KATO WORKS CO., LTD. (6390) AI Stock Analysis

• Market Cap: ¥17.75B
• Dividend Yield: 5.4%
• Average Volume (3M): 62.47K
• Price to Earnings (P/E): 0.5
• Beta (1Y): 1.24
• Revenue Growth: -2.22%
• EPS Growth: 18.80%
• Country: JP
• Employees: 990
• Sector: Industrials
• Sector Strength: 72
• Industry: Agricultural - Machinery
• EPS (TTM): 630.92
• Shares Outstanding: 11,743,587
• 10 Day Avg. Volume: 66,630
• 30 Day Avg. Volume: 62,470
• PEG Ratio: <0.01
• Price to Book (P/B): 0.33
• Price to Sales (P/S): 0.27
• P/FCF Ratio: -1.03
• 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: 51 Neutral
• Price Target: ¥1,523.00 ▲(15.64% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is held back primarily by poor financial performance (net losses and negative operating/free cash flow). Technicals are supportive with strong momentum but are tempered by overbought signals. Valuation helps meaningfully due to the very low P/E and solid dividend yield.

Positive Factors

Stable equity ratio

A stable equity ratio (~43.4%) provides a durable capital buffer to absorb near-term shocks and supports creditor confidence. Over 2-6 months this helps preserve access to working capital, maintain supplier terms and gives management flexibility to execute restructuring or targeted investments without immediate solvency pressure.

Gross profit margin stability

A relatively stable gross margin (~16.2%) indicates the company maintains some cost control or pricing power at the production level. This provides a structural baseline for profitability recovery if volumes stabilize or fixed-costs are better absorbed, supporting medium-term margin improvement efforts.

Manufacturing scale / workforce

A headcount near 1,000 reflects sustained manufacturing, service and engineering capacity. This operational scale is a durable asset: it enables continuous production, aftermarket support and product development, helping the company execute recovery plans and maintain customer relationships over multiple quarters.

Negative Factors

Declining revenues

A TTM revenue decline of about 8% signals weakening demand or market share loss in core machinery segments. Sustained top-line contraction erodes fixed-cost absorption, limits operating leverage and reduces available cash for investment, making a durable recovery more difficult without clear demand restoration.

Negative operating profitability

Persistent negative EBIT/EBITDA and a TTM net loss indicate core operations are unprofitable, which erodes equity and restricts reinvestment. Over the medium term this increases restructuring risk, weakens returns on invested capital and leaves the company dependent on operational turnaround or external funding to restore profitability.

Weak cash generation and leverage

Negative operating and free cash flows combined with near 1.0 debt-to-equity create liquidity and refinancing risk. Poor cash generation constrains capex, working capital and strategic flexibility; with significant leverage the company is more exposed to interest or cyclical shocks over the coming quarters.

KATO WORKS CO., LTD. Business Overview & Revenue Model

Company Description

Kato Works Co.,Ltd. engages in the manufacture and sale of various machines for lifting and construction industries worldwide. It offers mobile cranes, such as rough terrain, all terrain, city range, truck, and crawler cranes; excavators; crawler carriers; earth boring rigs; vacuum suction cleaners; and street and snow sweepers, as well as spare parts. The company sells its products under the KATO brand. Kato Works Co.,Ltd. was founded in 1895 and is headquartered in Tokyo, Japan.

How the Company Makes Money

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KATO WORKS CO., LTD. Financial Statement Overview

Summary

Financials are weak: revenues are declining (TTM down ~8% YoY), profitability has deteriorated to a TTM net loss with negative EBIT/EBITDA margins, and cash flow is stressed with negative operating and free cash flow. Balance sheet leverage is relatively high (debt-to-equity ~0.98) despite a stable equity ratio (~43%).

Income Statement

The company has experienced declining revenues over the years, with the latest TTM showing an 8% drop in revenues compared to the previous year. Gross profit margin has been relatively stable but low at approximately 16.2%. Net profit margin is concerning, with the latest TTM showing a significant net loss, indicating profitability challenges. EBIT and EBITDA margins also reflect negative values, suggesting operational inefficiencies and a lack of profitability.

Balance Sheet

The company's debt-to-equity ratio is high at approximately 0.98, indicating a relatively leveraged position which could pose financial risks. Return on equity is negative due to net losses, suggesting inefficiencies in generating returns for shareholders. However, the equity ratio is fairly stable at around 43.4%, reflecting a reasonable level of equity financing relative to total assets.

Cash Flow

The company is facing significant cash flow challenges, with negative operating cash flows and declining free cash flow over the years, indicating liquidity concerns. Free cash flow to net income ratio is unfavorable due to consistent net losses, highlighting cash generation issues. Operating cash flow to net income ratio is also negative, further emphasizing cash flow inefficiencies.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	54.54B	52.93B	57.50B	57.53B	63.55B	58.52B
Gross Profit	8.14B	8.60B	10.52B	9.10B	6.64B	5.63B
EBITDA	1.46B	-3.76B	4.88B	4.37B	-6.77B	-138.00M
Net Income	-6.29B	-6.03B	4.24B	2.40B	-9.57B	-5.74B
Balance Sheet
Total Assets	97.26B	102.75B	105.33B	98.80B	102.64B	115.82B
Cash, Cash Equivalents and Short-Term Investments	12.48B	14.76B	22.57B	19.98B	18.67B	14.78B
Total Debt	41.54B	43.81B	35.72B	33.21B	38.98B	46.51B
Total Liabilities	54.21B	58.14B	53.78B	51.90B	58.40B	64.33B
Stockholders Equity	43.03B	44.60B	50.41B	45.69B	43.14B	50.51B
Cash Flow
Free Cash Flow	0.00	-14.13B	-1.55B	6.27B	8.31B	-289.00M
Operating Cash Flow	0.00	-13.32B	-696.00M	6.47B	9.55B	2.71B
Investing Cash Flow	0.00	-930.00M	1.63B	1.37B	496.00M	-3.10B
Financing Cash Flow	0.00	6.64B	1.40B	-6.61B	-6.64B	2.99B

KATO WORKS CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1317.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6390, the sentiment is Neutral. The current price of 1317 is below the 20-day moving average (MA) of 1658.80, below the 50-day MA of 1503.68, and below the 200-day MA of 1368.06, indicating a neutral trend. The MACD of 7.17 indicates Positive momentum. The RSI at 43.54 is Neutral, neither overbought nor oversold. The STOCH value of 22.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:6390.

KATO WORKS CO., LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6301	75 Outperform	¥6.22T	12.01	―	4.06%	0.40%	8.40%
6432	73 Outperform	¥305.67B	12.67	―	2.99%	0.31%	-11.04%
6395	70 Outperform	¥161.51B	7.33	9.45%	2.86%	10.49%	-5.19%
6305	67 Neutral	¥1.22T	13.34	9.16%	3.98%	-2.72%	29.43%
6326	65 Neutral	¥2.96T	13.56	7.55%	2.22%	-3.22%	-29.63%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6390	51 Neutral	¥17.75B	0.51	―	5.40%	-2.22%	18.80%

KATO WORKS CO., LTD. Corporate Events

Kato Works Swings to Profit Despite Operating Loss, Keeps ¥70 Dividend Outlook

Kato Works reported consolidated net sales of ¥37.3 billion for the nine months to Dec. 31, 2025, up 1.3% year on year, but swung to an operating loss of ¥1.87 billion and an ordinary loss of ¥1.39 billion. Despite this, profit attributable to owners of the parent rebounded sharply to ¥5.63 billion from a ¥4.83 billion loss a year earlier, aided by non-operating factors and changes in accounting policies.

Total assets fell to ¥96.5 billion while the equity ratio improved to 45.0%, reflecting a leaner balance sheet and continued financial stability. The company maintained its dividend stance, projecting an annual payout of ¥70 per share for the year ending March 31, 2026, and revised its full-year forecast to ¥57.0 billion in sales with a small operating loss but solid bottom-line profit of ¥5.8 billion, signaling ongoing shareholder returns amid earnings volatility.

The most recent analyst rating on (JP:6390) stock is a Hold with a Yen1446.00 price target. To see the full list of analyst forecasts on KATO WORKS CO., LTD. stock, see the JP:6390 Stock Forecast page.