Nippon RAD Inc. (4736) AI Stock Analysis

• Market Cap: ¥3.36B
• Dividend Yield: 1.54%
• Average Volume (3M): 11.22K
• Price to Earnings (P/E): 9.3
• Beta (1Y): 0.96
• Revenue Growth: 7.59%
• EPS Growth: 16.93%
• Country: JP
• Employees: 270
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 13.20
• Shares Outstanding: 5,355,390
• 10 Day Avg. Volume: 14,110
• 30 Day Avg. Volume: 11,223
• PEG Ratio: 0.37
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 0.91
• P/FCF Ratio: -69.87
• 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: 66 Neutral
• Price Target: ¥698.00 ▲(8.05% Upside)

Nippon RAD Inc. has a strong financial foundation with impressive revenue growth and profitability metrics. However, the stock is currently facing bearish technical indicators, which could impact short-term performance. The valuation is attractive, suggesting potential for long-term appreciation if cash flow issues are addressed.

Positive Factors

Revenue Growth

The significant revenue growth indicates robust demand for Nippon RAD's services, suggesting strong market position and potential for continued expansion.

Balance Sheet Health

Minimal leverage and financial risk provide Nippon RAD with stability and flexibility to invest in growth opportunities without significant financial constraints.

Profitability

Improved profitability margins indicate effective cost management, enhancing Nippon RAD's ability to generate sustainable earnings and reinvest in the business.

Negative Factors

Free Cash Flow Decline

The sharp decline in free cash flow could limit Nippon RAD's ability to fund new projects and maintain financial flexibility, potentially impacting long-term growth.

Margin Pressure

Declining margins, if persistent, could indicate rising costs or pricing pressures, which may affect Nippon RAD's profitability and competitive positioning.

Cash Generation Challenges

Challenges in converting income to free cash flow may hinder Nippon RAD's capacity to invest in growth initiatives and manage financial obligations effectively.

Nippon RAD Inc. Business Overview & Revenue Model

Company Description

Nippon RAD Inc. (4736) is a Japan-based company primarily engaged in the development and provision of advanced technology solutions, particularly in the areas of radio frequency identification (RFID) and automated data capture systems. The company operates within the information technology sector, offering a range of products and services that include RFID tags, readers, and related software solutions. Nippon RAD Inc. focuses on enhancing operational efficiency for businesses across various industries, including logistics, retail, and manufacturing.

How the Company Makes Money

Nippon RAD Inc. generates revenue primarily through the sale of its RFID products and automated data capture solutions. The company earns money by selling hardware such as RFID tags and readers, as well as licensing its proprietary software solutions to clients who require data management systems. Additionally, Nippon RAD Inc. may generate revenue through maintenance and support services for its products, ensuring ongoing customer engagement and satisfaction. Significant partnerships with other tech firms and industries looking to implement RFID technology further bolster its revenue streams, as collaborative projects can lead to large-scale deployments and long-term contracts.

Nippon RAD Inc. Financial Statement Overview

Summary

Nippon RAD Inc. demonstrates strong financial health with robust revenue growth and profitability, supported by a solid balance sheet with minimal leverage. However, cash flow challenges, particularly in free cash flow generation, pose a potential risk.

Income Statement

Nippon RAD Inc. shows strong revenue growth with a TTM growth rate of 17.8%, indicating robust demand for its services. The company maintains healthy profitability with a gross profit margin of 25.3% and a net profit margin of 9.6% in the TTM. EBIT and EBITDA margins are also solid at 9.4% and 11.0%, respectively, reflecting efficient operations. However, the slight decline in gross profit from the previous period suggests potential cost pressures.

Balance Sheet

The balance sheet is very strong, with a minimal debt-to-equity ratio of 0.0006, indicating low leverage and financial risk. The return on equity is impressive at 13.2%, showcasing effective use of shareholder funds. The equity ratio stands at 70.0%, highlighting a stable financial structure with significant equity backing.

Cash Flow

Cash flow performance is mixed. While operating cash flow is positive, the free cash flow has declined significantly, with a negative growth rate of -361.4% in the TTM. The operating cash flow to net income ratio is low at 0.16, suggesting potential issues in converting income to cash. The free cash flow to net income ratio is negative, indicating challenges in generating free cash flow from earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.41B	4.36B	3.98B	3.56B	3.31B	3.01B
Gross Profit	1.03B	1.10B	938.61M	701.69M	611.22M	425.04M
EBITDA	423.96M	456.84M	373.73M	206.04M	85.37M	-130.51M
Net Income	361.49M	417.17M	327.92M	140.68M	19.11M	-178.02M
Balance Sheet
Total Assets	4.85B	4.94B	4.30B	4.11B	4.03B	4.04B
Cash, Cash Equivalents and Short-Term Investments	2.05B	2.18B	2.25B	2.49B	2.68B	2.92B
Total Debt	24.00M	2.13M	3.04M	123.93M	244.81M	360.00M
Total Liabilities	1.43B	1.55B	1.37B	1.49B	1.49B	1.50B
Stockholders Equity	3.42B	3.39B	2.93B	2.62B	2.54B	2.53B
Cash Flow
Free Cash Flow	10.38M	-56.63M	316.20M	-47.01M	160.63M	-57.06M
Operating Cash Flow	202.65M	139.30M	375.68M	1.99M	194.13M	26.27M
Investing Cash Flow	-427.12M	-183.49M	-436.82M	-3.41M	-292.52M	-54.88M
Financing Cash Flow	-54.42M	-26.01M	-172.72M	-186.21M	-146.90M	-145.48M

Nippon RAD Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 646.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4736, the sentiment is Negative. The current price of 646 is above the 20-day moving average (MA) of 637.05, below the 50-day MA of 663.20, and below the 200-day MA of 718.08, indicating a bearish trend. The MACD of -10.25 indicates Negative momentum. The RSI at 40.84 is Neutral, neither overbought nor oversold. The STOCH value of 69.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4736.

Nippon RAD Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3682	72 Outperform	¥4.70B	18.99	―	2.99%	1.14%	23.89%
5250	67 Neutral	¥4.27B	37.23	―	1.74%	―	―
4736	66 Neutral	¥3.36B	9.29	―	1.54%	7.59%	16.93%
4068	66 Neutral	¥3.30B	33.58	―	―	9.33%	133.75%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4450	61 Neutral	¥6.78B	14.80	―	1.13%	22.22%	28.14%
4416	57 Neutral	¥3.54B	80.36	―	―	5.05%	-50.80%