Okamoto Machine Tool Works,Ltd. (6125) AI Stock Analysis

• Market Cap: ¥32.01B
• Dividend Yield: 3.56%
• Average Volume (3M): 20.98K
• Price to Earnings (P/E): 20.1
• Beta (1Y): 1.15
• Revenue Growth: -3.85%
• EPS Growth: -45.64%
• Country: JP
• Employees: 2,283
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): -20.89
• Shares Outstanding: 6,703,795
• 10 Day Avg. Volume: 26,660
• 30 Day Avg. Volume: 20,976
• PEG Ratio: -0.17
• Price to Book (P/B): 0.57
• Price to Sales (P/S): 0.53
• P/FCF Ratio: -3.92
• 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: 62 Neutral
• Price Target: ¥5,236.00 ▲(16.36% Upside)
• Action: Reiterated Date: 11/08/25
• Date: Action: Reiterated 11/08/25

The stock's overall score is driven by a mixed financial performance with strong margins but declining profitability and cash flow issues. Technical indicators suggest a bearish trend, while the valuation is attractive with a low P/E ratio and high dividend yield. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Strong gross profit margins

Sustained gross margins above 20% indicate durable production efficiency and cost control in grinding machines. This margin buffer supports investment in R&D and aftermarket service capabilities, and helps preserve operating profitability even if top-line growth is uneven over the next 2–6 months.

Solid equity position / improving equity ratio

An improving equity ratio and solid equity base provide financial stability, lower refinancing risk, and capacity to fund capex or absorb cyclicality. This balance sheet strength supports strategic investments and ensures resilience through industry downturns over the medium term.

Healthy operational (EBIT/EBITDA) margins

Relatively healthy EBIT/EBITDA margins reflect operational competitiveness and process efficiency in manufacturing and service delivery. This suggests the company can generate operating profits from core activities, supporting sustainable cash generation and reinvestment potential.

Negative Factors

Negative revenue growth

Declining revenue near -5% signals demand weakness in end markets or loss of sales momentum. Persistent top-line contraction reduces scale economies, pressures fixed-cost absorption, and can erode long-term margin sustainability unless new product wins or market recovery restore growth.

Sharp EPS decline / net margin deterioration

A steep EPS decline and worsening net margins indicate the company struggles to convert revenue into shareholder returns, possibly from higher costs, pricing pressure or one-offs. This reduces return on capital and undermines investor confidence in sustained profitability.

Operating cash flow and FCF weakness

Negative operating cash flow and declining free cash flow growth point to cash conversion issues and potential liquidity strain. Even with short-term cash reserves, prolonged negative OCF limits the firm's ability to fund capex, service dividends, or pursue strategic moves without raising external financing.

Okamoto Machine Tool Works,Ltd. Business Overview & Revenue Model

Company Description

Okamoto Machine Tool Works, Ltd. manufactures and sells grinding machines and semiconductor related equipment in Japan and internationally. It offers conventional type precision, CNC precision, double column type, and rotary surface grinding machines; precision and ultra precision form grinding machines; precision cylindrical, internal, universal, and center hole grinding machines; gear and specialized grinding machines; and consumer and special designed devices. It also provides semiconductor equipment devices, including wafer backside grinding machines, polishing machines, lapping machines, slicing machines, and ingot processing machines. In addition, the company provides various materials. Okamoto Machine Tool Works, Ltd. was founded in 1926 and is headquartered in Annaka, Japan.

How the Company Makes Money

Okamoto Machine Tool Works, Ltd. generates revenue primarily through the sale of its precision grinding machines and equipment. The company's revenue model includes direct sales to manufacturers and distributors, as well as offering maintenance and repair services for its machines. Key revenue streams include new machine sales, aftermarket services, and spare parts sales. Additionally, Okamoto has established strategic partnerships with various industries, enhancing its market reach and providing tailored solutions that meet specific customer needs, thereby contributing to its overall earnings.

Okamoto Machine Tool Works,Ltd. Financial Statement Overview

Summary

The company shows strong gross profit margins and a solid equity position, but faces challenges with declining net profit margins, negative revenue growth, and cash flow pressures. Operational efficiency is healthy but has declined, indicating increased costs or reduced pricing power.

Income Statement

The company's income statement shows strong gross profit margins consistently above 20%, indicating efficient production. However, the net profit margin has declined significantly from the previous year, primarily due to decreased revenues and increased expenses. Revenue growth has been negative in the past year, reflecting a challenging market environment. EBIT and EBITDA margins show a healthy operational efficiency but experienced a decline, suggesting increased operational costs or reduced pricing power.

Balance Sheet

The balance sheet reflects a solid equity position with an improving equity ratio, indicating financial stability. The debt-to-equity ratio is relatively moderate, showing a balanced leverage approach. However, the return on equity has decreased, suggesting lower profitability from shareholder investments. The company's asset base has grown, supporting potential for future expansion.

Cash Flow

Cash flow analysis reveals challenges with negative free cash flow growth, indicating cash management issues. Operating cash flow has turned negative, which could stress liquidity if persistent. The operating cash flow to net income ratio has deteriorated, suggesting inefficiencies in converting income into cash. However, the company has substantial cash reserves to support operations in the short term.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	44.81B	43.73B	50.20B	45.52B	37.55B	30.37B
Gross Profit	13.45B	12.53B	15.53B	14.37B	11.93B	8.49B
EBITDA	5.71B	5.04B	8.59B	7.15B	5.71B	3.38B
Net Income	2.43B	2.02B	4.56B	4.03B	2.89B	1.46B
Balance Sheet
Total Assets	62.96B	66.80B	60.16B	55.10B	47.51B	35.05B
Cash, Cash Equivalents and Short-Term Investments	12.08B	16.40B	11.89B	12.65B	12.33B	4.92B
Total Debt	8.29B	11.82B	9.36B	6.38B	5.48B	10.25B
Total Liabilities	22.92B	26.24B	30.19B	30.24B	27.18B	19.97B
Stockholders Equity	40.03B	40.56B	29.98B	24.86B	20.33B	15.08B
Cash Flow
Free Cash Flow	0.00	-5.92B	-2.09B	-486.00M	10.50B	5.07B
Operating Cash Flow	0.00	-2.11B	929.00M	2.68B	11.67B	5.92B
Investing Cash Flow	0.00	-5.09B	-3.63B	-3.08B	-1.55B	-919.00M
Financing Cash Flow	0.00	10.49B	1.24B	406.00M	-3.15B	-3.69B

Okamoto Machine Tool Works,Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4500.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6125, the sentiment is Positive. The current price of 4500 is below the 20-day moving average (MA) of 4796.00, below the 50-day MA of 4755.20, and below the 200-day MA of 4532.52, indicating a neutral trend. The MACD of -4.52 indicates Negative momentum. The RSI at 50.88 is Neutral, neither overbought nor oversold. The STOCH value of 82.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6125.

Okamoto Machine Tool Works,Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6104	81 Outperform	¥99.47B	48.30	5.02%	3.23%	-10.00%	-51.92%
6258	74 Outperform	¥95.58B	14.29	9.39%	1.68%	9.27%	69.52%
6118	74 Outperform	¥64.67B	12.89	―	2.54%	2.00%	39.80%
6143	69 Neutral	¥77.89B	17.06	7.00%	3.02%	15.78%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6125	62 Neutral	¥32.01B	20.12	―	3.56%	-3.85%	-45.64%
6135	61 Neutral	¥281.81B	15.21	6.63%	0.91%	9.03%	10.76%