Ray Corporation (4317) AI Stock Analysis

• Market Cap: ¥9.27B
• Dividend Yield: 2.36%
• Average Volume (3M): 57.77K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 0.63
• Revenue Growth: 4.44%
• EPS Growth: 29.38%
• Country: JP
• Employees: 407
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): 41.22
• Shares Outstanding: 14,328,976
• 10 Day Avg. Volume: 61,760
• 30 Day Avg. Volume: 57,773
• PEG Ratio: -1.36
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 0.54
• P/FCF Ratio: 6.71
• 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: 79 Outperform
• Price Target: ¥787.00 ▲(21.64% Upside)

Ray Corporation scores well due to strong technical indicators and a solid valuation, suggesting the stock is currently undervalued with positive momentum. Financial performance is stable, with strengths in the balance sheet and operational efficiency, though there are challenges in revenue growth and net profitability. The absence of earnings call data and corporate events does not impact the overall score.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low debt levels provides financial stability and flexibility, allowing the company to invest in growth opportunities and weather economic downturns.

Operational Efficiency

Consistent operational efficiency as shown by stable margins indicates effective cost management and competitive positioning, supporting long-term profitability.

Cash Generation

Strong cash generation from operations ensures the company can fund its operations and investments internally, reducing reliance on external financing.

Negative Factors

Inconsistent Revenue Growth

Inconsistent revenue growth can hinder long-term expansion and market share gains, potentially impacting the company's ability to scale and compete effectively.

Net Profit Margin Volatility

Volatile net profit margins may indicate challenges in cost management or pricing strategy, affecting the company's ability to maintain consistent profitability.

Free Cash Flow Variability

Variability in free cash flow can impact the company's ability to consistently fund growth initiatives and return capital to shareholders, potentially affecting long-term financial health.

Ray Corporation Business Overview & Revenue Model

Company Description

Ray Corporation engages in the video production business in Japan. The company provides video production such as TV commercials, event and promotion production, digital contents production, DVD and Blu-ray package production, and rental of video-editing studios and video equipment. It also involved in advertisement solutions, IT, digital and video solutions, as well as communication design, creative design, kansai, and clay corporation business. Ray Corporation was founded in 1980 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Ray Corporation generates revenue through multiple streams, primarily by selling high-precision components and systems to clients in the aerospace, defense, and automotive sectors. The company’s revenue model is largely based on direct sales of its products, as well as long-term contracts that provide stable income from government and commercial clients. Additionally, Ray Corporation engages in research and development partnerships with other firms and government agencies, which not only enhances its technological capabilities but also provides funding and grants that contribute to its earnings. The company also invests in service contracts and maintenance agreements, ensuring ongoing revenue from its existing customer base.

Ray Corporation Financial Statement Overview

Summary

Ray Corporation demonstrates a solid financial position with strengths in its balance sheet and operational efficiency. The income statement reflects some challenges in revenue growth and net profitability, while the cash flow statement shows good cash generation with room for improvement in free cash flow consistency.

Income Statement

Ray Corporation's income statement shows a mixed performance. The gross profit margin is healthy, indicating efficient production and sales processes. However, the net profit margin has shown some volatility over the years, reflecting challenges in cost management or pricing strategy. Revenue growth has been inconsistent, with recent declines suggesting potential market saturation or competitive pressures. EBIT and EBITDA margins are stable, indicating consistent operational efficiency.

Balance Sheet

The balance sheet of Ray Corporation is robust, with a strong equity base and low debt levels, as evidenced by a favorable debt-to-equity ratio. The return on equity is moderate, suggesting effective use of shareholders' funds. The equity ratio is high, indicating a solid financial foundation and low financial risk. Overall, the balance sheet reflects financial stability and prudent management of liabilities.

Cash Flow

Ray Corporation's cash flow statement reveals a positive trend in free cash flow, although growth has been uneven. The operating cash flow to net income ratio is strong, indicating good cash generation from operations. However, the free cash flow to net income ratio suggests some variability in capital expenditures, which could impact future cash flow stability. Overall, the cash flow position is solid but could benefit from more consistent free cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.79B	10.46B	11.22B	12.45B	11.05B	7.05B
Gross Profit	4.28B	3.55B	3.79B	4.15B	3.65B	1.57B
EBITDA	2.14B	1.57B	1.68B	1.69B	1.38B	95.43M
Net Income	1.12B	745.58M	818.49M	715.54M	419.47M	-367.98M
Balance Sheet
Total Assets	10.13B	9.12B	9.40B	9.58B	9.79B	8.65B
Cash, Cash Equivalents and Short-Term Investments	2.80B	2.87B	2.83B	3.14B	3.61B	3.02B
Total Debt	641.00M	769.43M	1.02B	1.29B	2.05B	2.18B
Total Liabilities	3.12B	2.33B	2.85B	3.54B	4.32B	3.52B
Stockholders Equity	7.01B	6.80B	6.55B	6.05B	5.47B	5.13B
Cash Flow
Free Cash Flow	0.00	844.33M	384.25M	543.27M	939.10M	751.27M
Operating Cash Flow	0.00	1.69B	1.05B	721.29M	1.03B	849.86M
Investing Cash Flow	0.00	-836.28M	-668.97M	-170.41M	-49.13M	-149.48M
Financing Cash Flow	0.00	-813.04M	-686.68M	-1.02B	-388.49M	263.21M

Ray Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 647.00
• 50DMA: Negative
• 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:4317, the sentiment is Positive. The current price of 647 is above the 20-day moving average (MA) of 635.25, below the 50-day MA of 654.44, and above the 200-day MA of 545.86, indicating a neutral trend. The MACD of -1.03 indicates Negative momentum. The RSI at 52.16 is Neutral, neither overbought nor oversold. The STOCH value of 69.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4317.

Ray Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4317	79 Outperform	¥9.27B	7.89	―	2.36%	4.44%	29.38%
4712	75 Outperform	¥13.49B	6.15	―	1.40%	26.47%	55.11%
4347	68 Neutral	¥14.80B	25.87	―	1.96%	0.16%	116.15%
4308	67 Neutral	¥9.32B	18.60	―	3.92%	2.87%	27.30%
4772	62 Neutral	¥12.05B	12.81	―	0.91%	8.13%	275.53%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3686	46 Neutral	¥5.47B	-12.28	―	―	-2.84%	36.23%