Otsuka (4768) AI Stock Analysis

• Market Cap: $1.11T
• Dividend Yield: 2.58%
• Average Volume (3M): 1.23M
• Price to Earnings (P/E): 19.7
• Beta (1Y): 0.50
• Revenue Growth: 15.49%
• EPS Growth: 18.42%
• Country: JP
• Employees: 9,680
• Sector: Technology
• Sector Strength: 83
• Industry: Technology Distributors
• EPS (TTM): 38.22
• Shares Outstanding: 380,004,240
• 10 Day Avg. Volume: 1,094,140
• 30 Day Avg. Volume: 1,227,410
• PEG Ratio: 3.74
• Price to Book (P/B): 3.10
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 86.93
• 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: $2,733.54
• Price Target Upside: -6.75% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 71 Outperform
• Price Target: ¥3,232.00 ▲(10.25%Upside)

Otsuka demonstrates a strong financial performance with solid revenue growth and a well-managed balance sheet, which is the primary factor driving the score. However, the bearish technical indicators and moderate valuation suggest caution. The absence of earnings call insights or corporate events leaves room for uncertainty in forward guidance.

Otsuka Business Overview & Revenue Model

Company Description

Otsuka Corporation provides system integration, support, and other services in Japan. The System Integration Business segment offers system services, including consulting, system design and development, transport and installation work, and network construction. It also provides management systems and collaborative software, such as ERP packages and groupware to cover a range of specialized fields, including CAD and web technologies; and software, hardware, intranet, and security products for the construction and expansion of computer networks. In addition, this segment sells computers, copiers, and communications equipment and software; and develops consigned software. The Service and Support Business segment offers supplies, hardware and software maintenance, telephone support, and outsourcing services; emergency computer rescue services for corporate and individual clients; and network support and services for the planning, design, construction, and operation of corporate information systems, as well as out-sources system engineers. It also provides educational support services. The company was founded in 1961 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Otsuka makes money through multiple revenue streams primarily derived from its pharmaceuticals and nutraceuticals divisions. In the pharmaceuticals sector, the company generates revenue by developing and selling prescription medications, with a strong emphasis on central nervous system disorders and oncology. Key products include antipsychotic medications and cancer treatments. The nutraceuticals division contributes to the company's earnings by offering health and wellness products, such as electrolyte drinks and nutritional supplements, directly to consumers. Otsuka also benefits from strategic partnerships and collaborations with other pharmaceutical companies and research institutions, expanding its market reach and leveraging shared resources for product development. The company invests significantly in research and development to maintain a robust pipeline of new products, ensuring long-term revenue growth.

Otsuka Financial Statement Overview

Summary

Otsuka's financial health is robust, characterized by strong revenue growth and profitability, a solid balance sheet with low leverage, and consistent cash flow generation. The company is well-positioned in the Technology Distributors industry, with effective cost management and a strong equity position. However, attention should be paid to the increasing liabilities to ensure long-term stability.

Income Statement

Otsuka exhibits strong revenue growth with a 13.3% increase from 2023 to 2024, driven by consistent gross profit margins around 20%. The net profit margin improved to 4.8% in 2024 from 4.9% in 2023, indicating strong control over costs and expenses. The EBIT and EBITDA margins remain robust at 6.7% and 7.5% respectively, reflecting operational efficiency.

Balance Sheet

The balance sheet is solid with a low debt-to-equity ratio of 0.02, indicating minimal leverage. The return on equity is commendable at 14.4%, demonstrating effective use of equity capital. The equity ratio stands at 55.0%, showing a strong equity base. However, the growth in total liabilities suggests potential risk if not managed properly.

Cash Flow

Cash flow performance is stable with an operating cash flow to net income ratio of 0.71, indicating strong cash generation relative to profits. Free cash flow decreased but remains positive, ensuring liquidity. The free cash flow to net income ratio is 0.65, showcasing healthy cash conversion.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.16T	1.11T	977.37B	861.02B	851.89B	836.32B
	Gross Profit
230.98B	224.47B	203.98B	184.17B	176.89B	173.72B
	EBIT
78.29B	74.36B	62.96B	54.77B	55.83B	56.31B
	EBITDA
88.15B	82.65B	72.86B	63.06B	63.81B	63.92B
	Net Income Common Stockholders
56.29B	53.48B	47.45B	40.02B	39.93B	39.31B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
199.54B	228.14B	228.69B	202.29B	204.70B	178.07B
	Total Assets
685.99B	673.90B	561.80B	523.02B	486.25B	471.29B
	Total Debt
6.00B	6.86B	7.30B	7.51B	7.99B	8.02B
	Net Debt
-193.54B	-221.28B	-221.39B	-194.78B	-196.72B	-170.05B
	Total Liabilities
325.29B	298.66B	214.85B	200.29B	184.48B	191.26B
	Stockholders Equity
356.34B	370.80B	343.11B	319.39B	298.74B	277.35B
Cash Flow		Free Cash Flow
12.71B	34.49B	61.30B	22.12B	46.99B	23.63B
	Operating Cash Flow
17.99B	37.71B	71.65B	29.20B	57.87B	32.50B
	Investing Cash Flow
-14.16B	-11.95B	-21.47B	-8.36B	-9.16B	-8.72B
	Financing Cash Flow
-30.66B	-25.89B	-23.84B	-23.31B	-21.96B	-20.99B

Otsuka Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2931.50
• 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:4768, the sentiment is Negative. The current price of 2931.5 is below the 20-day moving average (MA) of 2933.58, below the 50-day MA of 3027.92, and below the 200-day MA of 3352.90, indicating a bearish trend. The MACD of -25.24 indicates Negative momentum. The RSI at 43.78 is Neutral, neither overbought nor oversold. The STOCH value of 44.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4768.

Otsuka Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4768	71 Outperform	$1.11T	19.75	16.17%	2.58%	15.49%	18.42%
Sector *	62 Neutral	$11.80B	10.37	-7.29%	2.91%	7.39%	-7.96%
9V2		€886.47M	8.00	10.70%	4.27%	―	―
6638	80 Outperform	¥54.98B	8.74		2.31%	11.02%	65.66%
3107	80 Outperform	¥235.10B	9.11		3.64%	17.47%	492.18%
9824	76 Outperform	¥69.27B	10.13		3.33%	7.56%	12.07%
7513	74 Outperform	¥81.44B	16.75		1.51%	6.46%	67.90%

Otsuka Corporate Events

Otsuka Corporation Reports Strong Q1 2025 Financial Results

Otsuka Corporation reported strong financial results for the first quarter of 2025, with a notable increase in net sales and profits compared to the previous year. The company’s performance reflects its robust market positioning and strategic initiatives, which have positively impacted its financial health and stakeholder confidence.