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

• Market Cap: ¥3.98B
• Dividend Yield: 1.16%
• Average Volume (3M): 15.04K
• Price to Earnings (P/E): 6.5
• Beta (1Y): 0.90
• 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: ¥5,536.00 ▲(17.29% Upside)

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 acceleration and profit rebound

Sustained top-line acceleration and a clear rebound in net income signal stronger demand and improved project economics. Over a multi-month horizon this supports backlog conversion, reinvestment capacity, and earnings resilience provided cash generation stabilizes, underpinning core business health.

Stable project-driven revenue mix

A project-based model with long-term government and private contracts provides durable revenue visibility and repeat business. Diversified client base across construction, agencies and resources reduces single-client risk and supports steady utilization, aiding predictable revenue over the medium term.

Growing equity base supports financial flexibility

A rising equity base strengthens the balance sheet and provides a buffer against project timing shocks and cyclical swings. This improves capacity to absorb losses, maintain credit lines, and finance selective investments or working-capital needs without immediate reliance on external funding.

Negative Factors

Severe operating cash-flow volatility

Persistent swings to negative operating and free cash flow materially raise execution and liquidity risk. Over several months this can constrain working-capital funding for projects, increase reliance on external financing, and limit the firm's ability to invest or absorb delays in receivables.

Rising debt and higher leverage

Increasing indebtedness reduces financial flexibility and raises interest and covenant risks. Combined with cash-flow volatility, higher leverage can constrain bidding on large projects, limit strategic maneuvering, and heighten refinancing pressure over a 2–6 month horizon if cash generation doesn't recover.

Cyclical margins and project sensitivity

Profitability tied to project mix and input costs creates recurring margin volatility. Structurally, this means earnings are vulnerable to competitive bidding, commodity and labor cost swings, and delayed projects, making margin sustainability and forecasting less reliable over medium-term planning horizons.

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

Kawasaki Geological Engineering Co., Ltd. generates revenue primarily through its consulting and engineering services, which are billed on a project basis. Key revenue streams include fees from geological surveys, environmental assessments, and geotechnical investigations. The company often engages in long-term contracts with government bodies and private sector clients, providing a stable income source. Additionally, partnerships with construction firms and environmental agencies enhance its market reach and contribute to earnings. The company may also benefit from ancillary services such as training and advisory roles, further diversifying its revenue portfolio.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 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	2.81B	2.65B
EBITDA	982.66M	1.13B	802.13M	496.56M	770.86M	763.60M
Net Income	466.68M	620.50M	353.84M	157.79M	330.14M	344.03M
Balance Sheet
Total Assets	8.17B	11.96B	9.77B	9.61B	8.61B	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	6.71B	5.23B	5.40B	4.60B	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	715.73M	316.29M	-336.57M	327.83M
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: Positive
• Last Price: 4720.00
• 50DMA: Positive
• 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:4673, the sentiment is Positive. The current price of 4720 is below the 20-day moving average (MA) of 4739.00, above the 50-day MA of 4601.10, and above the 200-day MA of 4066.35, indicating a neutral trend. The MACD of 16.98 indicates Positive momentum. The RSI at 49.56 is Neutral, neither overbought nor oversold. The STOCH value of 30.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
1870	79 Outperform	¥99.94B	9.59	―	3.63%	35.73%	62.37%
1926	78 Outperform	¥127.19B	13.95	―	3.22%	12.23%	43.29%
4673	73 Outperform	¥3.98B	6.47	―	1.16%	29.12%	428.78%
1914	67 Neutral	¥14.21B	11.01	―	3.68%	5.82%	-22.14%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1888	59 Neutral	¥58.60B	13.29	―	2.84%	15.45%	43.95%