PIOLAX, Inc. (5988) AI Stock Analysis

• Market Cap: ¥42.20B
• Dividend Yield: 5.45%
• Average Volume (3M): 108.00K
• Price to Earnings (P/E): 49.9
• Beta (1Y): 0.90
• Revenue Growth: -6.20%
• EPS Growth: -64.65%
• Country: JP
• Employees: 2,883
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 11.84
• Shares Outstanding: 37,054,100
• 10 Day Avg. Volume: 157,980
• 30 Day Avg. Volume: 107,999
• PEG Ratio: -0.82
• Price to Book (P/B): 0.90
• Price to Sales (P/S): 1.28
• P/FCF Ratio: 22.72
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ¥1,953.00 ▲(15.63% Upside)

PIOLAX, Inc. scores well in financial performance due to its strong balance sheet and effective cash flow management, which are the most significant factors. Technical analysis indicates a neutral trend with potential oversold conditions, while valuation metrics suggest the stock may be overvalued despite a high dividend yield. The absence of earnings call and corporate events data did not impact the score.

Positive Factors

Financial Stability

The company's strong equity base and effective cash flow management indicate resilience and capacity to invest in growth opportunities.

Cash Generation

Significant free cash flow growth enhances financial flexibility, supporting reinvestment in business operations and shareholder returns.

Balance Sheet Health

A robust balance sheet with low leverage provides stability and reduces financial risk, enabling strategic investments and growth.

Negative Factors

Revenue Decline

Declining revenue trends can hinder growth prospects and affect profitability, necessitating strategic adjustments to regain momentum.

Profitability Challenges

Lower profitability margins indicate challenges in cost management and pricing power, potentially impacting long-term earnings sustainability.

Earnings Growth

A significant decline in earnings per share growth reflects operational challenges and may deter investor confidence in future performance.

PIOLAX, Inc. Business Overview & Revenue Model

Company Description

PIOLAX, Inc. designs, develops, produces, and sells various parts and products for automotive, medical, and consumer and security industries. It offers valves and fuel parts for filling, storing, and providing petrol; connectors for piping used around radiators; compact filters for fuel and oil systems; and evapo-tube ASSY products. The company also provides powertrain parts, which include various springs that are used for transmissions, as well as snap rings used for holding parts; open-close parts, including air dampers and locks for glove boxes; resin and metal fasteners for fixing automobile interior/exterior parts and connecting pipes to car body; and harnesses for bundling electric wires. In addition, it offers precision parts comprising retainers and tension springs to hold wheel caps, etc.; injection-molded parts for automotive interior/exterior; and visor-related parts and luggage board handles, as well as plate clamps and screw clamps. Further, the company provides medical appliances, such as spiral catheters and stents; and consumer and security products, including springs for combination faucets, and security parts to seal moneybags or container vehicles, as well as hot water blocking valves and headphone wire bands. It operates in Japan, rest of Asia, the United States, Europe, and internationally. The company was formerly known as Kato Hatsujo Inc. and changed its name to PIOLAX, Inc. in October 1995. PIOLAX, Inc. was founded in 1933 and is headquartered in Yokohama, Japan.

How the Company Makes Money

PIOLAX generates revenue primarily through the sale of its precision metal components and fasteners to various industries, with a significant focus on the automotive sector. The company operates on a business-to-business (B2B) model, supplying products directly to manufacturers and assembly plants. Key revenue streams include bulk orders from automotive manufacturers, contracts with electronic device producers, and partnerships with industrial firms requiring specialized components. Additionally, PIOLAX benefits from long-term contracts that provide stable income and often engages in collaborative projects with clients to develop custom solutions, further solidifying client relationships and ensuring repeat business. The company's commitment to quality and innovation also allows it to command premium prices for its high-performance products.

PIOLAX, Inc. Financial Statement Overview

Summary

PIOLAX, Inc. demonstrates financial stability with strong equity positions and effective cash flow management. Despite recent revenue challenges, the company maintains solid margins and a robust balance sheet, positioning it well for future growth opportunities.

Income Statement

PIOLAX, Inc. has experienced fluctuating revenue trends with a noticeable decline in the most recent year. The company reported a gross profit margin of 21.4% and a net profit margin of 2.8% for the latest period, which indicates moderate profitability but reduced performance when compared to the previous year. Nonetheless, the EBIT and EBITDA margins stood at 3.8% and 12.3% respectively, showcasing decent operational efficiency.

Balance Sheet

The balance sheet of PIOLAX, Inc. is robust with a strong equity base, as evidenced by a high equity ratio of 85.8%. The debt-to-equity ratio is low at 0.68, indicating low leverage and financial stability. The return on equity (ROE) for the latest period is 2.0%, which suggests room for improvement in generating returns for shareholders.

Cash Flow

The company's cash flow statement reveals a positive trend in free cash flow generation, with a free cash flow growth rate of 329.2% in the latest year. The operating cash flow to net income ratio is 4.5, indicating strong cash generation relative to net earnings. Additionally, the free cash flow to net income ratio is 2.0, reflecting effective cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	62.71B	63.35B	64.55B	58.42B	55.14B	50.15B
Gross Profit	13.07B	13.53B	16.26B	14.69B	15.08B	12.84B
EBITDA	7.32B	7.77B	9.47B	8.36B	8.89B	9.03B
Net Income	1.20B	1.79B	4.01B	3.38B	4.22B	3.96B
Balance Sheet
Total Assets	94.62B	105.46B	121.42B	115.46B	109.67B	106.05B
Cash, Cash Equivalents and Short-Term Investments	25.22B	35.68B	37.27B	38.84B	38.04B	38.56B
Total Debt	18.85B	614.00M	291.00M	277.00M	404.00M	1.67B
Total Liabilities	29.14B	13.68B	13.47B	11.21B	11.34B	12.31B
Stockholders Equity	64.22B	90.45B	106.30B	102.67B	96.89B	92.41B
Cash Flow
Free Cash Flow	0.00	3.57B	832.00M	1.71B	3.75B	4.75B
Operating Cash Flow	0.00	8.12B	8.37B	6.07B	6.44B	7.34B
Investing Cash Flow	0.00	3.34B	-8.57B	-5.00B	-3.86B	-2.58B
Financing Cash Flow	0.00	-6.47B	-4.70B	-2.44B	-4.69B	300.00M

PIOLAX, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1689.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5988, the sentiment is Negative. The current price of 1689 is below the 20-day moving average (MA) of 1691.45, below the 50-day MA of 1712.48, and below the 200-day MA of 1873.90, indicating a bearish trend. The MACD of -7.33 indicates Negative momentum. The RSI at 48.39 is Neutral, neither overbought nor oversold. The STOCH value of 47.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5988.

PIOLAX, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5970	85 Outperform	¥81.65B	6.71	―	5.00%	-5.89%	8.95%
7287	79 Outperform	¥125.27B	13.68	―	3.00%	1.77%	117.03%
7250	78 Outperform	¥183.56B	11.55	―	1.06%	3.62%	3.64%
7292	72 Outperform	¥80.29B	12.20	―	3.19%	4.44%	14.91%
7241	68 Neutral	¥95.56B	8.67	―	3.84%	-7.35%	43.31%
5988	66 Neutral	¥42.20B	49.93	―	5.45%	-6.20%	-64.65%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

PIOLAX, Inc. Corporate Events

PIOLAX, Inc. Completes Share Buyback as Part of Strategic Capital Optimization

PIOLAX, Inc. has completed the acquisition of its own shares, as resolved by its Board of Directors in May 2025. The acquisition involved 72,300 common shares at a total cost of JPY 123,425,800, executed through market transactions on the Tokyo Stock Exchange. This move is part of a broader strategy to acquire up to 1,200,000 shares by March 2026, reflecting the company’s commitment to optimizing its capital structure and potentially enhancing shareholder value.

PIOLAX, Inc. Reports Decline in Financial Results for First Half of 2025

PIOLAX, Inc. reported a decline in its consolidated financial results for the six months ending September 30, 2025, with net sales dropping by 5.9% and profits significantly decreasing compared to the previous year. The company’s financial position showed a reduction in total assets and net assets, reflecting challenges in maintaining profitability. Despite these setbacks, PIOLAX continues to maintain its dividend forecast, indicating a commitment to shareholder returns amidst financial pressures.

PIOLAX, Inc. Advances Share Buyback Program

PIOLAX, Inc. announced the acquisition of 286,000 of its own shares, amounting to JPY 496,665,500, as part of a broader share buyback program authorized by its Board of Directors. This move is part of a strategic initiative to enhance shareholder value and optimize capital structure, with a total of 1,031,700 shares acquired so far under the program.

PIOLAX, Inc. Updates on Share Repurchase Program

PIOLAX, Inc. announced the status of its share repurchase program, which was initiated following a Board resolution on May 12, 2025. As of September 30, 2025, the company has repurchased 89,200 shares at a cost of JPY 165,065,800, as part of a broader plan to acquire up to 1.2 million shares by March 31, 2026. This move is aimed at enhancing shareholder value and optimizing the company’s capital structure.