THK Co (6481) AI Stock Analysis

• Market Cap: ¥624.74B
• Dividend Yield: 6.16%
• Average Volume (3M): 771.40K
• Price to Earnings (P/E): 97.8
• Beta (1Y): 0.90
• Revenue Growth: 1.98%
• EPS Growth: -48.28%
• Country: JP
• Employees: 13,268
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): -665.04
• Shares Outstanding: 119,099,800
• 10 Day Avg. Volume: 838,710
• 30 Day Avg. Volume: 771,403
• PEG Ratio: <0.01
• Price to Book (P/B): 1.73
• Price to Sales (P/S): 1.88
• P/FCF Ratio: 18.98
• 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): 186.59
• Revenue Forecast (FY): ¥312.02B

• Rating: 55 Neutral
• Price Target: ¥5,778.00 ▲(42.42% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is held back primarily by weakened financial performance, driven by the steep revenue drop and large net loss in 2025. Supporting the rating are improving cash generation (solid positive free cash flow) and constructive technical momentum (price above key moving averages with positive MACD). Valuation is a secondary drag due to the very high P/E, partially offset by the strong dividend yield.

Positive Factors

Design-in recurring demand

THK's core business of LM guides, ball screws and actuators is largely design‑in driven, creating recurring aftermarket and replacement demand. That product stickiness supports stable baseline revenues over multiple capex cycles and raises customer switching costs, bolstering long‑term revenue durability.

Solid free cash flow generation

A rebound to positive free cash flow (~23.9B) and stronger operating cash flow enhances liquidity and funds operations, capex and dividends without relying solely on external financing. Durable FCF provides a buffer to manage cyclical demand swings and supports strategic investments over the medium term.

Moderate leverage providing flexibility

Leverage remains moderate for an industrial machinery maker, with debt below equity. This financial headroom supports borrowing capacity for strategic investments or smoothing cycles. Even after equity erosion, the capital structure retains flexibility to refinance or fund recovery without immediate distress.

Negative Factors

Sharp revenue decline and net loss

A precipitous revenue drop and a large net loss signal material demand deterioration and hit profitability. Such a swing undermines margins, compresses retained earnings, and can force cost cuts or deferment of investments; recovery may require sustained end‑market improvement, making near‑term earnings unpredictable.

Material equity erosion and negative ROE

A sharp drop in equity and a deeply negative ROE reduce the firm's capital buffer and constrain strategic flexibility. Lower equity weakens credit metrics, may increase borrowing costs, and limits capacity for M&A or capex without dilutive financing, hindering long‑term growth options.

Cash flow quality and coverage weakness

Although FCF is positive, reliance on working‑capital movements and non‑cash items makes cash generation less predictable. In a cyclical industrial business, reversals in receivables or inventory could quickly erode cash flow, exposing liquidity risk and challenging consistent funding for operations and investment.

THK Co Business Overview & Revenue Model

Company Description

THK Co., Ltd. manufactures and supplies machine components in Japan, the Americas, Europe, China, and internationally. The company provides linear motion (LM) guides, ball screws, ball splines, LM guide actuators, cross roller rings and tables, electric actuators and linear motor actuators, cam followers, roller followers, linear bushes, slide packs, slide rails, cross roller guides, linear ball slides, LM and flat rollers, spline nuts, LM strokes, screw nuts, change nuts, precision linear packs, link balls, rod ends, spherical plain bearings, lubrication accessories, and seismic isolation products. Its products are used in various applications, including machine tools, general industrial machinery, precision instruments, semiconductor and LCD manufacturing equipment, industrial robots, electronic devices, and transport systems, as well as in construction, aerospace, medical and assistive, and other manufacturing industries. The company was incorporated in 1946 and is headquartered in Tokyo, Japan.

How the Company Makes Money

THK Co. generates revenue primarily through the sale of its linear motion products, which are essential in various industrial applications. The company's revenue model is built on direct sales to manufacturers and businesses in need of precision motion solutions. Key revenue streams include the sale of linear guides, ball screws, and actuators, which are often sold as standard or customized solutions to meet specific client needs. Additionally, THK engages in providing maintenance and technical support services for its products, contributing to recurring revenue. The company has established significant partnerships with major industrial players, enhancing its market presence and driving sales through collaborations in product development and distribution.

THK Co Financial Statement Overview

Summary

Overall financials are pressured by a sharp 2025 revenue decline (-32.4%) and a swing to a large net loss (net margin ~-29.1%), which also drove a meaningful equity drop. Offsetting this, cash flow improved materially with solid positive free cash flow (~23.9B), supporting near-term resilience despite weaker profitability.

Income Statement

Profitability and growth have weakened meaningfully in the most recent year. Revenue fell sharply in 2025 (-32.4%), and the company swung from a modest profit in 2024 (net margin ~3.0%) to a large net loss in 2025 (net margin ~-29.1%). While gross profit and operating profitability held up better than net income (gross margin ~29.3%, EBIT margin ~6.7%), the magnitude of the net loss and the abrupt demand/volume decline point to elevated earnings volatility versus prior years (2021–2023 were consistently profitable).

Balance Sheet

Leverage looks moderate overall, but it deteriorated in the latest period. Debt remains below equity (debt-to-equity ~0.47 in 2025 vs ~0.25 in 2024), which provides some balance-sheet flexibility, yet equity declined materially year over year (2025 equity ~261B vs 2024 ~384B) alongside the net loss. Returns to shareholders turned sharply negative in 2025 (return on equity ~-26.7%), signaling that the balance sheet is currently absorbing earnings pressure despite still-acceptable leverage for an industrial business.

Cash Flow

Cash generation is a relative bright spot: operating cash flow improved in 2025 (~42.7B) and free cash flow turned solidly positive (~23.9B), following weak/negative free cash flow in 2024. That said, cash flow quality is mixed—free cash flow is positive despite a large net loss, and operating cash flow remains a modest share of sales (coverage ratio ~0.43), implying working-capital or non-cash items are playing a meaningful role. Still, the rebound in free cash flow supports liquidity and financial resilience near term.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	240.44B	352.76B	351.94B	393.69B	318.19B
Gross Profit	70.50B	81.78B	81.63B	105.29B	79.75B
EBITDA	40.45B	41.27B	44.85B	56.33B	48.70B
Net Income	-69.89B	10.44B	18.40B	21.20B	23.01B
Balance Sheet
Total Assets	472.99B	567.42B	556.35B	560.30B	516.09B
Cash, Cash Equivalents and Short-Term Investments	110.01B	140.29B	156.49B	163.84B	151.43B
Total Debt	123.20B	96.51B	118.53B	120.88B	112.32B
Total Liabilities	207.24B	177.62B	193.45B	223.02B	201.80B
Stockholders Equity	261.33B	383.64B	357.26B	331.89B	304.56B
Cash Flow
Free Cash Flow	23.85B	-1.15B	12.29B	8.15B	-3.60B
Operating Cash Flow	42.75B	28.41B	39.33B	37.56B	15.64B
Investing Cash Flow	-19.80B	-34.22B	-27.09B	-30.08B	-19.13B
Financing Cash Flow	-42.05B	-22.65B	-24.27B	-3.65B	-12.72B

THK Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4057.00
• 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:6481, the sentiment is Positive. The current price of 4057 is below the 20-day moving average (MA) of 5016.50, below the 50-day MA of 4501.73, and above the 200-day MA of 4040.65, indicating a bullish trend. The MACD of 241.45 indicates Negative momentum. The RSI at 74.47 is Negative, neither overbought nor oversold. The STOCH value of 94.60 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6481.

THK Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6371	81 Outperform	¥277.17B	11.68	8.83%	3.85%	1.48%	8.86%
6407	75 Outperform	¥375.21B	28.83	―	2.50%	6.16%	17.11%
6622	73 Outperform	¥331.00B	25.60	―	1.65%	14.49%	-21.17%
6268	71 Outperform	¥591.54B	38.64	5.25%	2.13%	-2.23%	130.96%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6324	58 Neutral	¥450.99B	94.05	5.62%	0.56%	6.22%	―
6481	55 Neutral	¥624.74B	97.83	1.88%	6.16%	1.98%	-48.28%

THK Co Corporate Events

THK to Switch Long-Standing Auditor to KPMG AZSA for Fresh Global Perspective

THK Co., Ltd. has decided to replace its long-standing accounting auditor, Grant Thornton Taiyo LLC, with KPMG AZSA LLC, pending approval at its 56th general shareholders meeting scheduled for March 20, 2026. The change, following an engagement that began in 2006, is intended to introduce a fresh audit perspective and leverage KPMG AZSA’s global audit capabilities, independence, expertise, and quality control systems.

The Audit and Supervisory Committee determined that Grant Thornton Taiyo had maintained an adequate audit framework and reported no issues in recent audit opinions, but nonetheless sought proposals from multiple firms due to the long tenure. Both the retiring auditor and the Audit and Supervisory Committee expressed no objections to the transition, signaling a smooth handover that could strengthen THK’s governance and enhance confidence among investors and other stakeholders.

The most recent analyst rating on (JP:6481) stock is a Hold with a Yen4842.00 price target. To see the full list of analyst forecasts on THK Co stock, see the JP:6481 Stock Forecast page.

THK Launches Special Career Support Program to Drive Organizational Renewal

THK has approved a Special Measures for the Next Career Support Program aimed at helping eligible employees pursue new opportunities outside the company while advancing its PMVV-based growth strategy. By promoting autonomous career development, generational succession, and organizational renewal, the company seeks to build a more flexible and robust corporate foundation across the THK Group.

The program targets up to 120 employees meeting specific age and service conditions, excluding most manufacturing staff, with applications accepted from mid-March to mid-April 2026 and retirement effective May 31, 2026. Participants will receive additional retirement allowances and reemployment support, and related costs will be booked in the 2026 fiscal year, with the estimated impact already incorporated into THK’s latest consolidated earnings forecast.

The most recent analyst rating on (JP:6481) stock is a Hold with a Yen5270.00 price target. To see the full list of analyst forecasts on THK Co stock, see the JP:6481 Stock Forecast page.

THK Swings to Deep Loss as Automotive Business Exit Drives Gap With Forecasts

THK Co., Ltd. reported significant deviations between its earlier forecasts and actual results for the year ended December 31, 2025, largely due to the reclassification and liquidation of its automotive and transportation business. While revenue, operating income, and profit before tax from continuing operations were below consolidated forecasts, the company booked a large consolidated net loss attributable to owners of the parent, driven by an ¥81.6 billion loss on business liquidation tied to the discontinued segment.

On a non-consolidated basis, THK’s revenue and operating income slightly exceeded expectations, helped by a weaker-than-anticipated yen and higher dividends from subsidiaries, and ordinary income also came in above forecast. However, non-consolidated net results swung sharply into loss after the company recorded sizeable charges for impairment of investments in affiliates and provisions for business liquidation related to the automotive and transportation unit, underscoring the financial impact of the strategic exit on shareholders and future earnings profiles.

The most recent analyst rating on (JP:6481) stock is a Hold with a Yen5270.00 price target. To see the full list of analyst forecasts on THK Co stock, see the JP:6481 Stock Forecast page.

THK Swings to Net Loss on Business Reclassification but Signals 2026 Profit Rebound

THK Co., Ltd. reported 2025 revenue of ¥240.4 billion from continuing operations, up 7.9% year on year, but operating income fell 9.3% to ¥14.4 billion and profit before tax declined 11.9% to ¥15.7 billion. A reclassification of the automotive and transportation business as a discontinued operation, combined with other factors, resulted in a sharp swing to a net loss attributable to owners of the parent of ¥69.9 billion and a drop in equity attributable to owners to ¥261.3 billion, or ¥2,332.92 per share.

Despite the loss, operating cash flow improved to ¥42.7 billion and the company maintained a strong cash position of ¥120.5 billion at year-end, while significantly increasing annual dividends to ¥246 per share, implying an aggressive payout aligned with its dividend-on-equity policy. For 2026, THK forecasts a recovery in profitability from continuing operations, guiding for ¥260 billion in revenue and a substantial rise in operating income to ¥26 billion, signaling management’s expectation of a rebound in core businesses and a more normalized earnings profile after the portfolio shift.

The most recent analyst rating on (JP:6481) stock is a Hold with a Yen5270.00 price target. To see the full list of analyst forecasts on THK Co stock, see the JP:6481 Stock Forecast page.

THK Finalizes Sale of Automotive Subsidiaries, Corrects Currency in Disclosure

THK has corrected currency unit notations in a recent English disclosure related to the transfer of shares in several consolidated automotive subsidiaries and the assignment of associated receivables, clarifying that financial data for its Czech unit is in thousands of Czech koruna and for its Michigan unit in thousands of U.S. dollars rather than euros. At the same time, the company confirmed its board has approved the sale of all shares in TRA Holdings and its key THK RHYTHM automotive subsidiaries, along with related loans, to a special purpose company backed by funds serviced by Advantage Partners, a move aligned with THK’s strategy to boost ROE above 10% by tightening control of shareholders’ equity and completing the selection and concentration of its automotive and transportation business portfolio.

The most recent analyst rating on (JP:6481) stock is a Hold with a Yen5044.00 price target. To see the full list of analyst forecasts on THK Co stock, see the JP:6481 Stock Forecast page.

THK to Divest Automotive Subsidiaries to Boost Capital Efficiency and ROE

THK has decided to transfer all shares in several automotive-focused consolidated subsidiaries—including TRA Holdings and multiple THK RHYTHM entities in North America, Europe, and Asia—as well as all related loans receivable to a special purpose company backed by funds serviced by Advantage Partners. The move, approved by the board on February 2, 2026, is positioned as the culmination of THK’s selection-and-concentration strategy in its automotive & transportation business, reflecting a detailed review of cost of capital and return on invested capital and aimed at improving ROE and tightening control over shareholders’ equity, with significant implications for the company’s portfolio mix and future capital efficiency.

The most recent analyst rating on (JP:6481) stock is a Hold with a Yen5044.00 price target. To see the full list of analyst forecasts on THK Co stock, see the JP:6481 Stock Forecast page.