Wakamoto Pharmaceutical Co., Ltd. (4512) AI Stock Analysis

• Market Cap: ¥11.21B
• Dividend Yield: 1.06%
• Average Volume (3M): 65.94K
• Price to Earnings (P/E): 38.8
• Beta (1Y): 0.38
• Revenue Growth: 5.42%
• EPS Growth: -62.03%
• Country: JP
• Employees: 403
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 10.05
• Shares Outstanding: 34,838,326
• 10 Day Avg. Volume: 55,010
• 30 Day Avg. Volume: 65,936
• PEG Ratio: -4.19
• Price to Book (P/B): 0.95
• Price to Sales (P/S): 1.41
• P/FCF Ratio: -10.55
• 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: 48 Neutral
• Price Target: ¥331.00 ▲(15.73% Upside)
• Action: Reiterated Date: 10/29/25
• Date: Action: Reiterated 10/29/25

The overall stock score of 48 reflects the company's mixed financial performance, with a strong balance sheet but declining profitability and liquidity challenges. Technical analysis indicates potential bearish trends, and valuation is a concern due to a negative P/E ratio. The modest dividend yield provides some support but is not sufficient to significantly enhance the score.

Positive Factors

Strong balance sheet and low leverage

Low leverage and a robust equity base provide durable financial flexibility, reducing refinancing and covenant risk. Over the next 2-6 months this supports consistent funding for operations, product supply and occasional strategic investments without pressuring liquidity during revenue volatility.

Established consumer brand with multi-channel revenue mix

A well-known digestive-health brand plus revenue from OTC, ethical (prescription) drugs and other health products diversifies cash generation sources. This multi-channel model reduces reliance on one distribution channel and supports steadier revenue amid shifts in retail or medical demand.

Recent top-line growth

A notable revenue increase provides operational breathing room and validates product demand. Coupled with reported improvement in EBITDA margin, this suggests core sales and underlying unit economics can expand operating cash generation if management sustains cost discipline over the medium term.

Negative Factors

Negative operating and free cash flow

Persistent negative operating and free cash flow signal weak cash conversion and strain on working capital. Over months this limits the company's ability to self-fund marketing, inventory or R&D, may force external financing, and raises risk during any revenue softness.

Operating inefficiency: negative EBIT margin

A negative EBIT margin despite EBITDA improvement points to structural cost or SG&A issues. This reduces the firm's ability to generate sustainable operating profits from sales, making long-term margin recovery and durable cash flow generation dependent on meaningful operational fixes.

Declining profitability reducing shareholder returns (ROE pressure)

With net income falling and ROE declining, the company is generating lower returns on its equity base. Over a multi-month horizon this can constrain reinvestment capacity, weaken metrics used by partners and creditors, and limit flexibility to improve margins without external capital.

Wakamoto Pharmaceutical Co., Ltd. Business Overview & Revenue Model

Company Description

Wakamoto Pharmaceutical Co., Ltd. manufactures and sells ethical and non-prescription drugs in Japan. The company offers Strong Wakamoto, a gastrointestinal drug for digestion, intestinal regulation, and nutritional supplementation. It also provides AVANTBISE oral tablets, a supplement of bacteria to restore the balance of oral flora; and medicated toothpaste. The company was formerly known as Society for Nutrition and Raising Children Co., Ltd. and changed its name to Wakamoto Pharmaceutical Co., Ltd. in July 1943. Wakamoto Pharmaceutical Co., Ltd. was founded in 1929 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Wakamoto Pharmaceutical generates revenue through multiple streams, primarily from the sales of its pharmaceutical products, which include prescription medications and OTC drugs. The company benefits from a diversified product portfolio that caters to different therapeutic areas, thereby broadening its market reach. Additionally, Wakamoto may engage in partnerships with healthcare providers and other pharmaceutical companies for research and development collaborations, which can lead to shared revenues from new product launches. Furthermore, the company likely capitalizes on licensing agreements and regulatory approvals to expand its market presence, contributing to its overall earnings.

Wakamoto Pharmaceutical Co., Ltd. Financial Statement Overview

Summary

Wakamoto Pharmaceutical Co., Ltd. shows a mixed financial performance. The balance sheet is strong with a low debt-to-equity ratio, but the income statement reflects declining profitability and the cash flow statement reveals liquidity challenges. Strategic improvement is needed in operational efficiency and cash management.

Income Statement

The company faces fluctuating revenue trends with a slight increase from 2024 to 2025 but a decline over the long term. Gross profit margin remains stable but with decreasing net income, leading to declining net profit margins. Despite improvement in EBITDA margin, the EBIT margin remains negative, indicating operating inefficiency.

Balance Sheet

The balance sheet shows a robust equity position with a low debt-to-equity ratio, highlighting financial stability. However, the return on equity is diminishing due to declining net income. The equity ratio remains healthy, reflecting reliable asset management.

Cash Flow

Cash flow analysis indicates challenges with negative operating cash flow and free cash flow, raising concerns about cash management. The operating cash flow to net income and free cash flow to net income ratios suggest inefficiencies in converting profit to cash.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	7.98B	7.79B	7.74B	8.66B	8.38B	8.89B
Gross Profit	3.75B	3.62B	3.54B	4.11B	4.36B	4.49B
EBITDA	397.01M	438.68M	504.84M	575.81M	755.52M	-218.12M
Net Income	-177.67M	64.44M	108.96M	138.26M	238.54M	-601.86M
Balance Sheet
Total Assets	15.25B	15.00B	15.42B	15.71B	14.95B	14.57B
Cash, Cash Equivalents and Short-Term Investments	3.56B	2.95B	3.66B	3.88B	3.23B	2.84B
Total Debt	100.00M	100.00M	130.73M	137.79M	129.14M	171.20M
Total Liabilities	3.55B	3.39B	3.39B	3.80B	3.47B	3.19B
Stockholders Equity	11.70B	11.61B	12.03B	11.91B	11.48B	11.39B
Cash Flow
Free Cash Flow	820.56M	-1.04B	-663.02M	420.76M	-28.97M	-318.82M
Operating Cash Flow	820.56M	-592.45M	-107.34M	631.92M	339.17M	163.44M
Investing Cash Flow	0.00	-13.50M	-2.35M	17.13M	50.57M	-199.51M
Financing Cash Flow	0.00	-103.94M	-104.99M	-1.61M	-1.62M	-3.83M

Wakamoto Pharmaceutical Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 286.00
• 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:4512, the sentiment is Positive. The current price of 286 is below the 20-day moving average (MA) of 321.90, below the 50-day MA of 309.54, and below the 200-day MA of 298.53, indicating a bullish trend. The MACD of 4.90 indicates Negative momentum. The RSI at 62.13 is Neutral, neither overbought nor oversold. The STOCH value of 81.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4512.

Wakamoto Pharmaceutical Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4574	66 Neutral	¥14.92B	17.20	―	―	-5.41%	―
4524	65 Neutral	¥9.53B	17.19	―	2.55%	3.23%	42.87%
4577	63 Neutral	¥43.78B	19.77	―	2.75%	7.56%	-48.91%
4538	60 Neutral	¥21.74B	-5.28	―	3.71%	7.50%	-281.41%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4512	48 Neutral	¥11.21B	38.82	―	1.06%	5.42%	-62.03%
2929	47 Neutral	¥18.08B	-9.61	―	3.65%	9.53%	-155.76%