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

• Market Cap: ¥11.59B
• 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: ¥323.00 ▲(12.94% 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 / low leverage

A robust equity position and low debt-to-equity ratio indicate durable financial stability. Low leverage reduces refinancing risk, preserves strategic flexibility for R&D or distribution investments, and supports operations through industry cycles over the next several months.

Recent revenue growth

Reported revenue growth of ~16.8% demonstrates recent top-line momentum and suggests market demand for the company’s products. Sustained revenue expansion can improve scale economics, help absorb fixed costs, and create room for margin recovery if conversion to cash improves.

Diversified OTC and prescription revenue model

A mixed revenue model (branded OTC digestive products, prescription pharmaceuticals, and other health items) spreads risk across channels and customer types. Established brand and distribution via drugstores and medical channels provide durable demand sources and resiliency.

Negative Factors

Negative operating and free cash flow

Negative operating and free cash flow signal persistent cash-conversion issues. Even with positive revenue growth, weak cash generation constrains working capital, limits reinvestment, and raises the need for improved collections or cost controls to sustain operations over coming months.

Declining profitability; negative EBIT margin

Declining net income and a negative EBIT margin point to structural operating inefficiencies. Stable gross margin but worsening net profit margins indicate higher operating costs or mix pressures, limiting the company's ability to convert sales into sustained profits.

Diminishing return on equity

A diminishing ROE reduces capital efficiency and signals lower shareholder returns from existing equity. Despite a healthy equity ratio, falling ROE reflects profitability erosion and may constrain dividend capacity or capital allocation choices if earnings don't recover.

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: Positive
• RSI: Neutral
• STOCH: Neutral

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 320.65, below the 50-day MA of 308.48, and below the 200-day MA of 298.42, indicating a bullish trend. The MACD of 4.31 indicates Positive momentum. The RSI at 56.89 is Neutral, neither overbought nor oversold. The STOCH value of 73.82 is Neutral, 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	¥15.83B	17.20	―	―	-5.41%	―
4524	65 Neutral	¥9.59B	17.19	―	2.55%	3.23%	42.87%
4577	63 Neutral	¥44.23B	19.77	―	2.75%	7.56%	-48.91%
4538	60 Neutral	¥22.09B	-5.37	―	3.71%	7.50%	-281.41%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4512	48 Neutral	¥11.59B	38.82	―	1.06%	5.42%	-62.03%
2929	47 Neutral	¥18.69B	-9.94	―	3.65%	9.53%	-155.76%