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

• Market Cap: ¥12.11B
• Dividend Yield: 1.06%
• Average Volume (3M): 65.94K
• Price to Earnings (P/E): 7.1
• Beta (1Y): 0.37
• 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: ¥349.00 ▲(22.03% 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

Robust equity and low leverage give the company capacity to withstand downturns, fund product development, and maintain distribution. This durable financial stability supports long-term operational continuity and strategic investments without relying on external debt.

Established OTC brand and diversified channels

Wakamoto's established OTC Wakamoto brand and sales across OTC, prescription and other healthcare channels create durable revenue diversification. Strong brand recognition and broad domestic distribution through drugstores, pharmacies and wholesalers supports steady consumer demand and shelf presence.

Recent revenue and EPS growth

Double-digit reported revenue growth and positive EPS growth point to recovering top-line momentum and improving earnings capacity. Sustained revenue expansion can enable scale economies, improve margins over time, and fund R&D or marketing to reinforce market position.

Negative Factors

Negative operating & free cash flow

Negative operating and free cash flow indicate persistent cash conversion problems. Over months this constrains capital allocation, limits investment in products and marketing, pressures working capital, and increases vulnerability to revenue shocks despite a strong balance sheet.

Declining net income and negative EBIT margin

Declining net income and a negative EBIT margin signal structural operating inefficiencies. Unless cost structure or pricing mix improves, ongoing operating losses will erode shareholder value, hinder reinvestment, and make sustainable profitability dependent on material operational changes.

Diminishing return on equity

Diminishing return on equity despite healthy equity ratios shows falling capital efficiency. Over the medium term this reduces the firm's ability to generate attractive shareholder returns, potentially limiting reinvestment payoff and weakening appeal to income-seeking investors.

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 makes money primarily by selling healthcare products through domestic distribution channels. Its revenue model is centered on (1) sales of over-the-counter (OTC) products, where it earns revenue from wholesale shipments and retail sell-through of consumer health items (notably digestive health-related products under the Wakamoto brand); (2) sales of prescription pharmaceuticals, where it earns revenue from supplying ethical drugs into the medical channel (hospitals/clinics) via pharmaceutical wholesalers; and (3) sales of other healthcare-related products (e.g., products positioned for health maintenance), which contribute additional consumer-product revenue. Across these streams, earnings are driven by product volume, brand strength in consumer health, pricing/mix, and the breadth of distribution through drugstores, pharmacies, and healthcare providers. Specific major partnerships or customer concentration details: null.

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	529.00K	2.65M	2.65M
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	0.00	-1.04B	-663.02M	420.76M	-28.97M	-318.82M
Operating Cash Flow	0.00	-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: 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 334.20, below the 50-day MA of 323.34, and below the 200-day MA of 301.25, indicating a bullish trend. The MACD of 7.43 indicates Negative momentum. The RSI at 58.98 is Neutral, neither overbought nor oversold. The STOCH value of 77.85 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	¥14.72B	16.22	―	―	-5.41%	―
4524	65 Neutral	¥9.38B	15.24	―	2.55%	3.23%	42.87%
4577	63 Neutral	¥44.63B	18.30	―	2.75%	7.56%	-48.91%
4538	60 Neutral	¥20.96B	5.79	―	3.71%	7.50%	-281.41%
2929	52 Neutral	¥19.35B	72.72	―	3.65%	9.53%	-155.76%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4512	48 Neutral	¥12.11B	7.11	―	1.06%	5.42%	-62.03%