TONE Co. Ltd. (5967) AI Stock Analysis

• Market Cap: ¥11.14B
• Dividend Yield: 2.2%
• Average Volume (3M): 15.57K
• Price to Earnings (P/E): 15.4
• Beta (1Y): 0.21
• Revenue Growth: -2.69%
• EPS Growth: 6.29%
• Country: JP
• Employees: 155
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): N/A
• Shares Outstanding: 23,426,000
• 10 Day Avg. Volume: 17,700
• 30 Day Avg. Volume: 15,566
• PEG Ratio: -0.86
• Price to Book (P/B): 0.99
• Price to Sales (P/S): 1.48
• P/FCF Ratio: 46.82
• 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: 61 Neutral
• Price Target: ¥563.00 ▲(17.05% Upside)

The score is primarily supported by a strong, low-leverage balance sheet, but is held back by inconsistent revenue/profitability trends and volatile cash flow. Technical indicators are cautious (negative MACD with near-overbought RSI/Stochastic), while valuation appears roughly fair with a modest dividend yield.

Positive Factors

Balance Sheet Strength

A low-debt, high-equity capital structure provides durable financial flexibility: it lowers refinancing risk, supports capital spending or targeted M&A, and preserves the ability to sustain dividends or weather cyclical downturns over the next several months to years.

Professional Brand & Repeat Demand

Focus on branded hand tools for professional users creates recurring revenue from repeat purchases, replacement parts, and aftermarket accessories. Distribution through wholesalers and B2B channels supports stable demand, pricing power, and long-term customer relationships.

Operational Margin Resilience

Relatively healthy EBIT/EBITDA margins indicate operational efficiency and cost structure advantages that help preserve profitability through revenue volatility. This margin base supports sustained cash generation and reinvestment capacity over the medium term.

Negative Factors

Inconsistent Revenue Trends

Intermittent top-line declines hinder long-term planning and investment. Persistent inconsistency in sales reduces visibility into demand, complicates capacity utilization and inventory management, and can limit the company’s ability to execute growth initiatives reliably.

Margin Compression

Declining gross and net margins signal pressure from costs or pricing that erodes profitability. Over months this reduces retained earnings and free cash available for R&D, capital expenditure, or shareholder returns, increasing vulnerability to cost inflation or competitive pricing.

Volatile Cash Flow Conversion

Significant swings in operating cash flow relative to income make cash generation unpredictable, complicating funding for capex, dividends, or debt servicing. Even with some FCF resilience, volatility raises execution risk and constrains strategic flexibility over the medium term.

TONE Co. Ltd. Business Overview & Revenue Model

Company Description

Tone Co., Ltd. develops, manufactures, and sells professional hand tools, power tools, and torque measuring devices under the TONE brand name in Asia, North America, Europe, and internationally. The company operates through Domestic and Abroad segments. It also offers tool set, storage tools, automotive and cycle tools, torque wrenches, stainless steel and titanium tools, air tools, and accessory parts. In addition, the company offers saving effort tools comprising of electric tools, nutrunner, shear wrench, torshat, power digi torque/power wrench, and equipment socket. Further, the company provides work tools consisting of socket wrench set, socket adapter, hammer/blow tool, handle, T and L wrench, drivers, bits, adjustable wrench/pipe wrench, spanner/box wrench, and pilers. It serves general, aerospace, construction, automotive, bridge, plant engineering, transportation, and alternative energy industries. The company was formerly known as Maeda Metal Industries, Ltd. and changed its name to Tone Co., Ltd. in November 2013. Tone Co., Ltd. was founded in 1938 and is headquartered in Osaka, Japan.

How the Company Makes Money

TONE Co. Ltd. generates revenue primarily through the sale of its telecommunications equipment, including mobile devices and accessories. The company also earns income from service contracts, subscriptions, and maintenance agreements associated with its products. Additionally, TONE Co. Ltd. has established strategic partnerships with various telecommunications carriers, which enable it to offer bundled services and expand its market reach. The company may also engage in licensing agreements and collaborations with technology firms, contributing further to its revenue streams.

TONE Co. Ltd. Financial Statement Overview

Summary

Strong balance sheet with low leverage and a healthy equity base supports stability, but profitability and growth are mixed. Margins have trended down, revenue growth has been inconsistent with a recent decline, and cash flow conversion/FCF has been volatile.

Income Statement

The income statement shows a mixed performance. Gross profit margins have slightly decreased over the years, indicating some pressure on cost management. Net profit margins have also declined, reflecting challenges in maintaining profitability. Revenue growth has been inconsistent, with a recent decline, which is a concern. However, EBIT and EBITDA margins remain relatively healthy, suggesting operational efficiency.

Balance Sheet

The balance sheet is strong with a low debt-to-equity ratio, indicating conservative leverage and financial stability. Return on equity has been stable, though slightly declining, which suggests consistent shareholder returns. The equity ratio is healthy, showing a strong capital structure. Overall, the balance sheet reflects financial stability and low risk.

Cash Flow

Cash flow analysis reveals volatility, with significant fluctuations in free cash flow growth. The operating cash flow to net income ratio has been inconsistent, indicating potential challenges in converting income to cash. However, the free cash flow to net income ratio is relatively stable, suggesting some resilience in cash generation capabilities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.54B	7.59B	7.58B	6.80B	6.45B	6.12B
Gross Profit	3.05B	2.96B	3.13B	3.03B	2.74B	2.65B
EBITDA	1.49B	1.27B	1.47B	1.39B	1.20B	1.30B
Net Income	958.00M	787.05M	942.67M	866.63M	692.50M	841.95M
Balance Sheet
Total Assets	14.47B	14.53B	14.87B	11.35B	9.97B	9.47B
Cash, Cash Equivalents and Short-Term Investments	2.03B	1.91B	2.25B	1.84B	1.70B	2.37B
Total Debt	1.70B	1.80B	2.21B	1.25M	102.19M	103.12M
Total Liabilities	3.08B	3.23B	4.20B	1.62B	1.46B	1.43B
Stockholders Equity	11.39B	11.30B	10.67B	9.73B	8.51B	8.04B
Cash Flow
Free Cash Flow	0.00	239.64M	-1.20B	150.75M	79.62M	997.96M
Operating Cash Flow	0.00	629.23M	-760.04M	382.33M	770.39M	1.05B
Investing Cash Flow	0.00	-352.75M	-549.50M	-238.06M	-1.35B	-49.08M
Financing Cash Flow	0.00	-607.33M	1.70B	-13.40M	-112.24M	471.87M

TONE Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 481.00
• 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:5967, the sentiment is Negative. The current price of 481 is below the 20-day moving average (MA) of 490.25, below the 50-day MA of 497.60, and below the 200-day MA of 526.64, indicating a bearish trend. The MACD of -5.13 indicates Positive momentum. The RSI at 40.31 is Neutral, neither overbought nor oversold. The STOCH value of 12.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5967.

TONE Co. Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5945	81 Outperform	¥23.48B	12.57	―	3.89%	1.33%	29.73%
5957	76 Outperform	¥26.63B	12.76	―	2.76%	7.69%	-0.40%
5966	67 Neutral	¥6.08B	13.94	―	3.24%	1.16%	-31.17%
5952	66 Neutral	¥2.52B	15.46	―	2.75%	0.32%	19.67%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5967	61 Neutral	¥11.14B	15.45	―	2.20%	-2.69%	6.29%