Kawasaki Geological Engineering Co., Ltd. (4673) AI Stock Analysis

• Market Cap: ¥3.61B
• Dividend Yield: 1.16%
• Average Volume (3M): 15.04K
• Price to Earnings (P/E): 6.4
• Beta (1Y): 0.93
• Revenue Growth: 29.12%
• EPS Growth: 428.78%
• Country: JP
• Employees: 366
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 96.10
• Shares Outstanding: 1,057,980
• 10 Day Avg. Volume: 22,480
• 30 Day Avg. Volume: 15,040
• PEG Ratio: 0.08
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 0.31
• P/FCF Ratio: -2.51
• 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: ¥4,661.00 ▼(-1.25% Downside)
• Action: Upgraded Date: 01/17/26
• Date: Action: Upgraded 01/17/26

The score is driven by strong valuation (low P/E and a 3.20% dividend) and positive technical trend signals (price above key moving averages with positive MACD). These positives are tempered by financial execution risk, as 2025 showed sharply negative operating and free cash flow alongside rising debt, making cash conversion the key swing factor.

Positive Factors

Revenue and net income growth

Strong top‑line and profit acceleration in 2025 indicates durable demand pickup and improved project margins. Sustained revenue and net income growth can expand backlog, improve funding capacity for contract execution, and support reinvestment into capabilities and steady cash returns.

Growing equity base / balance sheet buffer

A larger equity base strengthens the company’s capital cushion against project timing swings and cost overruns. Improved equity provides long‑term flexibility for bidding on large public works, absorbing volatility and reducing insolvency risk while supporting access to external financing when needed.

Essential, specialized infrastructure services

Core business serves infrastructure and public works where demand is structural and recurring. Specialized geotechnical expertise creates higher switching costs and technical barriers, supporting stable multi‑year contracts, resilient revenue streams, and long‑term client relationships versus commodity competitors.

Negative Factors

Severe cash flow deterioration

A sharp swing to large negative operating and free cash flow undermines the company's ability to fund working capital and capex from operations. Persistently weak cash conversion increases refinancing, supplier and project execution risk and can force corrective measures that harm long‑term growth.

Rising leverage

Increasing debt levels reduce financial headroom and raise interest and covenant risk, especially alongside negative cash flow. Higher leverage constrains strategic flexibility, limits ability to absorb project delays, and increases sensitivity to interest costs and cyclical downturns over the medium term.

Margin and earnings cyclicality

Profitability varies with project mix and input costs, making margins and earnings less predictable. This structural sensitivity complicates capital allocation and forecasting, heightens the impact of adverse cost or procurement shifts, and can compress returns during slower cycles.

Kawasaki Geological Engineering Co., Ltd. Business Overview & Revenue Model

Company Description

Kawasaki Geological Engineering Co., Ltd. provides geological survey services in Japan and internationally. The company offers ocean, resources, and energy related services. It also provides disaster prevention/reduction; maintenance; analysis/design; and research and development services. Kawasaki Geological Engineering Co., Ltd. was founded in 1943 and is headquartered in Tokyo, Japan.

How the Company Makes Money

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Kawasaki Geological Engineering Co., Ltd. Financial Statement Overview

Summary

Income statement strength (revenue +23.7% in 2025 and net income rising to 620.5M) is offset by the primary risk: cash flow deterioration, with 2025 operating cash flow at -1.46B and free cash flow at -1.58B. The balance sheet is supported by higher equity (5.25B), but rising debt (3.61B) adds pressure if cash conversion does not recover.

Income Statement

Revenue growth accelerated meaningfully in the latest year (+23.7% in 2025 vs. low single-digit in 2024), and profitability improved versus the weaker 2023 period as net income rose to 620.5M (from 353.8M in 2024 and 157.8M in 2023). That said, margins have been somewhat cyclical across the cycle (stronger in 2021–2022, softer in 2023), indicating earnings sensitivity to project mix and cost pressures.

Balance Sheet

The balance sheet is supported by a growing equity base (equity increased to 5.25B in 2025 from 4.53B in 2024), which helps absorb volatility. However, leverage moved up in 2025 as total debt increased to 3.61B (from 2.90B in 2024), and prior years show moderate leverage levels (debt-to-equity was ~0.64 in 2024 and ~0.81 in 2023). Overall, financial flexibility looks adequate, but rising debt is a key watch item.

Cash Flow

Cash generation is the main weak spot: operating cash flow swung to a large outflow in 2025 (-1.46B) after being solidly positive in 2024 (766.8M), and free cash flow also turned sharply negative in 2025 (-1.58B). While 2023–2024 showed positive free cash flow and reasonably close conversion versus earnings (e.g., 2024 free cash flow of 715.7M vs. net income of 353.8M), the repeated volatility (including negative operating and free cash flow in 2022) raises working-capital and project-timing risk.

Breakdown	TTM	Nov 2025	Nov 2024	Nov 2023	Nov 2022	Nov 2021
Income Statement
Total Revenue	10.28B	12.71B	9.56B	9.29B	9.38B	8.76B
Gross Profit	2.69B	3.18B	2.66B	2.34B	2.75B	2.61B
EBITDA	642.56M	853.46M	628.64M	311.89M	716.93M	674.16M
Net Income	466.68M	620.50M	353.84M	157.79M	330.14M	344.03M
Balance Sheet
Total Assets	8.17B	12.14B	9.92B	9.77B	8.74B	8.28B
Cash, Cash Equivalents and Short-Term Investments	1.18B	1.10B	1.83B	1.77B	761.80M	1.03B
Total Debt	1.15B	3.61B	2.90B	3.40B	2.55B	2.39B
Total Liabilities	3.41B	6.89B	5.39B	5.56B	4.73B	4.60B
Stockholders Equity	4.76B	5.25B	4.53B	4.21B	4.01B	3.69B
Cash Flow
Free Cash Flow	0.00	-1.58B	725.74M	321.49M	-333.91M	338.94M
Operating Cash Flow	0.00	-1.46B	766.83M	419.75M	-75.84M	456.04M
Investing Cash Flow	0.00	53.80M	-8.34M	-114.26M	-266.00M	-88.85M
Financing Cash Flow	0.00	660.19M	-691.96M	678.12M	78.13M	-420.29M

Kawasaki Geological Engineering Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4720.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4673, the sentiment is Negative. The current price of 4720 is above the 20-day moving average (MA) of 4450.00, above the 50-day MA of 4599.90, and above the 200-day MA of 4373.16, indicating a bearish trend. The MACD of -109.72 indicates Positive momentum. The RSI at 39.19 is Neutral, neither overbought nor oversold. The STOCH value of 43.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4673.

Kawasaki Geological Engineering Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9768	77 Outperform	¥28.66B	11.92	―	2.37%	3.01%	-13.60%
4673	73 Outperform	¥3.61B	6.39	―	1.16%	29.12%	428.78%
9233	73 Outperform	¥22.70B	-39.49	―	3.59%	3.28%	-5.52%
9621	73 Outperform	¥85.89B	13.86	―	1.25%	2.61%	-13.38%
4642	70 Outperform	¥8.19B	16.79	―	2.03%	16.10%	-10.63%
1914	67 Neutral	¥15.23B	4.49	―	3.68%	5.82%	-22.14%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%