investing Cash Flow	0.00	-6.19B	-4.63B	-5.09B	-5.04B	-4.62B
Financing Cash Flow	0.00	-5.12B	-3.24B	-4.56B	-4.55B	-3.80B

TOCALO Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2224.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3433, the sentiment is Neutral. The current price of 2224 is below the 20-day moving average (MA) of 2882.75, below the 50-day MA of 2713.80, and below the 200-day MA of 2231.18, indicating a neutral trend. The MACD of -19.01 indicates Positive momentum. The RSI at 40.22 is Neutral, neither overbought nor oversold. The STOCH value of 18.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3433.

TOCALO Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5192	78 Outperform	¥108.69B	15.71	―	4.64%	3.99%	-28.28%
3433	78 Outperform	¥147.22B	16.40	―	3.39%	14.21%	29.38%
5195	77 Outperform	¥83.43B	8.96	―	3.82%	3.68%	-46.19%
6490	76 Outperform	¥166.93B	11.03	―	2.50%	-2.46%	-10.72%
6498	72 Outperform	¥149.92B	13.19	10.28%	2.77%	2.74%	7.86%
7995	67 Neutral	¥80.28B	17.07	―	3.77%	-5.87%	24.10%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

TOCALO Co., Ltd. Corporate Events

TOCALO Lifts Nine-Month Profit and Keeps Full-Year Outlook, Plans Higher Dividend

For the nine months ended 31 December 2025, TOCALO reported consolidated net sales of ¥42.6 billion, up 6.8% year on year, with operating profit rising 12.3% to ¥9.5 billion and profit attributable to owners of parent increasing 11.4% to ¥6.4 billion, reflecting continued earnings growth and higher basic earnings per share of ¥108.36. The company’s financial position remained solid with total assets of ¥87.5 billion, an equity ratio of 71.5%, the inclusion of TOCALO USA–Arizona LLC in the consolidation scope, and it maintained its full‑year forecast for FY ending March 31, 2026 at ¥57.0 billion in net sales and ¥8.33 billion in profit attributable to owners, alongside plans to raise the annual dividend to ¥70 per share, signaling confidence in stable performance and shareholder returns.

The most recent analyst rating on (JP:3433) stock is a Buy with a Yen3021.00 price target. To see the full list of analyst forecasts on TOCALO Co., Ltd. stock, see the JP:3433 Stock Forecast page.