Rinnai (5947) AI Stock Analysis

• Market Cap: ¥533.44B
• Dividend Yield: 2.25%
• Average Volume (3M): 271.58K
• Price to Earnings (P/E): 11.8
• Beta (1Y): 0.56
• Revenue Growth: 3.33%
• EPS Growth: 9.57%
• Country: JP
• Employees: 10,837
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): 83.77
• Shares Outstanding: 141,126,770
• 10 Day Avg. Volume: 269,030
• 30 Day Avg. Volume: 271,580
• PEG Ratio: 1.22
• Price to Book (P/B): 1.21
• Price to Sales (P/S): 1.06
• P/FCF Ratio: 12.04
• 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): 251.28
• Revenue Forecast (FY): ¥471.58B

• Rating: 76 Outperform
• Price Target: ¥4,870.00 ▲(19.95% Upside)
• Action: Reiterated Date: 11/07/25
• Date: Action: Reiterated 11/07/25

Rinnai's strong financial performance, characterized by robust revenue growth and a solid balance sheet, is the primary driver of its stock score. The technical analysis suggests a positive trend, though caution is advised due to potential short-term weakness. The valuation is reasonable, with an attractive dividend yield enhancing the stock's appeal.

Positive Factors

Balance sheet strength

Rinnai's extremely low leverage and high equity ratio create durable financial flexibility. Minimal debt reduces refinancing risk, supports steady dividends and capex funding, and allows the company to absorb demand shocks or invest in product development without relying on external financing.

Sustained profitability margins

Healthy gross and operating margins indicate efficient manufacturing, pricing power, and cost control in core appliance lines. These margins support reinvestment in R&D and aftermarket service capabilities, enabling durable competitive positioning and steady contribution to returns over multi-quarter horizons.

Strong cash generation

The company generates substantial operating and free cash flow, giving it internal funding for maintenance capex, product development, and shareholder distributions. Robust cash generation reduces reliance on external capital and improves the ability to execute strategic initiatives over coming quarters.

Negative Factors

Modest net margin

A mid-single-digit net margin limits the firm's buffer against rising input or energy costs and constrains retained earnings available for growth. In prolonged inflationary or competitive pressure scenarios, modest net profitability can compress free cash flow and restrict strategic reinvestment.

Imperfect FCF conversion

Although cash generation is strong, conversion ratios below one indicate net income does not fully translate into free cash, likely due to working capital or capex needs. Persistent conversion inefficiency could limit capacity to raise dividends, pursue bolt-on M&A, or self-fund larger strategic initiatives.

Product and end-market concentration

Rinnai's heavy exposure to gas-fired heating and replacement/new-build cycles concentrates revenue risk. Shifts in construction activity, energy policy toward electrification, or faster adoption of alternate heating technologies could erode demand or require costly product redesigns, increasing long-term execution risk.

Rinnai Business Overview & Revenue Model

Company Description

Rinnai Corporation develops, manufactures, and sells heating products in Japan, the United States, Australia, China, South Korea, Indonesia, and internationally. The company offers water heaters, including tankless water heaters and hybrid water heaters, as well as water heaters with bath-filling systems and heating systems, and hot-water units; and kitchen appliances, such as tabletop cookers and stoves, ovens, dishwashers, and a range of hoods and rice cookers, as well as built-in hobs, such as stovetops. It also provides air conditioning appliances comprising fan heaters, fanned flue heaters, fan-forced heaters, and infrared heaters; commercial-use equipment that include ceramic grillers, commercial-use ranges, and rice cookers; and others, which comprise clothes dryers, infrared burners, and components. The company offers its products under the Rinnai brand name. The company was formerly known as Rinnai & Co. and changed its name to Rinnai Corporation in 1971. Rinnai Corporation was founded in 1920 and is headquartered in Nagoya, Japan.

How the Company Makes Money

Rinnai generates revenue primarily through the sale of its heating and cooling products, which include water heaters, boilers, and kitchen appliances. The company operates a diversified revenue model that includes both direct sales to consumers and partnerships with distributors, retailers, and contractors in the construction and home improvement sectors. Key revenue streams include residential products, commercial heating solutions, and maintenance services. Significant partnerships with home improvement retailers and construction firms enhance Rinnai's market reach and distribution capabilities, contributing to its overall earnings. Additionally, the company invests in research and development to innovate and expand its product lines, which helps to maintain a competitive edge and drive future growth.

Rinnai Financial Statement Overview

Summary

Rinnai demonstrates strong financial health with consistent revenue growth and solid profitability margins. The balance sheet is robust with low leverage and a high equity ratio, minimizing financial risk. Cash flow generation is strong, though there is room for improvement in free cash flow conversion.

Income Statement

Rinnai has demonstrated consistent revenue growth, with a notable increase of 1.76% in the latest year. The company maintains strong profitability metrics, with a gross profit margin of 32.94% and a net profit margin of 6.45%. EBIT and EBITDA margins are healthy at 10.86% and 14.15%, respectively, indicating efficient operations and cost management.

Balance Sheet

Rinnai's balance sheet is robust, characterized by a very low debt-to-equity ratio of 0.87%, suggesting minimal leverage and financial risk. The return on equity is solid at 7.32%, reflecting effective use of shareholder funds. The equity ratio stands at 66.91%, indicating a strong capital structure with significant equity financing.

Cash Flow

The company shows strong cash flow generation, with a significant increase in free cash flow. The operating cash flow to net income ratio of 0.53 indicates good cash conversion efficiency. However, the free cash flow to net income ratio of 0.71 suggests room for improvement in translating profits into free cash flow.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	464.88B	460.32B	430.19B	425.23B	366.19B	344.36B
Gross Profit	158.72B	151.61B	137.84B	138.40B	116.56B	115.33B
EBITDA	62.45B	65.13B	60.88B	58.00B	50.96B	55.47B
Net Income	29.50B	29.69B	26.67B	26.10B	23.75B	27.58B
Balance Sheet
Total Assets	574.59B	606.59B	577.09B	547.11B	512.87B	497.29B
Cash, Cash Equivalents and Short-Term Investments	166.97B	176.81B	155.67B	158.62B	185.49B	204.93B
Total Debt	23.82B	3.53B	3.76B	2.69B	2.06B	1.73B
Total Liabilities	130.84B	144.87B	139.65B	139.92B	134.01B	125.97B
Stockholders Equity	396.86B	405.85B	387.77B	364.15B	343.12B	342.33B
Cash Flow
Free Cash Flow	0.00	40.66B	5.99B	-7.32B	7.86B	36.21B
Operating Cash Flow	0.00	57.50B	43.35B	19.39B	28.70B	49.49B
Investing Cash Flow	0.00	-22.68B	-19.97B	-30.09B	-25.49B	-15.82B
Financing Cash Flow	0.00	-26.50B	-23.66B	-21.31B	-27.11B	-7.27B

Rinnai Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4060.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5947, the sentiment is Negative. The current price of 4060 is above the 20-day moving average (MA) of 4054.35, below the 50-day MA of 4067.58, and above the 200-day MA of 3771.30, indicating a neutral trend. The MACD of -45.05 indicates Positive momentum. The RSI at 32.05 is Neutral, neither overbought nor oversold. The STOCH value of 19.47 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5947.

Rinnai Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5951	82 Outperform	¥17.03B	2.31	―	2.30%	9.86%	119.10%
6484	81 Outperform	¥20.08B	9.88	―	3.46%	3.87%	5.89%
5947	76 Outperform	¥533.44B	11.76	8.51%	2.25%	3.33%	9.57%
7981	72 Outperform	¥184.41B	8.20	―	3.41%	6.17%	61.39%
5946	67 Neutral	¥66.16B	31.55	1.61%	2.27%	1.82%	-32.79%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
5909	56 Neutral	¥28.69B	3.93	―	2.94%	0.41%	-51.02%

Rinnai Corporate Events

Rinnai Lifts Nine-Month Profit 20% and Confirms Higher Dividend for FY2025

Rinnai reported consolidated net sales of ¥339.4 billion for the nine months to December 31, 2025, up 2.1% year on year, with operating income rising 5.9% and net income attributable to owners of the parent jumping 20.4% to ¥27.5 billion, supported by improved profitability. The company maintained its full-year forecast, targeting ¥470 billion in sales and an 11.1% rise in full-year net income, while confirming a planned annual dividend increase to ¥100 per share and expanding its consolidation scope with the addition of MT Industrial S.A.C., underscoring confidence in earnings and shareholder returns.

Rinnai’s equity ratio strengthened to 68.8% as of December 31, 2025, reflecting a solid balance sheet despite a slight decline in total assets from March 2025. The company’s sustained earnings growth and unchanged guidance suggest stable demand for its core products and disciplined financial management, which are likely to support its competitive position and appeal to long-term investors.

The most recent analyst rating on (JP:5947) stock is a Buy with a Yen4870.00 price target. To see the full list of analyst forecasts on Rinnai stock, see the JP:5947 Stock Forecast page.