Nippon RAD Inc. (4736) AI Stock Analysis

• Market Cap: ¥3.37B
• Dividend Yield: 1.54%
• Average Volume (3M): 11.22K
• Price to Earnings (P/E): 9.3
• Beta (1Y): 0.98
• Revenue Growth: 7.59%
• EPS Growth: 16.93%
• Country: JP
• Employees: 270
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 5.02
• 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: ¥685.00 ▲(6.04% Upside)
• Action: Reiterated Date: 02/05/26
• Date: Action: Reiterated 02/05/26

The score is supported primarily by strong financial resilience (very low leverage) and improved profitability, plus attractive valuation (low P/E). These positives are tempered by weak/volatile cash conversion and a clearly negative technical backdrop with the price below key moving averages and negative MACD.

Positive Factors

Conservative balance sheet

Extremely low leverage and a conservative capital structure provide durable financial resilience. This reduces refinancing and interest-rate risk, preserves strategic optionality for investments or M&A, and supports operations through downturns without relying on external debt.

Improved profitability and healthy ROE

Margins rising from prior losses to mid-single-digit-plus levels and ROE around 10–12% indicate durable operational improvement and capital efficiency. Sustained profitability enhances internal funding, supports reinvestment, and signals the business can generate returns on existing assets.

Diversified IT services model

A service mix spanning business applications and embedded/system software diversifies revenue sources and client exposures. This structural breadth supports cross-selling, steady project pipelines, and exposure to long-term digitalization trends, reducing dependence on any single end market.

Negative Factors

Weak and volatile cash conversion

Low OCF-to-net-income coverage and only partial FCF conversion reflect working-capital swings and inconsistent billing/collections. This reduces financial flexibility, constrains sustainable reinvestment or payout, and raises vulnerability to project timing shocks or client payment delays.

Recent top-line softness

A declining TTM revenue trend after prior modest growth suggests demand or execution headwinds. Persistent top-line softness limits operating leverage benefits, puts pressure on margin expansion, and forces management to prioritize sales or market diversification to restore scalable growth.

Historical profitability and cash volatility

Prior negative returns and episodic profitability imply the business has cyclical or execution risk. Such volatility complicates forecasting and long-term planning, making consistent capital allocation, hiring, and strategic investments harder without clearer stabilization of earnings and cash flow.

Nippon RAD Inc. Business Overview & Revenue Model

Company Description

Nippon RAD Inc. engages in enterprise solution and IoT integration businesses in Japan. It provides package software; housing, hosting, and rental servers; application service through the Internet; and cloud services, as well as develops business application systems for a range of IT applications, consulting, and system engineers and programmers. The company also engages in the system design, manufacture, introduction, and after-sales services, such as outpatient reception terminals; design, manufacture, installation, and after-sales service of information terminals for emergency vehicles; and design and development of carrier switches for network equipment, and safety control systems for automobiles and ships. In addition, it offers IoT platform services; and video equipment system Nippon RAD Inc. was founded in 1971 and is headquartered in Tokyo, Japan.

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

Earnings profitability has improved materially (TTM net margin ~8.4%, EBIT margin ~8.2%) and the balance sheet is very conservative with minimal leverage and healthy recent ROE (~10–12%). Offsetting this, cash-flow quality is weak/volatile (low OCF-to-net-income coverage ~0.19; FCF ~40% of net income) and revenue is slightly down TTM (-2.1%).

Income Statement

Profitability has improved meaningfully versus earlier years, with net margins rising from losses in 2021 to ~8–10% in 2024–2025. TTM (Trailing-Twelve-Months) profitability remains solid (net margin ~8.4%, EBIT margin ~8.2%), but growth has softened: revenue is slightly down in TTM (Trailing-Twelve-Months) (-2.1%) after modest growth in the last two annual periods. Overall: good margin profile and earnings power, but near-term top-line momentum is a clear watch item.

Balance Sheet

The balance sheet is very conservatively positioned with extremely low leverage (debt-to-equity near zero in the latest annual and still minimal in TTM (Trailing-Twelve-Months)). Equity is sizable relative to assets, and returns on equity are healthy (roughly 10–12% in 2024–TTM (Trailing-Twelve-Months)), reflecting improved profitability without relying on debt. The main drawback is not leverage but consistency—returns were weak/negative earlier in the period, indicating the business has historically been more volatile.

Cash Flow

Cash generation is mixed. TTM (Trailing-Twelve-Months) shows positive operating cash flow and free cash flow, and free cash flow improved sharply versus the prior year, but conversion is still modest: operating cash flow is low relative to net income (TTM (Trailing-Twelve-Months) coverage ~0.19) and free cash flow is only ~40% of net income. Annual results have also been uneven, including negative free cash flow in 2025 and very weak operating cash flow in 2023, suggesting working-capital swings and less predictable cash conversion.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	4.31B	4.36B	3.98B	3.56B	3.31B	3.01B
Gross Profit	980.57M	1.10B	938.61M	701.69M	611.22M	425.04M
EBITDA	439.54M	456.84M	373.73M	206.04M	85.37M	-130.51M
Net Income	360.98M	417.17M	327.92M	140.68M	19.11M	-178.02M
Balance Sheet
Total Assets	4.84B	4.94B	4.30B	4.11B	4.03B	4.04B
Cash, Cash Equivalents and Short-Term Investments	1.98B	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	1.37B	1.55B	1.37B	1.49B	1.49B	1.50B
Stockholders Equity	3.47B	3.39B	2.93B	2.62B	2.54B	2.53B
Cash Flow
Free Cash Flow	48.00M	-56.63M	316.20M	-47.01M	160.63M	-57.06M
Operating Cash Flow	119.48M	139.30M	375.68M	1.99M	194.13M	26.27M
Investing Cash Flow	-308.80M	-183.49M	-436.82M	-3.41M	-292.52M	-54.88M
Financing Cash Flow	-54.44M	-26.01M	-172.72M	-186.21M	-146.90M	-145.48M

Nippon RAD Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• 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 Neutral. The current price of 646 is above the 20-day moving average (MA) of 630.30, above the 50-day MA of 638.08, and below the 200-day MA of 706.74, indicating a neutral trend. The MACD of -2.88 indicates Negative momentum. The RSI at 51.89 is Neutral, neither overbought nor oversold. The STOCH value of 62.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4736.

Nippon RAD Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4421	79 Outperform	¥2.85B	12.01	―	2.86%	5.74%	5.97%
3839	76 Outperform	¥5.25B	27.15	―	1.61%	7.03%	1.01%
4736	66 Neutral	¥3.37B	9.33	―	1.54%	7.59%	16.93%
4068	66 Neutral	¥3.39B	28.77	―	―	9.33%	133.75%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4198	60 Neutral	¥3.73B	737.15	―	4.95%	-5.92%	-78.33%
4416	57 Neutral	¥2.56B	52.49	―	―	5.05%	-50.80%