Daito Pharmaceutical Co., Ltd. (4577) AI Stock Analysis

• Market Cap: ¥43.78B
• Dividend Yield: 2.75%
• Average Volume (3M): 63.87K
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.30
• Revenue Growth: 7.56%
• EPS Growth: -48.91%
• Country: JP
• Employees: 1,070
• Sector: Healthcare
• Sector Strength: 45
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): N/A
• Shares Outstanding: 30,096,880
• 10 Day Avg. Volume: 54,390
• 30 Day Avg. Volume: 63,866
• PEG Ratio: -0.39
• Price to Book (P/B): 0.58
• Price to Sales (P/S): 0.59
• P/FCF Ratio: -31.31
• 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: 63 Neutral
• Price Target: ¥1,566.00 ▲(15.49% Upside)
• Action: Reiterated Date: 10/16/25
• Date: Action: Reiterated 10/16/25

Daito Pharmaceutical Co., Ltd. receives an overall score of 63, primarily influenced by its mixed financial performance and bearish technical indicators. While the company shows revenue growth, declining profit margins and increasing leverage are concerns. The stock's valuation is reasonable with an attractive dividend yield, but technical indicators suggest a lack of strong momentum. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Revenue Growth

Sustained mid-single-digit revenue growth indicates continued product demand and market penetration. Over a 2-6 month horizon this supports stable top-line scalability, funds incremental R&D or marketing, and provides a base to regain margin through productivity or portfolio optimization.

Diversified Product Mix

A mix of prescription and OTC products across multiple therapeutic areas reduces single-product dependency and revenue concentration risk. This diversification helps stabilize cash flows across channels and makes long-term demand less vulnerable to a single regulatory or clinical setback.

Stable Capital Base

A stable equity ratio signals a resilient capital structure that can absorb shocks and supports access to financing for strategic investments. Over months this stability permits measured leverage use for growth without immediate solvency pressure, aiding long-term operational planning.

Negative Factors

Margin Erosion

Significant compression in gross and net margins points to pricing pressure or rising input costs that undermine profitability. Persisting margin erosion reduces internal funding for R&D and commercialization, weakening competitive positioning and long-term earnings resilience.

Rising Leverage and Declining ROE

Increasing leverage paired with falling ROE suggests borrowed capital isn't generating proportional returns. This combination raises financial risk, restricts strategic flexibility, and may increase cost of capital, complicating investments or dividend policy over the medium term.

Negative Free Cash Flow

Material decline into negative free cash flow limits ability to fund capex, pay down debt, or sustain dividends without external financing. Persistent negative FCF can force strategic trade-offs, raise refinancing needs, and impair long-term investment in pipelines or commercialization.

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

Company Description

Daito Pharmaceutical Co.,Ltd. manufactures and sells pharmaceutical products worldwide. The company offers various active pharmaceutical ingredients and intermediates, prescription drugs, OTC drugs, and home-delivery medicines; formulations in various forms, such as tablets, capsules, troches, granules, and powders; and contract manufacturing services for formulations of medicinal products to pharmaceutical companies. It also sells health food products. The company was formerly known as Daito Corporation and changed its name to Daito Pharmaceutical Co.,Ltd. in 1992. Daito Pharmaceutical Co.,Ltd. was incorporated in 1942 and is headquartered in Toyama, Japan.

How the Company Makes Money

Daito Pharmaceutical generates revenue through the sale of its pharmaceutical products, which include both prescription drugs and over-the-counter medications. The company earns income from direct sales to healthcare providers, pharmacies, and hospitals. Additionally, Daito may engage in partnerships with other pharmaceutical firms for collaborative research and development, licensing agreements, and distribution deals, which can provide substantial revenue streams. The company's financial performance is also influenced by factors such as patent protection on its products, market demand, and regulatory approvals, which can impact the pricing and availability of its medications.

Daito Pharmaceutical Co., Ltd. Financial Statement Overview

Summary

Daito Pharmaceutical Co., Ltd. demonstrates a mixed financial performance with revenue growth but declining profit margins and increasing leverage. The balance sheet shows a stable equity position, but rising debt levels could impact future financial flexibility. Cash flow challenges, particularly in free cash flow, suggest the need for strategic adjustments to enhance cash generation and profitability.

Income Statement

Daito Pharmaceutical Co., Ltd. has shown a consistent revenue growth rate of 6.91% in the latest year, indicating a positive trajectory. However, the gross profit margin has decreased over the years, from 26.36% in 2022 to 17.06% in 2025, which could suggest rising costs or pricing pressures. The net profit margin has also declined from 10.74% in 2022 to 3.77% in 2025, reflecting challenges in maintaining profitability. Despite these challenges, the company has managed to maintain a positive EBIT and EBITDA margin, although both have seen a downward trend.

Balance Sheet

The company's debt-to-equity ratio has increased from 0.07 in 2022 to 0.23 in 2025, indicating a rising leverage which could pose a risk if not managed properly. The return on equity has decreased from 9.87% in 2022 to 3.67% in 2025, suggesting a decline in the efficiency of generating profits from shareholders' equity. The equity ratio remains stable, indicating a solid capital structure, but the increasing debt levels warrant caution.

Cash Flow

The free cash flow has been negative in recent years, with a significant decline in free cash flow growth rate of -68.60% in 2025. This indicates potential challenges in generating sufficient cash to cover investments and obligations. The operating cash flow to net income ratio has been relatively stable, suggesting that the company is still generating cash from its operations, but the negative free cash flow to net income ratio highlights the need for improved cash management.

Breakdown	TTM	May 2024	May 2023	May 2022	May 2021	May 2020
Income Statement
Total Revenue	50.98B	50.64B	46.90B	45.10B	43.46B	48.71B
Gross Profit	8.95B	8.64B	9.84B	10.33B	11.46B	10.79B
EBITDA	7.12B	7.41B	7.92B	8.96B	9.88B	9.04B
Net Income	1.99B	1.91B	3.29B	3.60B	4.67B	4.25B
Balance Sheet
Total Assets	78.84B	78.00B	77.71B	70.55B	64.94B	57.74B
Cash, Cash Equivalents and Short-Term Investments	2.15B	2.21B	2.73B	3.61B	4.38B	3.37B
Total Debt	11.94B	11.88B	8.72B	4.96B	3.45B	3.39B
Total Liabilities	26.63B	25.93B	25.44B	19.58B	17.27B	15.82B
Stockholders Equity	52.17B	52.00B	52.07B	50.67B	47.30B	41.62B
Cash Flow
Free Cash Flow	-1.52B	-957.00M	-1.09B	-1.40B	-363.00M	-1.17B
Operating Cash Flow	920.00M	5.90B	5.18B	4.16B	4.37B	5.18B
Investing Cash Flow	-2.64B	-7.37B	-5.93B	-5.57B	-4.40B	-6.32B
Financing Cash Flow	1.98B	1.00B	-183.00M	616.00M	989.00M	1.42B

Daito Pharmaceutical Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1356.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4577, the sentiment is Positive. The current price of 1356 is below the 20-day moving average (MA) of 1393.35, below the 50-day MA of 1368.60, and above the 200-day MA of 1211.67, indicating a bullish trend. The MACD of 28.77 indicates Negative momentum. The RSI at 70.26 is Negative, neither overbought nor oversold. The STOCH value of 88.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4577.

Daito Pharmaceutical Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4886	76 Outperform	¥66.08B	14.41	―	2.52%	5.44%	-20.33%
4534	73 Outperform	¥133.39B	21.89	5.11%	2.34%	4.35%	48.30%
4569	69 Neutral	¥89.33B	9.20	―	3.36%	11.65%	93.46%
4554	68 Neutral	¥57.67B	25.14	6.49%	2.39%	12.01%	-51.38%
4539	64 Neutral	¥6.42B	11.77	―	3.21%	4.25%	―
4577	63 Neutral	¥43.78B	19.77	―	2.75%	7.56%	-48.91%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Daito Pharmaceutical Co., Ltd. Corporate Events

Daito Pharmaceutical Advances Share Buyback Program on Tokyo Stock Exchange

Daito Pharmaceutical Co., Ltd. has repurchased 77,200 shares of its common stock on the Tokyo Stock Exchange between February 1 and February 28, 2026, for a total of 103,725,900 yen. This buyback is conducted under the authority of its Articles of Incorporation pursuant to Article 459, Paragraph 1 of the Companies Act of Japan.

The repurchase is part of a broader program approved by the board on October 10, 2025, authorizing the buyback of up to 1,000,000 shares or 1,500 million yen through May 22, 2026. As of February 28, 2026, the company has cumulatively repurchased 674,400 shares for 875,078,500 yen, signaling ongoing shareholder return efforts and potential support for its share price and capital efficiency metrics.

The most recent analyst rating on (JP:4577) stock is a Hold with a Yen1536.00 price target. To see the full list of analyst forecasts on Daito Pharmaceutical Co., Ltd. stock, see the JP:4577 Stock Forecast page.

Daito Pharmaceutical Continues Share Buybacks Under Ongoing Capital Management Program

Daito Pharmaceutical has repurchased 225,600 shares of its common stock for approximately 303 million yen via market purchases on the Tokyo Stock Exchange during January 2026, under the authority granted by its Articles of Incorporation and Japan’s Companies Act. This latest transaction brings the cumulative buyback under the October 2025 board authorization to 597,200 shares for about 771 million yen, signaling ongoing capital management efforts that may support shareholder value and optimize the company’s capital structure during the authorized repurchase period through May 2026.

The most recent analyst rating on (JP:4577) stock is a Hold with a Yen1398.00 price target. To see the full list of analyst forecasts on Daito Pharmaceutical Co., Ltd. stock, see the JP:4577 Stock Forecast page.

Daito Pharmaceutical Corrects Errors in FY2026 Second-Half Financial Presentation Materials

Daito Pharmaceutical Co., Ltd., a Japan-based pharmaceutical company listed on the Prime Market of the Tokyo Stock Exchange, focuses on developing and providing pharmaceutical and healthcare products. The company announced that it has identified errors in its “Second Half, Fiscal Year Ending May 2026 Financial Results Presentation Materials” released on January 14, 2026, and will partially correct them, updating the version posted on its website accordingly; although the specific corrections were not disclosed in this notice, the move reflects an effort to ensure the accuracy and reliability of its financial disclosures for investors and other stakeholders.

The most recent analyst rating on (JP:4577) stock is a Hold with a Yen1442.00 price target. To see the full list of analyst forecasts on Daito Pharmaceutical Co., Ltd. stock, see the JP:4577 Stock Forecast page.

Daito Pharmaceutical Lifts Interim Profit and Confirms Outlook as Earnings Strengthen

Daito Pharmaceutical reported consolidated net sales of ¥25.14 billion for the six months ended November 30, 2025, up 2.3% year on year, with operating profit rising 10.6% to ¥1.63 billion and profit attributable to owners of parent jumping 35.8% to ¥1.23 billion, indicating an improvement in profitability despite only modest top-line growth. The company’s financial position remained solid with an equity ratio of 67.9%, and it maintained its full‑year forecast for fiscal 2026, targeting 3.7% sales growth and a 20.5% increase in net profit, while planning total annual dividends of ¥40 per share post–stock split, underscoring a continued commitment to shareholder returns and suggesting steady operational performance in a challenging pharmaceutical market.

The most recent analyst rating on (JP:4577) stock is a Hold with a Yen1291.00 price target. To see the full list of analyst forecasts on Daito Pharmaceutical Co., Ltd. stock, see the JP:4577 Stock Forecast page.

Daito Pharmaceutical Advances Share Buyback Program on Tokyo Stock Exchange

Daito Pharmaceutical Co., Ltd., a Japan-based pharmaceutical company listed on the Prime Market of the Tokyo Stock Exchange, operates in the healthcare sector with a focus on pharmaceutical products and drug-related services. The company has repurchased 113,500 shares of its common stock on the Tokyo Stock Exchange between December 1 and December 31, 2025, for a total of ¥150.8 million, as part of a broader share buyback program authorized by its board on October 10, 2025. Under this ongoing program, which runs through May 22, 2026 and allows for repurchases of up to 1,000,000 shares or ¥1.5 billion, Daito Pharmaceutical has cumulatively bought back 371,600 shares for approximately ¥468.2 million as of December 31, 2025, signaling continued capital allocation to shareholder returns and potential enhancement of capital efficiency.

The most recent analyst rating on (JP:4577) stock is a Hold with a Yen1261.00 price target. To see the full list of analyst forecasts on Daito Pharmaceutical Co., Ltd. stock, see the JP:4577 Stock Forecast page.