Nippon Signal Company, Limited (6741) AI Stock Analysis

• Market Cap: ¥74.85B
• Dividend Yield: 3.52%
• Average Volume (3M): 155.90K
• Price to Earnings (P/E): 9.2
• Beta (1Y): 0.64
• Revenue Growth: 7.16%
• EPS Growth: 26.28%
• Country: JP
• Employees: 2,946
• Sector: Industrials
• Sector Strength: 83
• Industry: Railroads
• EPS (TTM): -6.42
• Shares Outstanding: 68,339,710
• 10 Day Avg. Volume: 232,240
• 30 Day Avg. Volume: 155,903
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥1,277.00
• Price Target Upside: 6.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 80 Outperform
• Price Target: ¥1,277.00 ▲(6.06% Upside)

Nippon Signal Company, Limited has an overall strong stock profile, driven by robust financial performance and solid technical indicators. The stock is undervalued, with an attractive P/E ratio and dividend yield, making it appealing for investors. Improvement in cash flow generation could further enhance its financial position.

Nippon Signal Company, Limited Business Overview & Revenue Model

Company Description

Nippon Signal Company, Limited (6741) is a Japanese corporation primarily engaged in the development and production of various signal systems. The company operates in sectors including transportation, industrial, and public infrastructure, with its core products and services encompassing railway signal systems, traffic management systems, and industrial automation solutions. Known for its innovative technologies, Nippon Signal plays a crucial role in the safety and efficiency of transportation networks and industrial operations.

How the Company Makes Money

Nippon Signal Company, Limited generates revenue through the sale and maintenance of its signal systems and related technologies. Key revenue streams include contracts with railway operators and public transportation agencies for the installation and maintenance of railway signal systems. Additionally, the company earns from providing traffic management systems to municipalities and governments for road safety and efficiency. Industrial clients contribute to revenue by purchasing automation solutions that enhance operational productivity. Strategic partnerships with transportation and industrial sector leaders, along with a focus on technological innovation, further bolster the company's earnings.

Nippon Signal Company, Limited Financial Statement Overview

Summary

Nippon Signal Company, Limited demonstrates solid financial health with strong revenue growth and profitability metrics. The balance sheet is robust with low leverage and substantial equity. However, cash flow generation, particularly free cash flow, shows some limitations, which could impact future capital investments or debt service capacity.

Income Statement

Nippon Signal Company, Limited has shown impressive revenue growth over the past few years, with a current revenue growth rate of 8.46%. The gross profit margin for the latest period is 24.02%, indicating effective cost management. Net profit margin is at 7.96%, reflecting solid profitability, though slightly below industry leaders. EBIT and EBITDA margins are strong at 9.27% and 13.49%, respectively, showing robust operational efficiency.

Balance Sheet

The company's balance sheet is healthy with a debt-to-equity ratio of 0.19, indicating low leverage and financial stability. Return on Equity (ROE) is 8.29%, showing efficient use of equity capital. The equity ratio is 61.73%, underscoring a strong equity base and prudent risk management.

Cash Flow

The cash flow statement reveals a decline in free cash flow growth, though the operating cash flow to net income ratio is 0.68, indicating moderate cash generation from operations. The free cash flow to net income ratio is 0.21, suggesting some constraints in free cash flow relative to net income.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	106.86B	98.54B	85.46B	85.05B	92.75B
Gross Profit	25.68B	21.59B	20.05B	19.57B	19.81B
EBITDA	14.41B	10.46B	8.46B	8.80B	9.38B
Net Income	8.50B	5.35B	4.08B	4.50B	4.92B
Balance Sheet
Total Assets	166.24B	165.29B	146.02B	134.09B	141.36B
Cash, Cash Equivalents and Short-Term Investments	11.29B	11.80B	8.41B	6.40B	13.30B
Total Debt	19.21B	18.71B	17.53B	11.95B	16.56B
Total Liabilities	63.61B	68.47B	56.67B	47.35B	56.66B
Stockholders Equity	102.62B	96.82B	89.35B	86.74B	84.69B
Cash Flow
Free Cash Flow	1.81B	2.86B	-904.00M	-199.00M	-1.72B
Operating Cash Flow	5.78B	6.77B	1.72B	2.10B	1.15B
Investing Cash Flow	-4.50B	-2.98B	-3.60B	-2.34B	-1.91B
Financing Cash Flow	-1.60B	-338.00M	3.91B	-6.75B	1.35B

Nippon Signal Company, Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1204.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6741, the sentiment is Positive. The current price of 1204 is above the 20-day moving average (MA) of 1129.30, above the 50-day MA of 1092.16, and above the 200-day MA of 945.97, indicating a bullish trend. The MACD of 35.63 indicates Negative momentum. The RSI at 67.64 is Neutral, neither overbought nor oversold. The STOCH value of 90.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6741.

Nippon Signal Company, Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6741	80 Outperform	¥74.85B	9.24		3.52%	7.16%	26.28%
9044	74 Outperform	¥289.26B	12.37		1.57%	7.02%	-11.48%
9049	70 Outperform	¥13.60B	7.60		0.29%	1.27%	-6.53%
9033	70 Neutral	¥19.52B	13.19		1.23%	6.14%	191.46%
9052	68 Neutral	¥46.11B	12.26		1.71%	2.43%	34.21%
9046	67 Neutral	¥20.25B	16.88		0.79%	-0.12%	10.36%
Sector *	63 Neutral	$10.80B	16.55	6.58%	2.06%	2.37%	-15.86%

Nippon Signal Company, Limited Corporate Events

Nippon Signal Reports Increased Sales but Declining Profits in Q1 2025

Nippon Signal Co., Ltd. reported its consolidated financial results for the three months ending June 30, 2025, showing an 8.5% increase in net sales compared to the previous year. Despite this growth, the company experienced a decline in operating profit and profit attributable to owners, indicating challenges in maintaining profitability. The company also announced the inclusion of six new companies in its consolidation scope, which may impact future financial performance and strategic direction.

Nippon Signal Abolishes Anti-Takeover Measures and Amends Articles of Association

Nippon Signal Co., Ltd. announced the abolition of its Anti-Takeover Measures, which were initially renewed in 2022, following a decision by its Board of Directors. This decision reflects the company’s consideration of shareholder opinions and recent developments in takeover policies. The company plans to amend its Articles of Association to remove provisions related to these measures, ensuring that future large-scale acquisitions will be managed in compliance with relevant laws to protect shareholder interests.

Nippon Signal Announces Increased Year-End Dividends

Nippon Signal Co., Ltd. announced a resolution to distribute year-end dividends, with a record date of March 31, 2025, at 33 yen per share, marking an increase from the previous year. This decision aligns with the company’s strategy to balance growth investments and shareholder returns, aiming for a stable earnings structure and a strong financial position, with a target dividend payout ratio of 30% or higher.

Nippon Signal Reports Strong Financial Performance for FY 2025

Nippon Signal Company, Limited reported a significant increase in its consolidated financial results for the fiscal year ended March 31, 2025, with net sales rising by 8.4% and operating profit increasing by 45.2% compared to the previous year. The company’s strong performance is reflected in its improved capital adequacy ratio and higher dividends, indicating a robust financial position and positive outlook for stakeholders.