Nikkato Corporation (5367) AI Stock Analysis

• Market Cap: ¥7.23B
• Dividend Yield: 3.42%
• Average Volume (3M): 10.49K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 0.40
• Revenue Growth: 3.23%
• EPS Growth: -9.88%
• Country: JP
• Employees: 259
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 18.53
• Shares Outstanding: 12,135,695
• 10 Day Avg. Volume: 10,840
• 30 Day Avg. Volume: 10,493
• PEG Ratio: -0.42
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 0.60
• P/FCF Ratio: 7.69
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: ¥694.00 ▲(13.77% Upside)

Nikkato Corporation's strong financial performance and reasonable valuation are the primary drivers of its stock score. The company's solid profitability, conservative leverage, and strong cash flow generation underpin its financial health. While technical indicators show strong momentum, overbought conditions suggest caution. The attractive dividend yield further supports the stock's valuation.

Positive Factors

Strong Cash Flow Generation

Nikkato's robust cash flow generation indicates efficient operations and financial stability, providing flexibility for investments and debt management.

Conservative Leverage

Low leverage enhances financial resilience, reducing risk and interest obligations, which supports long-term strategic initiatives and growth.

High Equity Ratio

A high equity ratio reflects a strong capital base, providing a cushion against market volatility and enabling sustained investment in growth opportunities.

Negative Factors

Revenue Contraction

Declining revenue may indicate challenges in market demand or competition, potentially impacting future profitability and growth if not addressed.

Decline in EPS Growth

A significant drop in EPS growth suggests potential operational inefficiencies or market challenges, which could affect investor confidence and valuation.

Low Return on Equity

Low ROE indicates limited efficiency in generating returns on shareholders' equity, which may hinder attractiveness to investors seeking growth.

Nikkato Corporation Business Overview & Revenue Model

Company Description

Nikkato Corporation manufactures and sells industrial ceramics consumables in Japan. The company operates through Ceramics Business and Engineering Business segments. The Ceramics Business segment manufactures and sells ceramic tools, fixtures, and machine parts used in the production processes of manufacturers of electronic components, foods, chemicals, paints, and other products. The Engineering Business segment purchases and sells heating and measuring control equipment. In addition, it offers wear and heat resistant, heating device, temperature sensor, functional, and special refractory ceramics, as well as porcelain and electric furnaces. The company was founded in 1913 and is headquartered in Sakai, Japan.

How the Company Makes Money

Nikkato Corporation generates revenue through multiple streams, primarily by selling its specialized products to various sectors such as electronics, automotive, and construction. The company's revenue model is built on direct sales to manufacturers and distributors, with a focus on high-margin products that leverage advanced technology. Key revenue streams include the sale of specialty coatings and chemicals, which are essential for manufacturing processes across various industries. Additionally, Nikkato has established strategic partnerships with leading technology firms, enabling access to larger markets and enhancing its product offerings. Factors contributing to its earnings include the growing demand for innovative materials, investments in research and development for new product lines, and efficient supply chain management that minimizes costs.

Nikkato Corporation Financial Statement Overview

Summary

Nikkato Corporation demonstrates strong financial health with solid profitability, conservative leverage, and strong cash flow generation. Despite a recent revenue contraction, the company's margins remain healthy. The balance sheet reflects a robust equity position and low leverage, while cash flow metrics show strong operational performance.

Income Statement

Nikkato Corporation shows a stable performance with a gross profit margin of 20.07% and a net profit margin of 4.99% for the most recent year. The company experienced a decline in revenue over the last year, with a revenue growth rate of -1.59%. EBIT and EBITDA margins are relatively healthy at 6.33% and 13.70%, respectively. The overall profitability is solid, although recent revenue contraction may pose a risk if the trend continues.

Balance Sheet

The balance sheet reflects a robust equity position with an equity ratio of 76.60%. The debt-to-equity ratio is low at 0.055, indicating conservative leverage. Return on equity stands at 3.84%, showing room for improvement in generating returns on shareholders' equity. The overall financial health is strong, with a solid equity base and manageable debt levels.

Cash Flow

Operating cash flow to net income ratio is strong at 3.33, indicating good cash generation from operations relative to net income. The free cash flow to net income ratio is 1.55, showing adequate free cash flow generation. The free cash flow growth rate is 101.97%, highlighting a significant improvement in cash flow generation. Overall, the cash flow statement indicates strong operational cash flow and improved free cash flow generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.13B	10.08B	10.24B	10.73B	9.98B	8.65B
Gross Profit	2.32B	2.02B	2.32B	2.59B	2.33B	1.63B
EBITDA	1.56B	1.38B	1.60B	1.81B	1.70B	1.17B
Net Income	676.61M	503.57M	701.91M	835.36M	671.88M	274.57M
Balance Sheet
Total Assets	16.80B	17.12B	17.19B	16.89B	16.53B	15.93B
Cash, Cash Equivalents and Short-Term Investments	3.38B	3.64B	3.38B	3.51B	3.36B	2.68B
Total Debt	988.83M	724.35M	935.92M	1.16B	1.42B	1.66B
Total Liabilities	4.15B	4.01B	4.12B	4.50B	4.75B	4.50B
Stockholders Equity	12.65B	13.11B	13.07B	12.39B	11.79B	11.43B
Cash Flow
Free Cash Flow	1.22B	780.91M	386.58M	663.06M	1.02B	373.10M
Operating Cash Flow	1.22B	1.68B	785.12M	938.74M	1.64B	1.35B
Investing Cash Flow	0.00	-925.64M	-398.90M	-267.22M	-561.30M	-773.57M
Financing Cash Flow	0.00	-493.09M	-509.93M	-521.09M	-396.86M	-315.38M

Nikkato Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 610.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5367, the sentiment is Positive. The current price of 610 is above the 20-day moving average (MA) of 598.10, above the 50-day MA of 586.46, and above the 200-day MA of 534.90, indicating a bullish trend. The MACD of 5.09 indicates Negative momentum. The RSI at 59.67 is Neutral, neither overbought nor oversold. The STOCH value of 81.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5367.

Nikkato Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5367	74 Outperform	¥7.23B	12.88	―	3.42%	3.23%	-9.88%
5368	71 Outperform	¥9.19B	9.76	―	3.51%	14.57%	14.12%
6494	71 Outperform	¥7.31B	45.20	―	―	9.59%	54.63%
6486	69 Neutral	¥140.20B	18.67	―	3.88%	1.70%	18.50%
6490	67 Neutral	¥115.86B	13.47	―	2.50%	-2.46%	-10.72%
6492	65 Neutral	¥13.93B	13.32	―	0.72%	6.51%	3.68%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%