Inspec Inc. (6656) AI Stock Analysis

• Market Cap: ¥3.07B
• Dividend Yield: N/A
• Average Volume (3M): 18.14K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.07
• Revenue Growth: -36.20%
• EPS Growth: -1972.83%
• Country: JP
• Employees: 84
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -36.35
• Shares Outstanding: 4,012,800
• 10 Day Avg. Volume: 12,560
• 30 Day Avg. Volume: 18,143
• PEG Ratio: 0.28
• Price to Book (P/B): 2.45
• Price to Sales (P/S): 1.05
• P/FCF Ratio: 4.91
• 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: 54 Neutral
• Price Target: ¥780.00 ▲(33.56% Upside)

The score is held back mainly by weak profitability and elevated leverage despite improving cash flow. Technicals are supportive with strong trend strength versus moving averages, but momentum appears overheated (high RSI). Valuation is a drag due to negative earnings (negative P/E) and no dividend yield data.

Positive Factors

Recurring revenue from service contracts and subscriptions

Inspec’s mix of product sales plus subscription software, maintenance and training contracts creates recurring revenue streams. This supports revenue visibility, customer stickiness and lifecycle upsell potential, enabling steadier cashflows and long-term client relationships.

Strong gross margin

A 40%+ gross margin signals strong product value, pricing power or differentiated technology in inspection systems. Durable gross margins provide capacity to absorb SG&A, fund R&D and invest in automation, supporting long-term competitiveness even if operating costs fluctuate.

Improving free cash flow generation

Substantial FCF growth and a high FCF-to-net-income ratio indicate the business is converting earnings into cash efficiently. Sustainable cash generation strengthens liquidity, funds capex and deleveraging, and enables reinvestment or strategic initiatives without reliance on external financing.

Negative Factors

Negative profitability metrics

Negative operating and net margins point to structural profitability challenges: either elevated overhead, pricing pressure, or inefficient operating model. Persisting losses undermine retained earnings, limit reinvestment capacity, and require durable margin improvement to sustain growth.

Elevated leverage

A debt-to-equity of 1.75 implies significant leverage that constrains financial flexibility. High debt increases interest burden, limits ability to fund strategic investments, and raises refinancing and covenant risk in downturns, reducing resilience over a multi‑quarter horizon.

Volatile top-line growth

A marked negative revenue growth metric indicates revenue volatility or recent contraction, which undermines predictability for planning and investment. Structural revenue instability complicates margin recovery and suggests dependence on cyclical customers or uneven order cadence.

Inspec Inc. Business Overview & Revenue Model

Company Description

inspec Inc. engages in the research, development, manufacture, and sale of visual inspection and measurement equipment, software, and other equipment for the automatic visual inspection of semiconductor and various IT-related devices. The company's products are used for the inspection and verification of semiconductor package boards, precision printed boards, glass mask and film substrates, high density boards, rectangles, LED boards and frames, flexible boards, and TAB tapes. It also offers offline teaching and verification software products; and verification equipment, inspection devices, and inline inspection modules, as well as periodic maintenance and calibration, and operational support services. The company was formerly known as Taiyo Mfg.Co.,Ltd. and changed its name to inspec Inc. in January 2001. inspec Inc. was founded in 1984 and is headquartered in Senboku, Japan.

How the Company Makes Money

Inspec Inc. generates revenue primarily through the sale of inspection equipment and systems, as well as service contracts for maintenance and support. Key revenue streams include direct product sales, subscription fees for software solutions, and consulting services related to quality assurance processes. The company has established significant partnerships with major manufacturers and industry leaders, allowing it to expand its market reach and enhance its product offerings. Additionally, Inspec Inc. benefits from recurring revenue through ongoing service agreements and training programs, which provide a steady income stream while fostering long-term relationships with clients.

Inspec Inc. Financial Statement Overview

Summary

Mixed fundamentals: revenue grew 5.02% and free cash flow growth was strong (52.56%), but profitability is weak with a -6.36% net margin and -4.29% EBIT margin. Leverage is elevated (debt-to-equity 1.75) and ROE is negative (-14.84%).

Income Statement

Inspec Inc. shows a mixed performance in its income statement. The company has experienced revenue growth of 5.02% in the latest year, indicating a positive trend. However, the net profit margin is negative at -6.36%, reflecting ongoing profitability challenges. The gross profit margin of 40.43% is strong, but the negative EBIT margin of -4.29% highlights operational inefficiencies. Overall, while revenue is growing, profitability remains a concern.

Balance Sheet

The balance sheet of Inspec Inc. presents a moderate risk profile. The debt-to-equity ratio is high at 1.75, indicating significant leverage, which could pose financial risks. The return on equity is negative at -14.84%, suggesting that the company is not generating sufficient returns on shareholders' equity. However, the equity ratio of 31.95% provides some stability, showing a reasonable proportion of equity financing.

Cash Flow

Inspec Inc.'s cash flow statement shows improvement, with a substantial free cash flow growth rate of 52.56%. The operating cash flow to net income ratio is 0.38, indicating that operating cash flows are covering net income to some extent. The free cash flow to net income ratio is high at 87.73%, suggesting that the company is generating significant free cash flow relative to its net income, which is a positive sign for liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.13B	2.24B	1.67B	2.29B	1.76B	1.27B
Gross Profit	801.50M	904.69M	596.71M	845.81M	662.68M	457.16M
EBITDA	172.30M	30.48M	-258.07M	229.42M	236.61M	-1.13B
Net Income	-26.45M	-142.27M	-353.83M	78.84M	155.40M	-1.20B
Balance Sheet
Total Assets	3.44B	3.00B	3.76B	3.98B	3.28B	2.70B
Cash, Cash Equivalents and Short-Term Investments	573.37M	540.33M	738.59M	605.14M	696.78M	781.18M
Total Debt	2.11B	1.67B	2.34B	2.20B	1.77B	1.35B
Total Liabilities	2.39B	2.04B	2.68B	2.57B	2.19B	1.80B
Stockholders Equity	1.05B	958.56M	1.08B	1.41B	1.09B	904.25M
Cash Flow
Free Cash Flow	312.81M	477.22M	905.00K	-722.67M	-475.51M	-300.24M
Operating Cash Flow	312.81M	543.97M	102.82M	-589.11M	-175.68M	-153.72M
Investing Cash Flow	0.00	-66.75M	-77.87M	-163.56M	-329.12M	-174.79M
Financing Cash Flow	0.00	-675.48M	132.40M	630.92M	390.73M	-36.61M

Inspec Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 584.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6656, the sentiment is Positive. The current price of 584 is below the 20-day moving average (MA) of 602.25, below the 50-day MA of 586.00, and below the 200-day MA of 645.77, indicating a bullish trend. The MACD of 23.72 indicates Negative momentum. The RSI at 74.11 is Negative, neither overbought nor oversold. The STOCH value of 72.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6656.

Inspec Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6627	74 Outperform	¥67.32B	21.65	―	1.85%	3.60%	-17.45%
6337	70 Outperform	¥16.12B	53.42	―	3.47%	-14.79%	-41.15%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6656	54 Neutral	¥3.07B	-8.32	―	―	-36.20%	-1972.83%
6613	54 Neutral	¥18.96B	-62.03	―	―	18.18%	56.08%
6614	46 Neutral	¥3.34B	-40.34	―	2.25%	-2.80%	-129.64%
6616	45 Neutral	¥16.14B	-8.04	―	3.98%	-6.84%	50.71%