Sato Holdings (6287) AI Stock Analysis

• Market Cap: ¥74.56B
• Dividend Yield: 3.38%
• Average Volume (3M): 86.85K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.80
• Revenue Growth: 4.82%
• EPS Growth: 55.73%
• Country: JP
• Employees: 5,744
• Sector: Industrials
• Sector Strength: 72
• Industry: Communication Equipment
• EPS (TTM): 56.71
• Shares Outstanding: 33,635,940
• 10 Day Avg. Volume: 92,120
• 30 Day Avg. Volume: 86,846
• PEG Ratio: 0.10
• Price to Book (P/B): 0.89
• Price to Sales (P/S): 0.44
• P/FCF Ratio: 10.17
• 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: 73 Outperform
• Price Target: ¥2,407.00 ▲(7.17% Upside)

Sato Holdings' strong financial performance and attractive valuation are the primary strengths, supporting a favorable stock score. However, technical indicators suggest potential bearish momentum, which slightly offsets the positive aspects. The absence of recent earnings call insights or significant corporate events means these factors do not influence the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates robust demand for Sato's products and services, supporting long-term business expansion and market presence.

Balance Sheet Health

A strong balance sheet with low leverage enhances financial stability and provides flexibility for strategic investments and growth opportunities.

Profitability

Improved profitability through better net profit margins suggests effective cost management and operational efficiency, crucial for sustainable growth.

Negative Factors

Free Cash Flow Decline

Declining free cash flow growth could limit Sato's ability to fund new projects and investments, potentially hindering future growth and innovation.

Cash Conversion Efficiency

Suboptimal cash conversion efficiency indicates that Sato may need to enhance its cash management practices to better support operational needs and strategic initiatives.

Net Profit Margin

While improving, the relatively low net profit margin compared to peers may limit competitive positioning and profitability, necessitating further margin enhancement efforts.

Sato Holdings Business Overview & Revenue Model

Company Description

Sato Holdings Corporation (6287) is a leading Japanese company specializing in automatic identification and data capture solutions. The company operates primarily in the manufacturing and distribution of barcodes, RFID systems, and label printing solutions. Sato serves various sectors including retail, logistics, healthcare, and manufacturing, providing products and services that enhance operational efficiency and inventory management.

How the Company Makes Money

Sato Holdings generates revenue through several key streams, primarily from the sale of hardware such as barcode printers, RFID tags, and labeling equipment. Additionally, the company earns income from software solutions that facilitate inventory tracking and data management. Maintenance services and consumables such as labels and ribbons also contribute significantly to their revenue. Sato has established partnerships with various businesses across different sectors, enabling them to integrate their solutions into a wide range of operational frameworks, thereby enhancing customer retention and driving repeat business.

Sato Holdings Financial Statement Overview

Summary

Sato Holdings shows strong revenue growth and stable profitability with a solid balance sheet. The company has effective leverage and equity utilization, but the decline in free cash flow growth poses a potential risk. Continued focus on cash flow management and profitability enhancement will be crucial for sustaining growth.

Income Statement

Sato Holdings demonstrates strong revenue growth with a 10% increase in TTM, supported by stable gross profit margins around 41%. The net profit margin has improved to 4.6% in TTM, indicating enhanced profitability. EBIT and EBITDA margins have also shown positive trends, reflecting operational efficiency. However, the net profit margin remains relatively low compared to industry leaders.

Balance Sheet

The company's balance sheet is solid with a manageable debt-to-equity ratio of 0.25, indicating prudent leverage. Return on equity has improved to 9.5% in TTM, showcasing effective use of equity. The equity ratio remains healthy, suggesting a strong capital structure. However, the slight increase in total debt over the periods warrants monitoring.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 6.6% in TTM, which could impact future investments. The operating cash flow to net income ratio is stable, indicating consistent cash generation relative to earnings. However, the free cash flow to net income ratio of 0.54 suggests room for improvement in cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	154.96B	154.81B	143.45B	142.82B	124.78B	109.05B
Gross Profit	63.20B	63.47B	59.12B	56.69B	50.40B	45.74B
EBITDA	16.61B	17.90B	11.10B	12.52B	10.64B	10.25B
Net Income	7.17B	7.15B	3.56B	4.18B	3.79B	12.96B
Balance Sheet
Total Assets	140.16B	139.76B	132.46B	122.86B	120.00B	109.31B
Cash, Cash Equivalents and Short-Term Investments	26.34B	27.48B	25.08B	21.92B	29.85B	33.04B
Total Debt	18.74B	20.91B	17.65B	15.52B	15.73B	15.35B
Total Liabilities	59.02B	59.52B	58.37B	55.16B	55.50B	49.85B
Stockholders Equity	77.25B	76.55B	71.30B	65.48B	63.16B	58.30B
Cash Flow
Free Cash Flow	6.29B	6.74B	4.84B	-2.07B	-451.00M	1.49B
Operating Cash Flow	11.38B	12.47B	12.56B	5.19B	3.30B	5.81B
Investing Cash Flow	-7.30B	-8.21B	-7.93B	2.29B	-3.74B	-102.00M
Financing Cash Flow	-1.58B	-2.08B	-1.75B	-6.31B	-3.99B	-7.13B

Sato Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2246.00
• 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:6287, the sentiment is Positive. The current price of 2246 is above the 20-day moving average (MA) of 2244.15, above the 50-day MA of 2232.28, and above the 200-day MA of 2104.40, indicating a bullish trend. The MACD of 18.02 indicates Negative momentum. The RSI at 55.65 is Neutral, neither overbought nor oversold. The STOCH value of 81.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6287.

Sato Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6718	81 Outperform	¥45.37B	16.95	―	4.59%	0.63%	-24.87%
6835	80 Outperform	$24.67B	5.50	24.14%	0.85%	6.43%	368.06%
6820	74 Outperform	¥40.09B	17.18	―	2.98%	-0.90%	-13.24%
6287	73 Outperform	¥74.56B	10.30	9.15%	3.38%	4.82%	55.73%
6675	67 Neutral	¥29.32B	9.10	―	2.55%	20.13%	33.43%
6822	64 Neutral	¥4.82B	3.69	―	0.54%	4.93%	23.92%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Sato Holdings Corporate Events

Sato Holdings Reports Mixed Financial Results for Q1 FY2025

Sato Holdings reported a slight increase in net sales for the first quarter of fiscal year 2025, with a 0.4% rise compared to the previous year. However, the company experienced a decline in operating and ordinary income, which fell by 17.6% and 21.8% respectively. Despite these challenges, the company maintained a stable equity ratio and announced a forecasted increase in annual dividends, signaling confidence in future growth. The financial results highlight the company’s resilience in a competitive market, though the decline in income may concern stakeholders.