Tsumura & Co (4540) AI Stock Analysis

• Market Cap: ¥307.02B
• Dividend Yield: 3.34%
• Average Volume (3M): 430.73K
• Price to Earnings (P/E): 11.0
• Beta (1Y): 0.57
• Revenue Growth: 10.51%
• EPS Growth: 9.62%
• Country: JP
• Employees: 4,138
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): 108.49
• Shares Outstanding: 76,758,360
• 10 Day Avg. Volume: 328,780
• 30 Day Avg. Volume: 430,733
• PEG Ratio: 0.11
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 1.81
• P/FCF Ratio: 52.57
• 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: ¥3,600.12
• Price Target Upside: 0.03% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 338.26
• Revenue Forecast (FY): ¥195.06B

• Rating: 76 Outperform
• Price Target: ¥4,381.00 ▲(21.73% Upside)

Tsumura & Co's stock is supported by strong financial performance, particularly in revenue growth and profitability, despite challenges in cash flow management. Technical indicators show a positive price trend, and the stock is attractively valued with a reasonable P/E ratio and a solid dividend yield. These factors contribute to a favorable overall stock score.

Positive Factors

Revenue Growth

The company's strong revenue growth indicates robust market demand and effective sales strategies, supporting long-term expansion and market presence.

Market Position

As a leader in Kampo medicine, Tsumura benefits from a strong brand and expertise, providing a competitive edge in the growing natural medicine market.

Profit Margins

Sustained high profit margins reflect efficient operations and pricing power, contributing to long-term financial stability and shareholder value.

Negative Factors

Cash Flow Management

Challenges in cash flow management may hinder the company's ability to fund growth initiatives and maintain financial flexibility over time.

Gross Profit Margin Decline

A decline in gross profit margin suggests rising costs or pricing pressures, which could impact profitability if not addressed.

Return on Equity

A decrease in return on equity indicates reduced efficiency in generating profits from shareholders' equity, potentially affecting investor confidence.

Tsumura & Co Business Overview & Revenue Model

Company Description

Tsumura & Co. (4540) is a leading Japanese pharmaceutical company specializing in traditional herbal medicine, also known as Kampo medicine. Established in 1893, the company develops, manufactures, and sells a wide range of Kampo products, which are derived from natural herbal ingredients. Tsumura operates primarily in the healthcare sector, focusing on providing effective and safe therapeutic solutions that align with Japan's rich history of herbal medicine. In addition to Kampo formulations, the company is involved in research and development of new pharmaceuticals and operates in the field of health foods.

How the Company Makes Money

Tsumura & Co. generates revenue primarily through the sale of its Kampo herbal medicines, which are prescribed by healthcare professionals in Japan and increasingly recognized in international markets. The company benefits from a strong distribution network and partnerships with pharmacies and medical institutions. In addition to direct sales, Tsumura earns revenue from licensing agreements and collaborations with other pharmaceutical companies for the development of new drugs based on its proprietary herbal formulations. The growing global interest in natural and alternative medicine has also contributed positively to its revenue streams, alongside ongoing investments in research and development to innovate and expand its product offerings.

Tsumura & Co Financial Statement Overview

Summary

Tsumura & Co demonstrates a solid financial position with strong profitability and a stable balance sheet. However, the decline in revenue growth and challenges in cash flow conversion highlight areas for improvement. The company should focus on reigniting revenue growth and enhancing cash flow efficiency to sustain its financial health.

Income Statement

Tsumura & Co shows a mixed performance in its income statement. The TTM data reveals a decline in revenue growth rate, indicating potential challenges in maintaining sales momentum. However, the company maintains strong gross and net profit margins, suggesting efficient cost management and profitability. The EBIT and EBITDA margins are also healthy, reflecting operational efficiency.

Balance Sheet

The balance sheet of Tsumura & Co is relatively stable. The debt-to-equity ratio is moderate, indicating a balanced approach to leveraging. Return on equity is decent, though it has seen a slight decline, which could be a concern if it continues. The equity ratio is strong, showing a solid capital structure with a good proportion of assets financed by equity.

Cash Flow

Cash flow analysis shows some positive trends, with a notable increase in free cash flow growth in the TTM period. However, the operating cash flow to net income ratio is less than ideal, suggesting potential issues in converting income into cash. The free cash flow to net income ratio is also low, indicating room for improvement in cash generation relative to earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	181.92B	181.09B	150.84B	140.04B	129.55B	130.88B
Gross Profit	88.19B	90.58B	68.82B	68.28B	66.47B	74.93B
EBITDA	56.11B	57.25B	34.82B	33.89B	31.57B	28.00B
Net Income	27.40B	32.43B	16.71B	16.48B	18.84B	15.33B
Balance Sheet
Total Assets	516.49B	464.38B	428.25B	396.81B	350.98B	319.06B
Cash, Cash Equivalents and Short-Term Investments	73.20B	73.23B	78.08B	94.75B	67.55B	61.31B
Total Debt	114.90B	70.34B	79.69B	79.69B	49.69B	52.85B
Total Liabilities	190.00B	134.27B	132.89B	124.57B	92.87B	85.89B
Stockholders Equity	294.07B	300.53B	270.80B	252.04B	239.77B	217.78B
Cash Flow
Free Cash Flow	-1.89B	6.23B	-14.45B	1.74B	10.73B	6.69B
Operating Cash Flow	26.64B	33.82B	5.61B	16.45B	21.31B	16.10B
Investing Cash Flow	-38.12B	-24.97B	-19.35B	-15.49B	-9.11B	-7.35B
Financing Cash Flow	8.69B	-19.87B	-4.42B	24.42B	-8.18B	-10.43B

Tsumura & Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3599.00
• 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:4540, the sentiment is Positive. The current price of 3599 is below the 20-day moving average (MA) of 3872.15, below the 50-day MA of 3741.02, and below the 200-day MA of 3728.30, indicating a bullish trend. The MACD of 57.35 indicates Negative momentum. The RSI at 69.16 is Neutral, neither overbought nor oversold. The STOCH value of 96.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4540.

Tsumura & Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4540	76 Outperform	¥307.02B	11.03	9.05%	3.34%	10.51%	9.62%
4530	73 Outperform	¥310.46B	15.73	7.11%	2.48%	3.53%	38.23%
4569	69 Neutral	¥79.12B	9.26	―	3.46%	11.65%	93.46%
4506	66 Neutral	¥901.06B	5.85	79.99%	―	29.92%	―
4547	66 Neutral	¥189.53B	13.56	6.57%	2.49%	13.11%	41.57%
4551	65 Neutral	―	―	―	―	10.91%	2.93%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Tsumura & Co Corporate Events

Tsumura Completes Acquisition of Shanghai Hongqiao Stake

Tsumura & Co. has completed the acquisition of a 51% stake in Shanghai Hongqiao Traditional Chinese Drug Pieces Co., Ltd., a company specializing in pharmaceutical production and traditional Chinese medicine services. This acquisition is expected to be reflected in Tsumura’s financial statements from the mid-term period of the fiscal year ending March 2026, potentially impacting the company’s earnings and dividend forecasts.

Tsumura & Co. Revises Medium-Term Plan with Higher Profit Targets

Tsumura & Co. has revised its Medium-Term Management Plan for FY2025-FY2027, increasing its operating profit and ROE targets due to better-than-expected business performance. The upward revision is driven by the consolidation of Shanghai Hongqiao Traditional Chinese Drug Pieces Co., Ltd., cost reductions, and effective expense management, positioning the company for improved financial outcomes despite inflationary pressures.

Tsumura & Co. Revises Earnings and Dividend Forecasts for FY 2026

Tsumura & Co. has revised its earnings and dividend forecasts for the fiscal year ending March 31, 2026, due to recent performance trends and strategic acquisitions. The company expects a 5.3% increase in net sales, primarily driven by the consolidation of Shanghai Hongqiao Traditional Chinese Drug Pieces Co., Ltd. Although operating profit is projected to rise by 49.8%, the impact of the acquisition is expected to be minor due to associated costs. The company has also increased its annual dividend forecast by 8 yen per share, reflecting improved profitability and a commitment to shareholder returns.

Tsumura & Co. Reports Mixed Financial Results Amid Strategic Adjustments

Tsumura & Co. reported a slight increase in net sales for the six months ending September 30, 2025, but experienced significant declines in operating and ordinary profits compared to the previous year. Despite these challenges, the company has revised its dividend forecast upwards, indicating confidence in future performance. The financial results reflect a challenging period with decreased profitability, yet the company’s strategic adjustments, including dividend revisions, suggest a focus on long-term stability and growth.