Canare Electric Co., Ltd. (5819) AI Stock Analysis

• Market Cap: ¥12.70B
• Dividend Yield: 3.02%
• Average Volume (3M): 11.15K
• Price to Earnings (P/E): 10.6
• Beta (1Y): 0.50
• Revenue Growth: 3.43%
• EPS Growth: 3.75%
• Country: JP
• Employees: 260
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 32.21
• Shares Outstanding: 7,028,060
• 10 Day Avg. Volume: 9,670
• 30 Day Avg. Volume: 11,153
• PEG Ratio: 0.70
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.97
• P/FCF Ratio: 7.33
• 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: 75 Outperform
• Price Target: ¥2,284.00 ▲(21.10% Upside)
• Action: Reiterated Date: 02/01/26
• Date: Action: Reiterated 02/01/26

The score is driven primarily by strong financial quality (debt-free balance sheet, improving margins, and improving recent free cash flow) and supportive valuation (low P/E and solid dividend yield). Offsetting these positives, technical signals are neutral-to-soft in the near term with the stock trading below key short- and mid-term moving averages.

Positive Factors

Debt-free balance sheet

Zero reported debt materially lowers financial risk and preserves strategic optionality. With rising equity and assets, the company can fund capex, dividends, or targeted acquisitions from internal resources, improving resilience across industry cycles and reducing refinancing vulnerability.

Improving profit margins

Stable gross margins (~40–42%) combined with rising EBIT and net margins point to durable cost control or better product mix. For a manufacturer of professional cables/connectivity, sustained margins signal pricing power in specialty products and underpin long-term cash generation and reinvestment capacity.

Improving free cash flow

Free cash flow aligning with net income in 2025 indicates higher earnings quality and better cash conversion. Consistent positive FCF supports durable shareholder returns, funds operations or targeted investments internally, and complements the conservative balance sheet for long-term stability.

Negative Factors

Uneven revenue growth

A pronounced revenue dip in 2024 followed by a sharp rebound in 2025 reduces visibility into sustainable top-line momentum. Reliance on episodic large sales or project timing in broadcast/pro A/V channels can make forecasting and capacity planning harder and may compress long-term growth predictability.

Historical cash-flow variability

Past swings in operating cash relative to earnings, including a negative FCF year in 2022, indicate working-capital or investment timing risks. That volatility can constrain the company's ability to reliably fund dividends, capex, or opportunistic investments despite recent improvement.

Moderate returns on equity

Mid-single-digit ROE suggests the firm is conservative but not highly efficient at converting equity into profits. This limits long-term shareholder return potential versus firms that better monetize capital, and may imply slower value creation despite balance-sheet strength.

Canare Electric Co., Ltd. Business Overview & Revenue Model

Company Description

Canare Electric Co., Ltd. develops, manufactures, and sells audio and video cables, connectors, patchbays, assemblies, converters and related products, and fiber-optic products in Japan and internationally. The company also offers video jacks, crimp plugs, receptacles and adapters, and coaxial cable strippers. It serves television broadcasting, and professional audio and video industries. The company was founded in 1970 and is headquartered in Yokohama, Japan.

How the Company Makes Money

Canare Electric Co., Ltd. generates revenue primarily through the design, production, and sale of a comprehensive range of audio and video cables and connectors. Its core revenue streams include sales of bulk cables, assemblies, and accessories for professional audio and video applications. Additionally, the company benefits from long-standing relationships and partnerships with broadcasters, integrators, and distributors worldwide, which help ensure a steady demand for its products. Canare Electric's commitment to quality and innovation also allows it to maintain a competitive edge in the market, contributing to its financial performance.

Canare Electric Co., Ltd. Financial Statement Overview

Summary

Strong overall fundamentals: solid and improving profitability (higher EBIT and net margins into 2025), an exceptionally conservative debt-free balance sheet, and generally positive free cash flow with improved cash conversion in 2024–2025. Key watchouts are uneven revenue growth (notably the sharp 2025 jump after a 2024 dip) and historical cash-flow variability.

Income Statement

Profitability is solid and improving: gross margin has been stable around ~40–42% and operating profitability strengthened into 2025 (EBIT margin ~12.5% vs ~11.2% in 2024), with net margin rising to ~9.2%. Revenue has generally trended upward since 2021, but growth has been uneven (a small decline in 2024 followed by a very large jump in 2025), which adds some uncertainty around sustainability of the latest growth rate.

Balance Sheet

The balance sheet is very conservative with zero debt across all reported years, which materially reduces financial risk. Equity and total assets have steadily increased over time, indicating balance-sheet expansion and retained earnings build. Return on equity is positive and improved versus earlier years, but remains moderate (mid-single digits), suggesting the company is strong on safety/stability but not maximizing returns.

Cash Flow

Cash generation is healthy overall, with free cash flow positive in most years and improving in 2024–2025; in 2025 free cash flow was roughly in line with net income (~99%), supporting earnings quality. However, cash conversion has been somewhat inconsistent historically (operating cash flow was well below net income in 2021–2023), and free cash flow turned negative in 2022, pointing to periodic working-capital or investment-driven volatility.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.81B	13.11B	12.38B	12.87B	11.17B	10.03B
Gross Profit	5.50B	5.56B	5.09B	5.29B	4.33B	3.85B
EBITDA	1.87B	1.81B	1.62B	1.91B	1.38B	1.15B
Net Income	1.18B	1.20B	1.04B	1.19B	868.94M	681.43M
Balance Sheet
Total Assets	19.88B	21.08B	19.63B	18.91B	17.73B	16.27B
Cash, Cash Equivalents and Short-Term Investments	9.04B	9.27B	11.48B	10.27B	9.71B	9.78B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	1.56B	2.03B	1.66B	1.89B	2.04B	1.56B
Stockholders Equity	18.32B	19.05B	17.97B	17.02B	15.69B	14.72B
Cash Flow
Free Cash Flow	1.66B	1.74B	1.33B	724.32M	-93.84M	461.46M
Operating Cash Flow	1.74B	1.76B	1.46B	808.79M	835.63M	515.54M
Investing Cash Flow	-2.12B	-3.61B	317.46M	-561.06M	-913.71M	-119.97M
Financing Cash Flow	-468.00M	-464.07M	-543.52M	-369.04M	-290.13M	-214.35M

Canare Electric Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1886.00
• 50DMA: Negative
• 100DMA: Negative
• 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:5819, the sentiment is Negative. The current price of 1886 is below the 20-day moving average (MA) of 2000.35, below the 50-day MA of 1933.14, and above the 200-day MA of 1776.14, indicating a neutral trend. The MACD of -5.07 indicates Positive momentum. The RSI at 41.89 is Neutral, neither overbought nor oversold. The STOCH value of 34.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5819.

Canare Electric Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5805	78 Outperform	¥394.47B	14.04	18.90%	1.64%	7.08%	65.71%
5819	75 Outperform	¥12.70B	10.63	―	3.02%	3.43%	3.75%
6804	72 Outperform	¥139.49B	3.86	8.07%	2.64%	79.29%	35.48%
5803	72 Outperform	¥6.98T	26.86	32.32%	0.91%	27.53%	137.34%
7480	70 Outperform	¥22.27B	13.77	―	6.06%	-1.22%	-7.71%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5801	61 Neutral	¥2.07T	7.80	10.06%	1.21%	10.52%	60.75%