Nippon RAD Inc. (4736) AI Stock Analysis

• Market Cap: ¥3.32B
• Dividend Yield: 1.54%
• Average Volume (3M): 11.22K
• Price to Earnings (P/E): 9.2
• Beta (1Y): 1.03
• 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. shows strong revenue growth and profitability with a healthy balance sheet, indicating financial stability. However, the decline in free cash flow is a concern that needs addressing to ensure long-term financial health.

Income Statement

Nippon RAD Inc. has demonstrated strong revenue growth with a TTM increase of 99.5%, indicating robust demand for its services. The gross profit margin is healthy at 24.38%, and the net profit margin has improved to 8.85%, reflecting efficient cost management. EBIT and EBITDA margins are also solid, showcasing operational efficiency. However, there is a slight decline in margins compared to the previous annual report, which could be a point of concern if it continues.

Balance Sheet

The company maintains an excellent balance sheet with a very low debt-to-equity ratio of 0.03%, indicating minimal leverage and financial risk. The return on equity is strong at 11.86%, suggesting effective use of shareholder funds. The equity ratio is high, reflecting a stable financial structure with significant equity backing. Overall, the balance sheet is a strong point for Nippon RAD Inc.

Cash Flow

Cash flow analysis reveals mixed results. While operating cash flow is positive, the free cash flow has seen a significant decline, with a growth rate of -93.9% in the TTM period. The operating cash flow to net income ratio is moderate, indicating reasonable cash conversion. However, the free cash flow to net income ratio suggests potential challenges in generating free cash flow relative to net income. This could impact future investments and financial flexibility.

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: Positive
• 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 below the 20-day moving average (MA) of 647.75, below the 50-day MA of 654.08, and below the 200-day MA of 713.30, indicating a bearish trend. The MACD of -2.39 indicates Positive momentum. The RSI at 36.36 is Neutral, neither overbought nor oversold. The STOCH value of 23.26 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	¥4.80B	19.42	―	2.99%	1.14%	23.89%
4736	66 Neutral	¥3.32B	9.18	―	1.54%	7.59%	16.93%
4068	66 Neutral	¥3.34B	34.04	―	―	9.33%	133.75%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4450	61 Neutral	¥7.21B	15.59	―	1.13%	22.22%	28.14%
5250	60 Neutral	¥3.77B	34.62	―	1.74%	―	―
4416	57 Neutral	¥3.28B	74.44	―	―	5.05%	-50.80%