Nikkato Corporation (5367) AI Stock Analysis

• Market Cap: ¥9.46B
• Dividend Yield: 3.42%
• Average Volume (3M): 10.49K
• Price to Earnings (P/E): 9.4
• Beta (1Y): 0.56
• Revenue Growth: 3.23%
• EPS Growth: -9.88%
• Country: JP
• Employees: 259
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 16.69
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: ¥894.00 ▲(41.90% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven primarily by strong financial health (high equity, low debt, and strong cash flow generation) and a reasonable valuation with a supportive dividend. Offsetting this, technical indicators show an extended rally with overbought signals (RSI/Stoch), which raises near-term downside risk despite a clear uptrend.

Positive Factors

Conservative Balance Sheet

A very high equity ratio and minimal leverage give Nikkato durable financial flexibility. Low debt reduces refinancing and interest rate risk, enabling steady capex, dividend payments, and resilience through industrial cycles without pressuring cash flows.

Strong Cash Generation

Robust operating cash conversion and a large year-over-year free cash flow increase support self-funded investment and shareholder returns. Reliable cash generation underpins long-term operations and reduces dependence on external financing.

Healthy Operational Margins

Sustained gross and EBITDA margins indicate durable pricing power and manufacturing efficiency in industrial ceramics. These margins provide a buffer for investment and cyclical downturns, supporting medium-term profitability and service of strategic customers.

Negative Factors

Low Return on Equity

ROE near 4% suggests the company is not strongly converting its sizable equity base into returns. Over the medium term this can signal underutilized capital and slower shareholder value creation unless management increases asset productivity or profit margins materially.

Revenue Contraction

A decline in top-line sales points to potential demand weakness or lost share in industrial ceramic markets. If this trend persists, it could limit operating leverage, capex affordability, and margin expansion despite strong cash generation and a healthy balance sheet.

Earnings Pressure

Negative EPS growth indicates recent profitability headwinds, which may reflect pricing, cost, or volume pressures. Continued declines in earnings reduce retained earnings and could constrain reinvestment or dividend growth over the medium term.

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

Strong overall fundamentals: solid profitability (gross margin 20.07%, EBITDA margin 13.70%), very conservative leverage (equity ratio 76.60%, debt-to-equity 0.055), and strong cash generation (operating cash flow to net income 3.33; free cash flow growth 101.97%). The main drag is slightly negative revenue growth (-1.59%) and modest ROE (3.84%).

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	10.13B	10.08B	10.24B	10.73B	9.98B	8.65B
Gross Profit	2.32B	1.97B	2.27B	2.53B	2.29B	1.57B
EBITDA	1.48B	1.29B	1.53B	1.73B	1.66B	1.09B
Net Income	676.61M	503.57M	701.91M	835.36M	671.88M	274.57M
Balance Sheet
Total Assets	16.80B	17.28B	17.32B	17.05B	16.68B	16.13B
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	4.17B	4.25B	4.66B	4.90B	4.70B
Stockholders Equity	12.65B	13.11B	13.07B	12.39B	11.79B	11.43B
Cash Flow
Free Cash Flow	0.00	780.91M	392.35M	676.35M	1.11B	455.12M
Operating Cash Flow	0.00	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: 630.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 630 is below the 20-day moving average (MA) of 800.40, below the 50-day MA of 732.96, and above the 200-day MA of 597.89, indicating a neutral trend. The MACD of 7.86 indicates Positive momentum. The RSI at 53.79 is Neutral, neither overbought nor oversold. The STOCH value of 64.02 is Neutral, 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
6517	78 Outperform	¥74.60B	9.50	―	2.63%	-6.00%	-13.74%
6381	75 Outperform	¥66.86B	13.24	―	3.95%	-1.67%	-4.39%
5367	73 Outperform	¥9.46B	9.44	―	3.42%	3.23%	-9.88%
6376	70 Outperform	¥147.93B	4.15	8.17%	2.04%	1.48%	58.59%
6363	70 Outperform	¥71.38B	4.09	―	3.09%	6.35%	-34.20%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6393	60 Neutral	¥13.07B	10.99	―	6.70%	7.96%	43.37%