Ryobi (5851) AI Stock Analysis

• Market Cap: ¥78.39B
• Dividend Yield: 3.36%
• Average Volume (3M): 325.32K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 1.12
• 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): 349
• Revenue Forecast (FY): ¥323.00B

• Rating: 72 Outperform
• Price Target: ¥2,763.00 ▲(1.69% 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

Stable Revenue Growth

Consistent top-line growth through 2022–2025 (2025 revenue +~5.5% YoY) indicates a recovering and stable demand base across end markets. That steady revenue trend supports predictable production planning, capacity utilization and underpins medium-term earnings resilience.

Improved Profitability vs. Earlier Years

Margins and net income materially improved from the 2020–2021 loss period, demonstrating operational recovery and better cost absorption. Sustained positive margins, even if modest, reflect structural improvements in product mix, pricing or efficiency that support longer-term profit generation.

Moderate Leverage and Stronger Equity Base

A debt-to-equity near 0.42 and a growing equity base improve financial flexibility versus the 2020–2022 period. Moderate leverage and positive returns (ROE ~6.2%) provide a buffer for investment or downturns, supporting sustainable operations and capacity to fund strategic initiatives.

Negative Factors

Negative Free Cash Flow in 2025

A swing to negative free cash flow in 2025 despite positive operating cash across the period signals weaker cash conversion or heavier investments. Negative FCF undermines the quality of reported earnings, limits reinvestment capacity, and raises funding risk over the next several quarters.

Step-up in Total Debt

Higher total debt in 2025 reduces financial flexibility, particularly given volatile cash generation. Elevated leverage can force tighter capital allocation, increase interest burden, and constrain strategic spending or shareholder returns if cash flow does not stabilize.

Thin and Pressured Margins

Manufacturing margins are modest and showed a recent dip, indicating exposure to cost, pricing or mix pressures. Thin margins leave less room to absorb raw-material inflation or competitive pricing, making profits more sensitive to cyclical or structural cost changes.

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

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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	34.23B	34.48B	28.23B	18.46B
EBITDA	32.33B	28.91B	30.69B	25.28B	15.70B
Net Income	11.18B	6.93B	10.12B	4.79B	-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	62.73B	70.91B	74.82B	74.23B
Total Liabilities	154.18B	156.21B	158.12B	156.56B	147.70B
Stockholders Equity	179.47B	167.35B	151.30B	134.46B	122.93B
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: Negative
• Last Price: 2717.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5851, the sentiment is Negative. The current price of 2717 is below the 20-day moving average (MA) of 2749.60, below the 50-day MA of 2807.36, and above the 200-day MA of 2573.65, indicating a bearish trend. The MACD of -92.86 indicates Positive momentum. The RSI at 33.12 is Neutral, neither overbought nor oversold. The STOCH value of 16.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥1.42T	16.74	―	2.18%	-1.72%	31.58%
9962	75 Outperform	¥745.59B	18.30	9.10%	1.63%	6.28%	2.62%
5851	72 Outperform	¥78.39B	7.91	6.66%	3.36%	3.80%	-15.46%
6136	72 Outperform	¥235.48B	13.29	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	¥111.43B	17.03	2.64%	2.30%	-4.11%	46.76%
6141	57 Neutral	¥355.05B	15.50	11.46%	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.