Inspec Inc. (6656) AI Stock Analysis

• Market Cap: ¥2.50B
• Dividend Yield: N/A
• Average Volume (3M): 18.14K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.90
• 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: 55 Neutral
• Price Target: ¥675.00 ▲(15.58% Upside)
• Action: Reiterated Date: 02/03/26
• Date: Action: Reiterated 02/03/26

The score is held back primarily by weak profitability (negative margins) and higher leverage, partially offset by improving cash flow. Technicals are supportive with the stock above major moving averages and positive MACD, but valuation remains constrained by the negative P/E and lack of dividend yield data.

Positive Factors

Gross Margin Strength

A 40.43% gross margin indicates strong product-level economics and pricing power in inspection equipment. That margin provides a durable buffer to fund R&D, service delivery and scale-related costs, improving prospects for long-term operating leverage and sustained profitability.

Free Cash Flow Generation

Substantial FCF growth and high FCF-to-net-income conversion show improving cash conversion. Durable free cash enables reinvestment in product development, service capacity, or debt reduction without dilutive financing, strengthening long-term financial flexibility.

Recurring Revenue & Partnerships

Ongoing service contracts, software subscriptions and industry partnerships create predictable annuity-like revenue and customer stickiness. This structural revenue mix supports retention, upsell potential and more stable cashflows across manufacturing and aerospace cycles.

Negative Factors

Weak Profitability

Negative EBIT and net margins indicate the core business currently fails to cover operating and overhead costs. Without structural cost reduction or a sustained shift to higher-margin services, profitability deficits will limit retained earnings and impede durable earnings improvement.

Elevated Leverage

High leverage combined with negative ROE signals the firm is highly indebted while delivering poor returns on equity. This constrains strategic flexibility, raises refinancing risk, and can force prioritization of debt servicing over R&D or market expansion in adverse cycles.

Revenue & Earnings Volatility

Large negative growth rates point to volatile top-line and earnings performance, likely from uneven project timing or one-offs. Such structural volatility complicates forecasting, budgeting and investor confidence, making sustained strategic planning and resource allocation harder.

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 negative net margin (-6.36%) and negative EBIT margin (-4.29%). Balance sheet leverage is elevated (debt-to-equity 1.75) with negative ROE (-14.84%), offset somewhat by a 31.95% equity ratio.

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	Apr 2024	Apr 2023	Apr 2023	Apr 2022	Apr 2021
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: Negative
• Last Price: 584.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6656, the sentiment is Negative. The current price of 584 is below the 20-day moving average (MA) of 651.80, below the 50-day MA of 611.14, and below the 200-day MA of 652.83, indicating a neutral trend. The MACD of 7.13 indicates Positive momentum. The RSI at 47.00 is Neutral, neither overbought nor oversold. The STOCH value of 35.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6656.

Inspec Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6337	70 Outperform	¥15.23B	52.25	―	3.47%	-14.79%	-41.15%
6627	66 Neutral	¥90.88B	26.44	―	1.85%	3.60%	-17.45%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6614	60 Neutral	¥3.86B	-39.33	―	2.25%	-2.80%	-129.64%
6613	56 Neutral	¥32.53B	-95.45	―	―	18.18%	56.08%
6656	55 Neutral	¥2.50B	-6.78	―	―	-36.20%	-1972.83%
6616	45 Neutral	¥19.11B	-12.61	―	3.98%	-6.84%	50.71%