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

• Market Cap: ¥156.81B
• Dividend Yield: 3.39%
• Average Volume (3M): 169.44K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 1.09
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: ¥3,007.00 ▲(35.21% Upside)

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

Sustained Revenue Growth

Consistent multi-year revenue expansion reflects growing demand for TOCALO's surface engineering services and strengthens its recurring, production-linked service revenue base. This durable top-line growth supports scalable margins, reinvestment capacity, and long-term cash generation.

Healthy Profitability and Margins

Robust gross and net margins indicate differentiated, value-added services (thermal spray and coatings) with pricing power versus commodity processing. Sustained margin levels support internal funding for R&D, maintenance of quality standards, and resilience across industry cycles.

Strong Balance Sheet and Cash Generation

Very low leverage and a high equity ratio provide financial flexibility to invest in capacity or absorb demand swings. Coupled with rising operating cash flow, this balance sheet strength reduces refinancing risk and supports durable capital allocation options over the medium term.

Negative Factors

Rising Total Liabilities Need Monitoring

Although leverage is low today, a trend of rising liabilities could erode financial flexibility over time if it continues. For a service-driven industrial operator, increasing obligations may constrain capex, M&A optionality, or responses to cyclical downturns if not addressed.

Moderate Free Cash Flow Conversion

A 0.44 FCF-to-net-income ratio suggests only moderate conversion of accounting profits into free cash. For a capital-and-process-intensive services firm, this could limit pace of organic expansion or cautious dividend increases unless conversion improves or working capital is optimized.

Customer Concentration Disclosure Missing

Lack of disclosure on customer concentration is a persistent governance and business-risk gap. For a contract service provider, reliance on a few large industrial clients would create revenue vulnerability; opaque exposure raises execution and renewal risks over the medium term.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	56.52B	54.23B	46.73B	48.14B	43.81B	39.07B
Gross Profit	21.62B	19.98B	16.24B	17.37B	16.59B	14.59B
EBITDA	16.52B	15.50B	12.71B	13.98B	13.24B	11.35B
Net Income	8.75B	8.05B	6.33B	7.35B	6.91B	5.46B
Balance Sheet
Total Assets	80.15B	81.68B	77.94B	74.26B	69.52B	64.18B
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	15.94B	18.02B	16.62B	17.06B	17.29B
Stockholders Equity	60.43B	60.65B	55.46B	53.84B	49.10B	44.20B
Cash Flow
Free Cash Flow	0.00	3.55B	2.99B	5.19B	5.25B	6.21B
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: Positive
• Last Price: 2224.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3433, the sentiment is Positive. The current price of 2224 is below the 20-day moving average (MA) of 2491.50, below the 50-day MA of 2325.52, and above the 200-day MA of 2053.20, indicating a bullish trend. The MACD of 92.08 indicates Negative momentum. The RSI at 68.49 is Neutral, neither overbought nor oversold. The STOCH value of 87.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3433.

TOCALO Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6455	79 Outperform	¥128.79B	11.58	―	2.25%	12.64%	34.19%
6490	79 Outperform	¥158.18B	18.39	―	2.50%	-2.46%	-10.72%
3433	78 Outperform	¥156.81B	18.19	―	3.39%	14.21%	29.38%
6407	76 Outperform	¥288.16B	22.87	―	2.50%	6.16%	17.11%
6486	70 Outperform	¥155.97B	18.98	―	3.88%	1.70%	18.50%
6284	68 Neutral	¥93.80B	12.42	―	3.24%	18.70%	33.93%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

TOCALO Co., Ltd. Corporate Events

TOCALO Announces Increased Interim Dividend and Maintains Annual Forecast

TOCALO Co., Ltd. has announced an interim dividend of 37.00 yen per share for shareholders as of September 30, 2025, reflecting an increase from the previous year’s interim dividend. Despite revising the year-end dividend forecast, the total annual dividend remains unchanged at 70.00 yen per share, aligning with the company’s policy of maintaining stable dividends while aiming for a consolidated dividend payout ratio of approximately 50% and a minimum dividend on equity ratio of 5%.

The most recent analyst rating on (JP:3433) stock is a Buy with a Yen2490.00 price target. To see the full list of analyst forecasts on TOCALO Co., Ltd. stock, see the JP:3433 Stock Forecast page.

TOCALO Reports Strong Financial Growth and Dividend Revision

TOCALO Co., Ltd. reported its consolidated financial results for the six months ended September 30, 2025, showing a significant increase in net sales and profits compared to the previous year. The company also announced a revision in its dividend forecast, indicating a positive outlook for stakeholders.

The most recent analyst rating on (JP:3433) stock is a Buy with a Yen2490.00 price target. To see the full list of analyst forecasts on TOCALO Co., Ltd. stock, see the JP:3433 Stock Forecast page.