Original Engineering Consultants Co., Ltd. (4642) AI Stock Analysis

• Market Cap: ¥9.98B
• Dividend Yield: 1.98%
• Average Volume (3M): 11.99K
• Price to Earnings (P/E): 19.6
• Beta (1Y): 0.34
• Revenue Growth: 16.10%
• EPS Growth: -10.63%
• Country: JP
• Employees: 343
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): -28.69
• Shares Outstanding: 7,396,800
• 10 Day Avg. Volume: 9,840
• 30 Day Avg. Volume: 11,990
• PEG Ratio: 0.29
• Price to Book (P/B): 0.94
• Price to Sales (P/S): 0.93
• P/FCF Ratio: 43.50
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: ¥1,912.00 ▲(18.54% Upside)

The overall stock score of 74 reflects the company's strong financial performance, characterized by solid revenue growth and profitability, and a robust balance sheet. The technical analysis indicates a neutral to slightly bullish trend, while the valuation suggests the stock is fairly priced with a modest dividend yield. The absence of earnings call data and corporate events does not impact the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for services and effective market strategies, supporting long-term business expansion.

Balance Sheet Health

A strong balance sheet with low leverage enhances financial stability, providing resilience against economic fluctuations.

Profitability Margins

High profitability margins reflect efficient operations and cost management, contributing to sustained financial health.

Negative Factors

Cash Flow Decline

Declining cash flow can limit investment capacity and financial flexibility, potentially impacting long-term growth initiatives.

Earnings Decline

A decline in EPS growth suggests challenges in maintaining profitability, which could affect investor confidence and valuation.

Cash Generation Efficiency

Suboptimal cash generation efficiency may hinder the company's ability to fund operations and growth without external financing.

Original Engineering Consultants Co., Ltd. Business Overview & Revenue Model

Company Description

Original Engineering Consultants Co., Ltd. provides engineering consultancy services in Japan. The company offers various consulting services, such as prefeasibility study, investigation, planning, detailed design, diagnosis, construction supervision, and relevant services in the fields of water supply, wastewater collection systems, wastewater and sludge treatment, waste management, septic tank planning, urban runoff control planning, water related BOP business coordinating, sewerage works, industrial wastewater, night soil treatment, refusal disposal, stream pollution, rain over flood control, and sanitation and solid waste treatment. It also undertakes various projects in other Asian countries, the Pacific Islands, the Middle East, and South America. Original Engineering Consultants Co., Ltd. was incorporated in 1962 and is headquartered in Tokyo, Japan.

How the Company Makes Money

The company generates revenue primarily through consulting fees charged for its engineering and project management services. Key revenue streams include fixed-price contracts for specific projects, time-and-materials billing for ongoing services, and retainer agreements with clients for long-term consultancy. Additionally, Original Engineering Consultants Co., Ltd. may engage in partnerships with construction firms and governmental agencies, allowing for shared project opportunities and risk mitigation, which enhances its overall earnings potential.

Original Engineering Consultants Co., Ltd. Financial Statement Overview

Summary

Original Engineering Consultants Co., Ltd. exhibits a strong financial position, marked by commendable revenue growth, high profitability margins, and a robust balance sheet with low leverage. While cash flow generation has declined, the company maintains an efficient cash flow relative to net income. These factors collectively suggest a well-managed financial strategy poised for sustainable growth.

Income Statement

The company demonstrates solid revenue growth, with a year-over-year increase of 7.37% from 2023 to 2024, and significant improvements in profitability metrics. The gross profit margin stands at a healthy 33.53% for 2024, with a net profit margin of 9.13%, reflecting strong operational efficiency. The EBIT margin is 11.88% and the EBITDA margin is 13.93%, both indicating robust earnings potential. The company's consistent revenue growth and improving profit margins contribute positively to its financial health.

Balance Sheet

The balance sheet is strong, with a low debt-to-equity ratio of 0.0042, indicating minimal leverage risk. The return on equity (ROE) is 9.21%, showcasing efficient use of shareholders' funds to generate earnings. The equity ratio is an impressive 84.93%, pointing to a solid capital structure with the majority of assets financed through equity. These metrics highlight the company's financial stability and low risk profile.

Cash Flow

The cash flow performance is stable, with a marginal decline in free cash flow growth, which fell by 56.21% from 2023 to 2024 due to lower operating cash flows and capital expenditures. However, the operating cash flow to net income ratio remains positive at 0.37, and the free cash flow to net income ratio is 0.23, indicating that the company generates sufficient cash to cover its net income, though there is room for improvement in cash generation efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.68B	7.12B	6.63B	6.49B	6.21B	6.27B
Gross Profit	1.86B	2.37B	2.20B	2.12B	1.92B	2.01B
EBITDA	1.02B	992.22M	914.52M	795.46M	741.39M	733.58M
Net Income	574.94M	650.18M	477.35M	415.61M	376.06M	375.46M
Balance Sheet
Total Assets	11.56B	8.31B	7.89B	7.60B	7.10B	7.02B
Cash, Cash Equivalents and Short-Term Investments	6.60B	3.85B	3.98B	3.74B	3.55B	3.38B
Total Debt	1.51B	29.66M	58.23M	84.29M	111.34M	119.83M
Total Liabilities	3.90B	1.25B	1.39B	1.44B	1.18B	1.32B
Stockholders Equity	7.66B	7.06B	6.49B	6.15B	5.91B	5.70B
Cash Flow
Free Cash Flow	0.00	151.89M	346.85M	623.33M	220.90M	-172.69M
Operating Cash Flow	0.00	241.63M	399.40M	691.72M	282.42M	-102.03M
Investing Cash Flow	0.00	-152.23M	63.97M	-277.00M	120.90M	-68.23M
Financing Cash Flow	0.00	-222.69M	-224.58M	-225.29M	-227.52M	-196.60M

Original Engineering Consultants Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1613.00
• 50DMA: Negative
• 100DMA: Negative
• 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:4642, the sentiment is Positive. The current price of 1613 is above the 20-day moving average (MA) of 1529.20, below the 50-day MA of 1690.92, and above the 200-day MA of 1567.97, indicating a neutral trend. The MACD of -25.21 indicates Negative momentum. The RSI at 51.72 is Neutral, neither overbought nor oversold. The STOCH value of 74.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4642.

Original Engineering Consultants Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6542	79 Outperform	¥8.77B	12.21	―	3.19%	1.85%	8.25%
4642	74 Outperform	¥9.98B	19.56	―	1.98%	16.10%	-10.63%
1905	72 Outperform	¥8.14B	11.22	―	4.31%	-8.48%	54.87%
1897	71 Outperform	¥6.36B	33.69	―	1.69%	-28.06%	-43.82%
2311	68 Neutral	¥7.39B	13.78	―	3.85%	11.25%	26.01%
1401	67 Neutral	¥10.45B	18.58	―	1.06%	21.18%	53.16%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%