Nippon Gear Co., Ltd. (6356) AI Stock Analysis

• Market Cap: ¥12.42B
• Dividend Yield: 0.92%
• Average Volume (3M): 116.20K
• Price to Earnings (P/E): 8.4
• Beta (1Y): 1.17
• Revenue Growth: -1.79%
• EPS Growth: -8.54%
• Country: JP
• Employees: 393
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 20.11
• Shares Outstanding: 14,280,000
• 10 Day Avg. Volume: 161,780
• 30 Day Avg. Volume: 116,203
• PEG Ratio: 6.22
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.72
• P/FCF Ratio: 8.63
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 81 Outperform
• Price Target: ¥1,027.00 ▲(17.78% Upside)

Nippon Gear Co., Ltd. receives a strong overall stock score due to its robust financial performance and attractive valuation. The company's solid growth metrics and low P/E ratio are significant strengths. Technical indicators support a bullish outlook, although caution is advised due to potential overbought conditions.

Positive Factors

Cash Generation Ability

Nippon Gear's strong cash generation ability indicates effective capital management, supporting long-term investments and operational stability.

Balance Sheet Health

A strong balance sheet with low leverage enhances financial stability, allowing Nippon Gear to withstand economic fluctuations and invest in growth.

Operating Performance

Robust operating margins reflect Nippon Gear's efficiency in managing costs and generating profits, supporting sustainable growth and competitiveness.

Negative Factors

Revenue Growth Trends

Negative revenue growth indicates potential challenges in market demand or competitive pressures, which could impact long-term growth prospects.

EPS Growth

Declining EPS growth suggests profitability challenges, potentially affecting investor confidence and the ability to reinvest in the business.

Return on Equity

Lower return on equity indicates inefficiencies in generating returns from shareholder investments, which may hinder long-term shareholder value creation.

Nippon Gear Co., Ltd. Business Overview & Revenue Model

Company Description

Nippon Gear Co., Ltd. designs, produces, and sells valve actuators, screw jacks, gear drives, and gears in Japan and internationally. The company offers valve actuators for a range of applications in petroleum, nuclear, generating plants, and water/sewer pipelines; jacks for use in lifting/lowering, inclines, pulling, opening/closing, adjustment, and holding; gear drives for power plant, chemical plant, waste water treatment plant, and other applications; and gears for automotive, railroad, industrial machine, and other industries. It also provides equipment for communication, control, and detection, including control equipment and control systems, sensor control, and condition monitoring systems. In addition, the company constructs and installs machine instruments; and designs, supervises, operates, and installs electric works. Nippon Gear Co., Ltd. was founded in 1938 and is headquartered in Fujisawa, Japan.

How the Company Makes Money

Nippon Gear Co., Ltd. generates revenue through the production and sale of its core products, which include precision gears and mechanical components used in various applications, such as industrial machinery and automotive systems. The company operates on a business-to-business (B2B) model, supplying their products to manufacturers and industries that require high-quality mechanical solutions. Key revenue streams include direct sales of gear products, custom manufacturing services, and long-term contracts with major industrial clients. Additionally, Nippon Gear may benefit from strategic partnerships with other manufacturers and technology firms, which can enhance its market reach and drive additional sales through collaborative projects or joint ventures. The company also focuses on research and development to innovate and improve its product offerings, which in turn helps maintain competitiveness and customer loyalty.

Nippon Gear Co., Ltd. Financial Statement Overview

Summary

Nippon Gear Co., Ltd. exhibits solid financial health with strong revenue growth, healthy profit margins, and efficient cash flow management. The balance sheet is stable with low leverage, although return on equity could be improved.

Income Statement

Nippon Gear Co., Ltd. has shown a strong revenue growth trend over the years, marking a significant increase from 2023 to 2024. The company maintains a healthy gross profit margin, and its net profit margin has improved, reflecting effective cost control and operational efficiency. EBIT and EBITDA margins are robust, suggesting strong operating performance.

Balance Sheet

The balance sheet is strong, with a low debt-to-equity ratio indicating conservative leverage. The equity ratio is high, demonstrating stability with significant stockholders' equity relative to total assets. However, the company's return on equity could be more robust, pointing to potential areas for enhancing shareholder returns.

Cash Flow

Cash flow analysis shows a positive trend, with strong operating cash flow relative to net income, indicating good cash generation capabilities. The free cash flow growth rate is impressive, signaling effective management of capital expenditures and operational efficiency. The company’s ability to convert earnings into free cash flow is commendable.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.20B	9.56B	9.62B	7.52B	7.57B	7.72B
Gross Profit	4.23B	4.27B	4.43B	3.14B	2.27B	2.23B
EBITDA	2.10B	2.52B	2.37B	1.20B	683.82M	707.07M
Net Income	1.31B	1.55B	1.54B	685.13M	295.83M	312.53M
Balance Sheet
Total Assets	14.10B	15.23B	14.68B	12.72B	11.37B	11.34B
Cash, Cash Equivalents and Short-Term Investments	4.64B	4.80B	4.48B	4.30B	3.53B	2.95B
Total Debt	402.97M	109.80M	366.46M	511.92M	658.37M	726.48M
Total Liabilities	3.52B	2.67B	3.58B	3.28B	2.57B	2.79B
Stockholders Equity	10.58B	12.56B	11.10B	9.44B	8.79B	8.55B
Cash Flow
Free Cash Flow	370.63M	795.46M	421.68M	977.46M	706.17M	590.73M
Operating Cash Flow	370.63M	1.29B	748.94M	1.27B	803.87M	721.47M
Investing Cash Flow	0.00	-884.92M	-331.61M	-297.71M	-100.26M	-169.18M
Financing Cash Flow	0.00	-384.31M	-245.05M	-201.18M	-125.11M	-274.49M

Nippon Gear Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 872.00
• 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:6356, the sentiment is Positive. The current price of 872 is above the 20-day moving average (MA) of 857.35, above the 50-day MA of 829.94, and above the 200-day MA of 637.34, indicating a bullish trend. The MACD of 10.12 indicates Negative momentum. The RSI at 55.13 is Neutral, neither overbought nor oversold. The STOCH value of 87.64 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6356.

Nippon Gear Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6356	81 Outperform	¥12.42B	8.39	―	0.92%	-1.79%	-8.54%
7235	78 Outperform	¥14.25B	7.51	―	4.02%	2.31%	10.68%
7264	70 Outperform	¥7.78B	37.94	―	3.54%	-0.72%	-72.70%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7291	60 Neutral	¥7.86B	20.74	―	4.24%	-7.88%	-73.98%
7297	57 Neutral	¥6.25B	-10.33	―	3.44%	-7.72%	-311.30%
7277	56 Neutral	¥11.47B	33.40	―	2.23%	-4.06%	―