Ryobi (5851) AI Stock Analysis

• Market Cap: ¥92.36B
• Dividend Yield: 3.36%
• Average Volume (3M): 325.32K
• Price to Earnings (P/E): 8.7
• Beta (1Y): 1.07
• Revenue Growth: 3.80%
• EPS Growth: -15.46%
• Country: JP
• Employees: 7,939
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 167.69
• Shares Outstanding: 31,809,471
• 10 Day Avg. Volume: 121,360
• 30 Day Avg. Volume: 325,316
• PEG Ratio: 0.13
• Price to Book (P/B): 0.49
• Price to Sales (P/S): 0.29
• P/FCF Ratio: -13.25
• 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): 290.4
• Revenue Forecast (FY): ¥323.00B

• Rating: 72 Outperform
• Price Target: ¥3,373.00 ▲(24.14% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by improving fundamentals but materially constrained by weak and volatile 2025 cash generation (negative free cash flow). Technicals are supportive with a strong uptrend, and valuation is favorable due to the low P/E and solid dividend yield.

Positive Factors

Steady revenue growth

Revenue recovered after the 2020 decline and grew ~5.5% YoY in 2025, reflecting steady demand across branded and OEM channels. Durable top-line growth across 2022–2025 indicates diversified revenue streams and a broader market recovery that supports longer-term cash generation potential.

Improving profitability and returns

Profitability moved from loss-making in 2020–2021 to positive margins and improving returns (ROE ~6.2% in 2025). This structural improvement signals better cost control and operational stability versus prior years, increasing the likelihood of sustainable earnings and stronger internal capital generation over time.

Moderate leverage with equity growth

Leverage is moderate at ~0.42 debt-to-equity and equity has grown consistently, providing a healthier capital base than during 2020–2022. This structural balance-sheet improvement supports access to financing, absorbs cyclical shocks better, and underpins capacity for strategic investment or product development.

Negative Factors

Weak cash generation

Operating cash flow declined sharply in 2025 and free cash flow turned negative despite reported net income, signaling weaker cash conversion. Persistent FCF volatility undermines the company's ability to fund capex, dividends, or debt service internally, increasing reliance on external financing and reducing financial resilience.

Thin and pressured margins

Margins remain relatively thin for a manufacturer and EBIT fell from 2023 levels, suggesting cost pressure or adverse pricing/mix. Limited margin headroom makes earnings and cash flow vulnerable to rising input costs or weaker end-market pricing, constraining the firm's ability to build durable profitability buffers.

2025 step-up in debt

Total debt increased in 2025 compared with 2024, reducing balance-sheet flexibility just as cash generation weakened. Higher absolute leverage combined with volatile FCF raises refinancing and interest-rate exposure, limiting capacity to invest or absorb shocks without resorting to equity issuance or higher-cost borrowing.

Ryobi Business Overview & Revenue Model

Company Description

Ryobi (5851) is a prominent manufacturer of power tools, outdoor products, and accessories, primarily catering to both professional contractors and DIY enthusiasts. The company operates in the consumer goods sector, focusing on the development and distribution of high-quality, innovative tools that enhance efficiency and productivity. Ryobi's core product offerings include drills, saws, lawn care equipment, and various tool batteries and chargers, which are designed to meet the diverse needs of its customers.

How the Company Makes Money

Ryobi generates revenue through the sale of its power tools and outdoor products, which are distributed through various retail channels, including home improvement stores, specialty tool retailers, and online platforms. Key revenue streams include direct sales of tools and accessories, as well as ongoing sales of replacement parts and batteries. The company also benefits from strategic partnerships with major retailers and distributors, enhancing its market reach and visibility. Additionally, Ryobi's focus on innovation and product development allows it to capture market share and drive customer loyalty, contributing to its overall earnings.

Ryobi Financial Statement Overview

Summary

Earnings and revenue have recovered with steady top-line growth and improved profitability versus 2020–2021, and leverage remains moderate. However, cash flow is a major drag: 2025 operating cash flow fell sharply and free cash flow turned negative, reducing confidence in earnings quality and financial flexibility.

Income Statement

Revenue has grown steadily from 2022–2025, with 2025 revenue up ~5.5% YoY, showing continued demand recovery after the 2020 decline. Profitability has improved meaningfully versus the loss-making 2020–2021 period: 2025 net margin is ~3.6% and EBIT margin is ~4.1%, while gross margin has also expanded versus earlier years. Offsetting this, margins remain relatively thin for a manufacturer and EBIT margin dipped from 2023 levels, suggesting cost pressure or pricing/mix headwinds despite higher earnings.

Balance Sheet

Leverage looks moderate with 2025 debt-to-equity around 0.42, improved from the higher levels seen in 2020–2022, and equity has grown consistently over the period. Returns are positive and improving versus earlier years (2025 return on equity ~6.2%), indicating healthier profitability and balance-sheet quality than during 2020–2021. The key weakness is a 2025 step-up in total debt versus 2024, which reduces flexibility if cash generation remains volatile.

Cash Flow

Cash generation is the weakest area: 2025 operating cash flow fell sharply versus 2024, and free cash flow turned negative in 2025 after being strongly positive in 2023–2024. Free cash flow also did not support earnings in 2025 (free cash flow was negative versus positive net income), pointing to heavier investment, working-capital drag, or less efficient cash conversion. While operating cash flow remains positive across the period, the year-to-year volatility raises reliability concerns.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	309.11B	293.31B	282.69B	249.52B	198.07B
Gross Profit	38.85B	34.26B	34.49B	28.25B	18.47B
EBITDA	32.33B	33.10B	33.13B	26.31B	13.80B
Net Income	11.18B	6.93B	10.12B	4.78B	-4.40B
Balance Sheet
Total Assets	343.73B	333.19B	318.84B	300.29B	279.42B
Cash, Cash Equivalents and Short-Term Investments	31.80B	29.92B	28.29B	27.99B	29.28B
Total Debt	74.74B	61.96B	70.19B	74.36B	73.77B
Total Liabilities	154.18B	156.21B	158.12B	156.56B	147.71B
Stockholders Equity	179.47B	167.35B	151.30B	134.46B	122.92B
Cash Flow
Free Cash Flow	-6.68B	15.09B	9.68B	-92.00M	3.05B
Operating Cash Flow	13.89B	29.16B	26.00B	16.79B	14.90B
Investing Cash Flow	-22.53B	-13.72B	-17.43B	-15.86B	-12.16B
Financing Cash Flow	7.65B	-14.90B	-8.59B	-2.86B	-1.94B

Ryobi Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2717.00
• 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:5851, the sentiment is Neutral. The current price of 2717 is below the 20-day moving average (MA) of 2935.30, below the 50-day MA of 2834.69, and above the 200-day MA of 2534.75, indicating a neutral trend. The MACD of 49.38 indicates Positive momentum. The RSI at 51.66 is Neutral, neither overbought nor oversold. The STOCH value of 52.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5851.

Ryobi Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6586	77 Outperform	¥1.64T	21.50	―	2.18%	-1.72%	31.58%
9962	75 Outperform	$834.17B	27.41	9.10%	1.63%	6.28%	2.62%
5851	72 Outperform	¥92.36B	8.73	4.34%	3.36%	3.80%	-15.46%
6136	72 Outperform	¥270.85B	17.00	7.86%	2.55%	0.57%	4.54%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6474	62 Neutral	¥127.96B	23.00	2.64%	2.30%	-4.11%	46.76%
6141	57 Neutral	¥428.64B	19.90	5.32%	3.77%	-9.34%	164.21%

Ryobi Corporate Events

Ryobi Posts Strong Profit Rebound, Lifts Dividend Despite Muted 2026 Outlook

Ryobi Limited reported a solid recovery in earnings for the fiscal year ended December 31, 2025, with net sales rising 5.4% year on year to ¥309.1 billion and operating income jumping 33.4%, while net income attributable to owners of the parent surged 61.2%. Profitability ratios improved, equity increased with the equity ratio climbing to 52.2%, and the company raised its annual dividend from ¥85 to ¥100 per share, signaling confidence despite forecasting only modest sales growth and largely flat operating income for 2026.

Cash flow from operating activities declined to ¥13.9 billion while investment outlays increased, leading to negative free cash flow but were partly offset by positive financing cash flows, and year-end cash and equivalents remained broadly stable. For the 2026 fiscal year, Ryobi projects slightly higher full-year sales of ¥313.0 billion and a modest 2.8% rise in net income, alongside a planned further dividend increase to ¥104 per share, suggesting a continued shareholder-return focus even as management guides for slower profit growth and lower earnings in the first half.

The most recent analyst rating on (JP:5851) stock is a Buy with a Yen3097.00 price target. To see the full list of analyst forecasts on Ryobi stock, see the JP:5851 Stock Forecast page.

Ryobi Moves to Broaden Corporate Purpose With Articles of Incorporation Amendments

Ryobi Limited’s board has approved a proposal to partially amend its Articles of Incorporation, adding new business purposes related to outsourced administrative processing and the production, processing and sale of food products. The move, which will be put to a shareholder vote on March 26, 2026, is intended to align the formal corporate purpose with the current status and diversification of Ryobi’s business, potentially enabling operational expansion and greater flexibility in pursuing new revenue opportunities.

If approved, the amendments will take effect on the same day as the annual general meeting, clarifying and updating the company’s stated scope of activities. By explicitly incorporating these additional business lines into its governing documents, Ryobi positions itself to legitimize and support broader commercial initiatives, which may influence its long-term strategic direction and competitive standing in both existing and newly entered markets.

The most recent analyst rating on (JP:5851) stock is a Buy with a Yen3097.00 price target. To see the full list of analyst forecasts on Ryobi stock, see the JP:5851 Stock Forecast page.

Ryobi Completes ¥1.5 Billion Share Repurchase Program

Ryobi Limited has completed a share repurchase program authorized by its board on October 14, 2025, buying back 147,300 shares of its common stock for a total of ¥399.5 million through market purchases on the Tokyo Stock Exchange between December 1 and December 31, 2025. Under the broader authorization, the company repurchased an aggregate 558,700 shares for approximately ¥1.5 billion by December 31, 2025, close to the approved financial ceiling and within the 670,000-share cap, with a portion of these shares scheduled for cancellation, underscoring Ryobi’s ongoing efforts to optimize its capital structure and potentially support shareholder returns.

The most recent analyst rating on (JP:5851) stock is a Buy with a Yen3029.00 price target. To see the full list of analyst forecasts on Ryobi stock, see the JP:5851 Stock Forecast page.

Ryobi to Cancel All Treasury Shares, Reducing Total Shares Outstanding

Ryobi Limited’s board of directors has approved the cancellation of all 836,672 treasury shares held by the company, representing 2.56% of its issued shares prior to cancellation. Following the cancellation, scheduled for December 30, 2025, the total number of issued shares will decrease to 31,809,471, a move that will modestly tighten the company’s share float and can be seen as a shareholder-friendly capital measure that may enhance earnings per share and equity value over the long term.

The most recent analyst rating on (JP:5851) stock is a Buy with a Yen3029.00 price target. To see the full list of analyst forecasts on Ryobi stock, see the JP:5851 Stock Forecast page.

Ryobi Limited Announces Change in Corporate Auditors

Ryobi Limited has announced the passing of its outside corporate auditor, Mr. Takashi Hirano, on December 2, 2025. To fill the vacancy, Mr. Takashi Shigezaki, previously appointed as a substitute corporate auditor, has been appointed as the new outside corporate auditor on the same day. This change in the auditing team is expected to maintain the company’s governance and oversight functions.

The most recent analyst rating on (JP:5851) stock is a Hold with a Yen2773.00 price target. To see the full list of analyst forecasts on Ryobi stock, see the JP:5851 Stock Forecast page.