Nakakita Seisakusho Co., Ltd. (6496) AI Stock Analysis

• Market Cap: ¥27.39B
• Dividend Yield: 1.82%
• Average Volume (3M): 22.55K
• Price to Earnings (P/E): 11.6
• Beta (1Y): 1.08
• Revenue Growth: 34.70%
• EPS Growth: -8.44%
• Country: JP
• Employees: 378
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 129.11
• Shares Outstanding: 3,832,800
• 10 Day Avg. Volume: 13,550
• 30 Day Avg. Volume: 22,546
• PEG Ratio: 0.11
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 0.55
• P/FCF Ratio: -3.84
• 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: 69 Neutral
• Price Target: ¥8,399.00 ▲(46.32% Upside)
• Action: Downgraded Date: 01/08/26
• Date: Action: Downgraded 01/08/26

The score is driven primarily by strong financial health and profitability with very low leverage, tempered by negative operating/free cash flow. Technicals are supportive via trend and MACD but look overextended (high RSI/Stoch). Valuation appears reasonable with a modest dividend yield.

Positive Factors

Revenue Growth

15.82% reported revenue growth reflects expanding demand and effective sales execution across new installations and aftermarket. Sustained top-line growth improves capacity utilization, enables economies of scale, and provides a foundation for reinvestment and margin expansion over the coming months.

Balance Sheet Strength

Very low leverage (D/E 0.12) and a high equity ratio (69.84%) give the company strong financial flexibility. This reduces refinancing risk, supports creditworthiness, and allows the firm to fund capex, sustain operations or pursue opportunistic investments during industry cycles.

Profitability Margins

Gross margin of 17.36% and net margin of 7.28% indicate durable pricing power and operational efficiency in valve manufacturing. These margins support internal reinvestment in product quality and service capability, underpinning competitive positioning across medium-term industry cycles.

Negative Factors

Weak Cash Generation

Negative operating and free cash flow despite reported profits signal weak cash conversion. That can strain working-capital needs, force reliance on external funding for normal operations or investments, and constrain strategic flexibility even with low balance-sheet leverage.

Reliance on Non-Op Cash

A free cash flow to net income ratio of 1.34 suggests material non-operational or timing items affecting reported cash generation. Dependence on such items reduces predictability of recurring cash available for capex, dividends, or debt service and weakens earnings quality.

Demand Cyclicality

Revenue and earnings are tied to customer capital expenditure and maintenance cycles, creating lumpy orders and visibility gaps. This cyclical exposure can produce short-to-medium term swings in utilization and margins, complicating planning and cash-flow stability.

Nakakita Seisakusho Co., Ltd. Business Overview & Revenue Model

Company Description

Nakakita Seisakusho Co., Ltd. designs, produces, and sells automatic control valves, butterfly valves, and remote control systems. Its control/shut-off valves include self operated type regulating, auxiliary power operated type control, remotely operated, cylinder, and safety valves, as well as pneumatic operated automatic controllers, pneumatic operated actuators, and nuclear power plant valves; and butterfly valves comprise manually operated, remote-control, and cryogenic type butterfly valves. The company also engages in the installation of pressure reducing and desuperheater other automatic control valves, and equipment. In addition, it offers valve remote control systems for cargo and ballast line and level gauging systems; and various systems for ship engines, such as fuel oil heating, fresh water cooling, and lubricating oil cooling systems; and automatic control values for use in gas turbine power plants. The company's products are also used in power plants, steel works, desalination plants, etc. Nakakita Seisakusho Co., Ltd. was founded in 1930 and is headquartered in Daito, Japan.

How the Company Makes Money

Nakakita Seisakusho makes money primarily by selling industrial valves and related flow-control products to operators and engineering contractors that build, upgrade, and maintain industrial plants. Revenue is generated from (1) product sales of valves and associated components for new installations and retrofit projects, where customers procure equipment as part of capital expenditure and plant construction/expansion work, and (2) aftermarket demand tied to installed equipment, such as replacement units/parts and maintenance-related needs that arise from periodic overhauls and reliability requirements in process industries. Earnings are influenced by the volume and timing of customer capital investment in industrial facilities and the ongoing maintenance cycle of installed valves. Specific details on product-line revenue mix, named customer/partner concentration, or segment breakdown are null.

Nakakita Seisakusho Co., Ltd. Financial Statement Overview

Summary

Strong revenue growth (15.82%) and solid profitability (gross margin 17.36%, net margin 7.28%) are supported by a very healthy balance sheet (debt-to-equity 0.12, equity ratio 69.84%). The main offset is weak cash generation, with negative operating cash flow and free cash flow, raising liquidity/quality-of-earnings risk.

Income Statement

Nakakita Seisakusho Co., Ltd. has shown strong revenue growth of 15.82% in the latest year, indicating a positive trajectory. The gross profit margin of 17.36% and net profit margin of 7.28% reflect solid profitability. However, the slight decline in EBIT margin to 10.23% suggests some operational challenges.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.12, indicating low leverage and financial stability. The return on equity of 6.80% shows efficient use of equity, though there is room for improvement. The equity ratio of 69.84% underscores a strong equity base.

Cash Flow

The cash flow statement reveals challenges, with negative operating cash flow and free cash flow, leading to a concerning free cash flow growth rate. The free cash flow to net income ratio of 1.34 indicates reliance on non-operational cash flows, highlighting potential liquidity issues.

Breakdown	May 2024	May 2023	May 2022	May 2021	May 2020
Income Statement
Total Revenue	23.77B	18.61B	15.78B	17.16B	17.56B
Gross Profit	4.13B	3.40B	2.93B	2.57B	2.77B
EBITDA	1.44B	1.40B	1.05B	760.98M	1.01B
Net Income	1.73B	1.02B	806.41M	556.52M	673.75M
Balance Sheet
Total Assets	36.45B	32.29B	29.43B	28.15B	27.44B
Cash, Cash Equivalents and Short-Term Investments	5.49B	6.72B	7.13B	8.46B	10.21B
Total Debt	3.08B	1.62B	1.76B	1.20B	1.20B
Total Liabilities	11.00B	7.50B	6.14B	5.69B	5.34B
Stockholders Equity	25.46B	24.79B	23.30B	22.46B	22.10B
Cash Flow
Free Cash Flow	-3.39B	501.89M	-1.98B	113.03M	1.67B
Operating Cash Flow	-2.52B	811.48M	1.63B	609.82M	1.84B
Investing Cash Flow	2.18B	-1.11B	-876.10M	194.55M	-1.02B
Financing Cash Flow	1.02B	-507.44M	313.69M	-357.33M	-502.06M

Nakakita Seisakusho Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5740.00
• 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:6496, the sentiment is Positive. The current price of 5740 is below the 20-day moving average (MA) of 7621.00, below the 50-day MA of 7140.60, and above the 200-day MA of 5649.15, indicating a bullish trend. The MACD of 278.85 indicates Positive momentum. The RSI at 52.81 is Neutral, neither overbought nor oversold. The STOCH value of 55.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6496.

Nakakita Seisakusho Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6492	82 Outperform	¥22.74B	7.97	―	0.72%	6.51%	3.68%
6498	72 Outperform	¥158.78B	13.19	10.28%	2.77%	2.74%	7.86%
6376	70 Outperform	¥141.76B	7.70	8.17%	2.04%	1.48%	58.59%
6363	70 Outperform	¥69.96B	4.09	―	3.09%	6.35%	-34.20%
6496	69 Neutral	¥27.39B	11.58	―	1.82%	34.70%	-8.44%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6495	52 Neutral	¥12.39B	42.22	―	1.65%	3.96%	―