SMC (OR) (6273) AI Stock Analysis

• Market Cap: ¥4.01T
• Dividend Yield: 1.86%
• Average Volume (3M): 424.13K
• Price to Earnings (P/E): 25.9
• Beta (1Y): 1.16
• Revenue Growth: 2.43%
• EPS Growth: -1.86%
• Country: JP
• Employees: 23,144
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 701.81
• Shares Outstanding: 63,869,358
• 10 Day Avg. Volume: 405,870
• 30 Day Avg. Volume: 424,133
• PEG Ratio: -1.86
• Price to Book (P/B): 1.76
• Price to Sales (P/S): 4.28
• P/FCF Ratio: 37.75
• 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: ¥73,999.37
• Price Target Upside: 15.05% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: ¥71,107.00 ▲(10.55% Upside)

The company's strong financial performance, characterized by robust revenue growth and a solid balance sheet, is a key strength. However, technical indicators suggest potential overbought conditions, and the stock is trading below its 200-day moving average, indicating caution. The valuation is reasonable, with a moderate P/E ratio and a modest dividend yield.

Positive Factors

Balance Sheet Strength

High equity ratio, low leverage and a significant cash position provide durable financial flexibility. This strengthens capacity to fund R&D, capital expenditure, dividend policy or targeted M&A during downturns, reducing refinancing and liquidity risk over multi-quarter horizons.

Revenue and Margin Track Record

Consistent revenue growth paired with healthy gross and operating margins indicates lasting operational efficiency and pricing power. Margin resilience underpins sustainable cash generation, enabling reinvestment in product development and supporting long-term competitiveness.

Recurring Service Revenue & Market Position

A leading market position in automation plus recurring maintenance and service contracts creates stable aftermarket revenue. This reduces cyclicality of product sales, supports predictable cash flows, and preserves customer relationships that sustain long-term pricing and retention.

Negative Factors

Recent Net Income Decline

A recent dip in net income, despite revenue growth, can signal margin pressure from cost inflation, mix shifts or competitive pricing. If persistent, it may erode free cash flow, constrain reinvestment, and weaken the company’s ability to fund dividends or strategic initiatives over coming quarters.

Free Cash Flow Volatility

Variable free cash flow complicates reliable capital allocation and increases sensitivity to working capital swings or capex timing. Even with improvements, FCF volatility can pressure dividend sustainability, limit aggressive M&A, and raise reliance on cash reserves during weaker demand periods.

Cyclicality of End Markets

Heavy exposure to manufacturing, automotive and electronics ties revenues to capital spending cycles. Structural downturns or slowdowns in these sectors can materially hit equipment orders and utilization, creating durable revenue volatility despite aftermarket services.

SMC (OR) Business Overview & Revenue Model

Company Description

SMC Corporation manufactures, processes, and sells automatic control equipment, sintered filters, and various types of filtration equipment worldwide. The company offers directional control valves, air cylinders, rotary actuators/air grippers, electric actuators/cylinders, vacuum equipment, air preparation equipment, modular F.R.L./pressure control equipment, lubrication equipment, fittings and tubings, flow control equipment, speed controllers, silencers/exhaust cleaners/blow guns/pressure gauges, switches/sensors/controllers, and static neutralization equipment. It also provides process valves, chemical liquid valves/fittings and needle valves/tubings, process pumps, temperature control equipment, process gas equipment, high vacuum equipment, industrial filters/sintered metal elements, pneumatic instrumentation equipment, and hydraulic equipment. The company was formerly known as Shoketsu Kinzoku Kogyo Co., Ltd. and changed its name to SMC Corporation in April 1986. SMC Corporation was incorporated in 1959 and is headquartered in Tokyo, Japan.

How the Company Makes Money

SMC generates revenue primarily through the sale of its automation products and solutions. Key revenue streams include direct sales to manufacturers and distributors, as well as strategic partnerships with other companies in the automation and engineering sectors. Additionally, SMC benefits from recurring revenue through maintenance contracts and service agreements for their equipment. The company's strong brand reputation and focus on research and development enable it to command premium pricing for its high-quality products, further contributing to its profitability.

SMC (OR) Financial Statement Overview

Summary

The company has demonstrated solid revenue growth and strong profit margins, indicating efficient cost management and profitability. The balance sheet is robust with a high equity ratio and low debt-to-equity ratio, suggesting financial stability. However, fluctuations in free cash flow and a slight decline in net income in the latest year should be monitored.

Income Statement

The company has demonstrated solid revenue growth over the years, with a notable increase from 2020 to 2025. Gross and net profit margins are strong, indicating efficient cost management and profitability. The EBIT and EBITDA margins further highlight the company's operational efficiency. However, a slight decline in net income in the latest year should be monitored for potential impacts.

Balance Sheet

The balance sheet is robust, with a high equity ratio indicating financial stability. The debt-to-equity ratio is low, suggesting minimal leverage risk. Strong stockholders' equity and a significant cash position highlight the company's solid financial foundation. However, the decreasing trend in total liabilities should be watched for future implications.

Cash Flow

The company's free cash flow has shown considerable improvement, indicating effective cash management. The operating cash flow to net income ratio is healthy, supporting operational sustainability. However, fluctuations in free cash flow over the years suggest potential volatility in cash generation.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	789.51B	792.11B	776.87B	824.77B	727.40B	552.18B
Gross Profit	355.01B	363.04B	363.08B	421.16B	363.85B	265.85B
EBITDA	239.61B	245.45B	286.09B	283.97B	293.59B	171.94B
Net Income	142.28B	156.34B	178.32B	224.61B	192.99B	121.79B
Balance Sheet
Total Assets	2.11T	2.10T	2.09T	1.93T	1.77T	1.54T
Cash, Cash Equivalents and Short-Term Investments	711.60B	685.55B	511.29B	623.50B	697.05B	640.55B
Total Debt	5.00B	5.04B	13.07B	12.19B	11.54B	10.79B
Total Liabilities	187.82B	172.46B	208.69B	225.62B	210.68B	159.88B
Stockholders Equity	1.92T	1.93T	1.88T	1.70T	1.56T	1.38T
Cash Flow
Free Cash Flow	0.00	89.92B	-6.10B	27.24B	75.16B	91.18B
Operating Cash Flow	0.00	196.66B	98.21B	101.62B	156.09B	120.47B
Investing Cash Flow	0.00	35.23B	-131.90B	-87.09B	-116.22B	73.44B
Financing Cash Flow	0.00	-100.20B	-87.93B	-113.30B	-88.93B	-56.01B

SMC (OR) Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 64320.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6273, the sentiment is Positive. The current price of 64320 is above the 20-day moving average (MA) of 56536.50, above the 50-day MA of 55488.80, and above the 200-day MA of 50697.73, indicating a bullish trend. The MACD of 2059.05 indicates Negative momentum. The RSI at 77.97 is Negative, neither overbought nor oversold. The STOCH value of 97.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6273.

SMC (OR) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6845	76 Outperform	¥774.84B	17.38	―	1.81%	-1.44%	50.86%
6954	74 Outperform	¥6.41T	41.10	―	1.72%	4.10%	14.54%
6594	73 Outperform	¥2.46T	19.95	6.88%	0.97%	5.35%	26.51%
6273	72 Outperform	¥4.01T	25.93	7.96%	1.86%	2.43%	-1.86%
6383	72 Outperform	¥2.03T	29.07	16.30%	1.30%	―	―
6361	71 Outperform	¥2.15T	28.66	16.00%	1.38%	13.96%	12.97%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

SMC (OR) Corporate Events

SMC Corporation Completes Share Repurchase Program

SMC Corporation announced the completion of its share repurchase program, which was resolved by the Board of Directors on May 14, 2025. The company repurchased 7,700 common shares for a total of 428,478,000 yen between December 1 and December 3, 2025, as part of a larger plan to repurchase up to 750,000 shares. This move is likely to impact the company’s market positioning by potentially increasing shareholder value and optimizing capital structure.

The most recent analyst rating on (JP:6273) stock is a Buy with a Yen74000.00 price target. To see the full list of analyst forecasts on SMC (OR) stock, see the JP:6273 Stock Forecast page.