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

• Market Cap: ¥40.14B
• Dividend Yield: 2.75%
• Average Volume (3M): 63.87K
• Price to Earnings (P/E): 17.9
• Beta (1Y): 0.29
• 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: ¥1,425.00 ▲(5.09% Upside)

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

Consistent revenue growth

Consistent top-line growth across recent years indicates durable product demand and improving market penetration. Sustained revenue expansion supports continued investment in R&D, manufacturing and commercial capabilities, helping fund the pipeline and partially offset margin headwinds over the medium term.

Stable equity ratio

A stable equity ratio and solid capital base provide financial resilience, enabling the company to absorb operational shocks and fund strategic initiatives without immediate equity dilution. This stability underpins creditor confidence and preserves flexibility for medium-term investments or partnerships.

Positive operating margins

Maintaining positive EBIT and EBITDA margins indicates the core business remains operationally profitable and can cover fixed costs. This structural profitability supports ongoing operations and incremental reinvestment while management addresses margin compression, improving chances of medium-term recovery.

Negative Factors

Declining profitability margins

Material declines in gross and net margins point to sustained cost increases or pricing pressure that erode competitive economics. If structural, this reduces cash available for R&D, capex and dividends, forcing trade-offs that can weaken long-term competitiveness and growth reinvestment.

Increasing leverage

Rising leverage reduces financial flexibility and raises interest and refinancing risk, particularly as return on equity has fallen. Higher debt burdens constrain the company's ability to pursue acquisitions, fund large projects, or withstand revenue shocks without relying on more costly external financing.

Negative free cash flow

Persistent negative free cash flow and a steep decline in FCF growth undermine the firm's capacity to self-fund capex, R&D and payouts. Over the medium term this heightens dependence on external funding, increases financing costs and limits strategic flexibility during downturns or competitive investment needs.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 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: Neutral
• Last Price: 1356.00
• 50DMA: Negative
• 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:4577, the sentiment is Neutral. The current price of 1356 is above the 20-day moving average (MA) of 1352.65, above the 50-day MA of 1334.05, and above the 200-day MA of 1170.95, indicating a neutral trend. The MACD of 0.68 indicates Positive momentum. The RSI at 45.51 is Neutral, neither overbought nor oversold. The STOCH value of 35.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
4595	85 Outperform	¥33.95B	12.08	―	6.29%	-12.03%	-19.61%
4554	71 Outperform	¥46.60B	15.52	6.49%	2.39%	12.01%	-51.38%
4577	63 Neutral	¥40.14B	17.94	―	2.75%	7.56%	-48.91%
4574	63 Neutral	¥14.27B	16.78	―	―	-5.41%	―
4538	60 Neutral	¥19.93B	-4.86	―	3.71%	7.50%	-281.41%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
2929	47 Neutral	¥19.44B	-10.34	―	3.65%	9.53%	-155.76%

Daito Pharmaceutical Co., Ltd. Corporate Events

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.

Daito Pharmaceutical Announces Share Repurchase

Daito Pharmaceutical Co., Ltd. has announced the repurchase of its own shares, acquiring 124,100 shares at a total cost of 153,432,400 yen through market purchases on the Tokyo Stock Exchange. This move is part of a larger plan approved by the Board of Directors to repurchase up to 1,000,000 shares, equivalent to 3.3% of the total issued shares, with a budget of up to 1,500 million yen, aiming to enhance shareholder value.

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.

Daito Pharmaceutical Announces Share Repurchase Plan

Daito Pharmaceutical Co., Ltd. announced the repurchase of 134,000 of its own shares, amounting to 163,958,000 yen, as part of a broader plan to buy back up to 1,000,000 shares by May 2026. This strategic move is likely aimed at enhancing shareholder value and optimizing the company’s capital structure.

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.