Takagi Seiko Corporation (4242) AI Stock Analysis

• Market Cap: ¥5.37B
• Dividend Yield: 2.67%
• Average Volume (3M): 996.00
• Price to Earnings (P/E): 2.3
• Beta (1Y): 0.24
• Revenue Growth: -10.04%
• EPS Growth: -331.24%
• Country: JP
• Employees: 2,505
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 185.43
• Shares Outstanding: 2,822,472
• 10 Day Avg. Volume: 870
• 30 Day Avg. Volume: 996
• PEG Ratio: <0.01
• Price to Book (P/B): 0.33
• Price to Sales (P/S): 0.09
• P/FCF Ratio: 10.94
• 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: 64 Neutral
• Price Target: ¥2,065.00 ▲(20.34% Upside)
• Action: Reiterated Date: 11/05/25
• Date: Action: Reiterated 11/05/25

The overall stock score of 64 reflects a mix of strong technical momentum and significant financial challenges. The stock's bullish technical indicators are offset by poor financial performance and unattractive valuation due to negative earnings. The dividend yield offers some support, but strategic improvements are necessary for long-term growth.

Positive Factors

B2B precision manufacturing model

A built-to-spec, B2B precision components model creates durable, contract-driven revenue with higher switching costs for customers. Custom part manufacturing supports sticky relationships and repeat orders from industrial clients, underpinning steady medium-term demand across cycles.

Moderate leverage and equity base

Moderate leverage (D/E 0.65) and a ~31% equity ratio provide balance sheet flexibility to fund working capital and selective capex without excessive refinancing risk. This structural cushion helps the company endure cyclical downturns and supports operational continuity over the next several months.

Operating cash flow remaining positive

Positive operating cash flow indicates core manufacturing operations still generate cash from customers and operations, a durable indicator of business viability. Sustained OCF supports payroll, suppliers and short-term liquidity even as free cash flow and margins need improvement.

Negative Factors

Declining revenue and compressing margins

A double-digit revenue decline and falling gross margin signal weakening demand or pricing pressure and reduced production leverage. Persisting top-line contraction with margin compression undermines sustainable profitability and limits ability to fund strategic investments over the medium term.

Negative profitability and ROE erosion

Negative ROE reflects losses that erode shareholder capital and indicate the company is not generating returns on equity. Over months this constrains reinvestment, reduces investor confidence, and can limit access to external capital if losses persist.

Sharp free cash flow deterioration

An ~86% drop in free cash flow severely reduces financial headroom for capex, debt service and strategic initiatives. Prolonged FCF weakness increases refinancing risk, may force cost cutting or asset sales, and limits ability to improve operations over the coming months.

Takagi Seiko Corporation Business Overview & Revenue Model

Company Description

Takagi Seiko Corporation manufactures and sells plastic products, molds for molding of plastic products, and metal pressed products in Japan, China, Indonesia, and Thailand. The company provides automotive parts, such as fuel tanks, spoilers, and cowlings, as well as exterior parts for cars; and office automation parts, including mechanism/exterior parts for photocopiers and printers, and note book computer cases. It also offers various plastic products for mobile phones, IT products, office equipment, vehicles, motorcycles, power products, agricultural machinery, construction equipment, and household appliances. In addition, it provides engineering services for product design and technical support. Takagi Seiko Corporation was founded in 1931 and is headquartered in Takaoka, Japan.

How the Company Makes Money

Takagi Seiko makes money primarily by manufacturing and selling precision metal components to business customers (B2B). Revenue is generated when customers place orders for specific parts (often built to customer specifications), and Takagi Seiko delivers production lots priced based on factors such as material costs, processing complexity (e.g., press forming, machining, secondary processing), quality requirements, and delivery volume. The company’s earnings are therefore driven by (1) sales volume of manufactured parts, (2) unit pricing/margins determined by value-added processing and production efficiency, and (3) the stability and concentration of its customer base. Specific breakdowns of revenue by end-market, named key customers, segment-level sales, and material partnership details are not available from the provided information and are therefore null.

Takagi Seiko Corporation Financial Statement Overview

Summary

Takagi Seiko Corporation is facing financial difficulties with declining revenue, negative profitability margins, and deteriorating cash flow. While the balance sheet shows moderate leverage, the negative return on equity and cash flow issues indicate significant operational and profitability challenges. Strategic improvements are needed to restore growth and financial health.

Income Statement

The income statement shows a decline in total revenue from 2024 to 2025, with a revenue decrease of 13.27%. The gross profit margin in 2025 is 15.19%, down from previous years. The net profit margin turned negative in 2025 at -5.08%, indicating profitability challenges. The negative EBIT margin of 0.26% and EBITDA margin of 0.42% in 2025 contribute to this weak performance. Despite past revenue growth, recent declines and negative margins highlight significant financial stress.

Balance Sheet

The balance sheet shows a relatively stable financial position with a debt-to-equity ratio of 0.65 in 2025, indicating moderate leverage. The return on equity (ROE) has turned negative at -19.71% due to the negative net income, reflecting poor profitability. The equity ratio stands at 31.12%, suggesting a fair amount of shareholder equity in the company's asset base. Despite moderate leverage, the negative ROE indicates a need for improved profitability.

Cash Flow

The cash flow statement reveals a significant decline in free cash flow from 2024 to 2025, with a negative growth rate of 86.66%. The operating cash flow to net income ratio is negative due to the loss, while the free cash flow to net income ratio is also negatively impacted. Although operating cash flow remains positive, the sharp decline in free cash flow and negative ratios indicate cash flow challenges.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	43.44B	44.29B	51.07B	48.16B	47.33B	37.14B
Gross Profit	6.42B	7.30B	8.66B	7.54B	8.16B	6.22B
EBITDA	3.13B	3.41B	4.89B	4.23B	4.80B	3.51B
Net Income	-2.12B	-2.25B	1.19B	700.00M	1.01B	-654.00M
Balance Sheet
Total Assets	30.87B	36.67B	39.90B	39.40B	38.34B	35.23B
Cash, Cash Equivalents and Short-Term Investments	3.75B	5.57B	5.28B	4.76B	3.82B	3.89B
Total Debt	5.37B	7.47B	6.61B	8.22B	9.47B	11.02B
Total Liabilities	17.63B	21.03B	21.72B	23.82B	24.32B	24.26B
Stockholders Equity	10.39B	11.41B	13.19B	10.96B	9.77B	7.67B
Cash Flow
Free Cash Flow	0.00	349.00M	2.62B	2.40B	1.88B	812.00M
Operating Cash Flow	0.00	2.21B	4.32B	4.68B	4.61B	2.60B
Investing Cash Flow	0.00	-2.31B	-1.63B	-2.24B	-2.66B	-993.00M
Financing Cash Flow	0.00	-212.00M	-2.37B	-1.65B	-2.32B	-2.05B

Takagi Seiko Corporation Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1716.00
• 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:4242, the sentiment is Neutral. The current price of 1716 is below the 20-day moving average (MA) of 1964.85, below the 50-day MA of 1838.50, and above the 200-day MA of 1542.94, indicating a neutral trend. The MACD of 24.35 indicates Positive momentum. The RSI at 51.34 is Neutral, neither overbought nor oversold. The STOCH value of 36.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4242.

Takagi Seiko Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4625	80 Outperform	¥4.91B	12.52	―	2.27%	1.79%	31.63%
4623	72 Outperform	¥6.59B	7.93	―	3.50%	-8.27%	-3.23%
4990	68 Neutral	¥5.77B	5.98	―	1.22%	0.80%	63.33%
4624	66 Neutral	¥5.75B	6.39	―	1.39%	2.67%	37.55%
4242	64 Neutral	¥5.37B	2.32	―	2.67%	-10.04%	-331.24%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4615	44 Neutral	¥4.25B	-15.17	―	―	8.66%	-239.07%