FALCO HOLDINGS Co., Ltd (4671) AI Stock Analysis

• Market Cap: ¥26.25B
• Dividend Yield: 4.81%
• Average Volume (3M): 15.38K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.59
• Revenue Growth: 1.23%
• EPS Growth: 9.96%
• Country: JP
• Employees: 1,117
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Diagnostics & Research
• EPS (TTM): 60.64
• Shares Outstanding: 10,680,177
• 10 Day Avg. Volume: 10,950
• 30 Day Avg. Volume: 15,383
• PEG Ratio: 0.64
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.57
• P/FCF Ratio: 15.96
• 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: 73 Outperform
• Price Target: ¥2,842.00 ▲(6.01% Upside)
• Action: Upgraded Date: 10/23/25
• Date: Action: Upgraded 10/23/25

The stock's overall score is driven by strong valuation metrics and positive technical indicators. Financial performance is stable but hindered by declining revenue growth and cash flow challenges. The absence of earnings call insights and corporate events does not impact the overall score.

Positive Factors

Strong Balance Sheet / Low Leverage

Very low leverage and a high equity ratio give Falco durable financial flexibility. This solidity supports capital spending, acquisitions, and dividend stability through cycles, and reduces refinancing risk—key for a healthcare services firm with steady long-term demand.

Operating Cash Generation Quality

Operating cash flow materially exceeds accounting profits, indicating earnings are backed by cash. That sustained cash generation supports ongoing operations, working capital and service investments even if FCF lags, and signals resilient core cash conversion in diagnostics.

Stable Gross Margins and Improving Net Margin

Consistent gross margins and an improving net margin point to durable cost control and pricing power in its clinical testing business. Margin stability helps protect earnings against volume swings and underpins the company's ability to fund R&D and maintain service quality.

Negative Factors

Declining Revenue

Sustained top-line decline weakens scale economics in a service business where fixed costs and lab capacity matter. Continued revenue contraction can erode pricing leverage, reduce utilization of facilities, and limit reinvestment capacity over the medium term.

Declining Free Cash Flow / Cash Retention

A falling FCF growth rate and sub‑1.0 FCF/Net Income ratio imply the company retains less cash from profits. That reduces capacity to fund capex, acquisitions, or higher dividends without tapping reserves, challenging long-term investment flexibility despite strong OCF.

Erosion in EBIT / EBITDA Margins

Trailing declines in operating margins suggest rising cost pressure or mix shifts in testing services. Persistent margin erosion would compress returns on capital and limit ability to boost ROE, undermining profitability resilience in a competitive diagnostics market.

FALCO HOLDINGS Co., Ltd Business Overview & Revenue Model

Company Description

FALCO HOLDINGS Co., Ltd., a medical service company, primarily provides clinical testing and dispensing pharmacy services to medical institutions and companies in Japan. It offers clinical testing services in the fields of genetic tests, biochemistry, hematology, pathology, immunology, microbiology, and radio immunoassay; genetic testing services; and genomic-based drug discovery and biotechnology drug development services. The company also provides medical information technology services; food sanitation and environmental testing services; and food related genetic testing services to food manufacturers, retailers, and restaurants. In addition, it is involved in the dispensing pharmacies and drugstores business; and development and sale of various medical information systems, including @home Dr. electronic medical charts for clinics with concentrated clinical testing, as well as TASCAL for ASP, a medical support system. The company was founded in 1962 and is headquartered in Kyoto, Japan.

How the Company Makes Money

FALCO HOLDINGS generates revenue through a combination of direct product sales, licensing agreements, and strategic partnerships. The company earns income primarily from the sale of its manufactured goods, which are distributed through both retail and wholesale channels. Additionally, FALCO engages in joint ventures and collaborations with other firms, enhancing its product offerings and market reach. The company also benefits from recurring revenue streams through service contracts and maintenance agreements associated with its industrial products.

FALCO HOLDINGS Co., Ltd Financial Statement Overview

Summary

FALCO HOLDINGS Co., Ltd demonstrates stable financial health with strong balance sheet metrics and reasonable profitability. The company benefits from solid margins and low debt levels, but faces challenges in revenue growth and cash flow efficiency.

Income Statement

The company showcases stable income statement metrics with a modest Gross Profit Margin averaging around 30.8% in the latest year. Net Profit Margin improved to 4.4% from the previous year, indicating better cost management. However, the revenue growth rate has been negative, reflecting a decline from the peak in 2022. The EBIT and EBITDA margins are consistent but show a downward trend from prior years.

Balance Sheet

The balance sheet remains solid with a low Debt-to-Equity Ratio of 0.06, indicating low leverage and financial risk. Return on Equity (ROE) stands at 7.6%, showing moderate profitability. The Equity Ratio is high at 70.1%, indicating strong solvency and financial stability. Overall, the company maintains a robust equity base with manageable liabilities.

Cash Flow

The cash flow statement reveals a decline in Free Cash Flow Growth Rate, with the latest year showing a decrease. Operating Cash Flow to Net Income Ratio remains healthy at 1.4, showcasing efficient cash generation relative to profits. However, Free Cash Flow to Net Income Ratio is 0.8, suggesting potential for improvement in cash retention.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	43.52B	43.31B	43.01B	46.91B	50.01B	43.61B
Gross Profit	13.57B	13.35B	12.92B	14.64B	17.32B	13.70B
EBITDA	3.83B	3.72B	3.56B	4.75B	6.55B	3.88B
Net Income	1.98B	1.92B	1.67B	2.26B	3.53B	1.85B
Balance Sheet
Total Assets	36.75B	36.02B	36.42B	38.89B	40.26B	37.07B
Cash, Cash Equivalents and Short-Term Investments	9.32B	9.42B	10.06B	12.60B	10.64B	11.62B
Total Debt	1.24B	1.44B	817.00M	2.80B	4.07B	5.90B
Total Liabilities	12.21B	10.76B	10.40B	12.30B	16.78B	16.59B
Stockholders Equity	24.54B	25.25B	26.03B	26.59B	23.48B	20.48B
Cash Flow
Free Cash Flow	0.00	1.54B	2.19B	708.00M	1.94B	1.32B
Operating Cash Flow	0.00	2.62B	3.43B	2.09B	4.13B	2.94B
Investing Cash Flow	0.00	-1.18B	-1.45B	322.00M	-2.69B	-52.00M
Financing Cash Flow	0.00	-2.08B	-4.53B	-448.00M	-2.41B	1.46B

FALCO HOLDINGS Co., Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2681.00
• 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:4671, the sentiment is Negative. The current price of 2681 is below the 20-day moving average (MA) of 2691.25, below the 50-day MA of 2698.12, and above the 200-day MA of 2498.46, indicating a neutral trend. The MACD of -4.46 indicates Positive momentum. The RSI at 46.72 is Neutral, neither overbought nor oversold. The STOCH value of 37.09 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4671.

FALCO HOLDINGS Co., Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4694	74 Outperform	¥152.39B	15.47	5.94%	3.34%	5.90%	16.30%
2395	74 Outperform	¥66.28B	14.39	―	2.79%	28.06%	19.48%
4671	73 Outperform	¥26.25B	11.05	―	4.81%	1.23%	9.96%
4538	60 Neutral	¥21.72B	5.79	―	3.71%	7.50%	-281.41%
4579	54 Neutral	¥22.36B	87.60	―	―	9.87%	-24.41%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4563	47 Neutral	¥22.55B	-4.22	-184.71%	―	56.75%	-97.56%