Foster Electric Company, Limited (6794) AI Stock Analysis

• Market Cap: ¥61.58B
• Dividend Yield: 2.73%
• Average Volume (3M): 212.45K
• Price to Earnings (P/E): 14.9
• Beta (1Y): 1.47
• Revenue Growth: 6.41%
• EPS Growth: 16.71%
• Country: JP
• Employees: 14,094
• Sector: Technology
• Sector Strength: 88
• Industry: Consumer Electronics
• EPS (TTM): 50.71
• Shares Outstanding: 25,000,000
• 10 Day Avg. Volume: 232,410
• 30 Day Avg. Volume: 212,453
• PEG Ratio: 0.11
• Price to Book (P/B): 0.47
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 2.57
• 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: ¥3,030.00 ▲(11.77% Upside)

Overall score reflects stable profitability and a strong, low-debt balance sheet, supported by a constructive technical trend and reasonable valuation with a ~2.71% dividend yield. The key offset is weakened fundamentals from the steep revenue decline and softer free cash flow growth.

Positive Factors

Conservative balance sheet

A very low leverage profile and high equity ratio give Foster durable financial flexibility to fund product development, absorb cyclical demand swings, and support customer program ramp-ups. This conservatism reduces refinancing risk and preserves strategic optionality over months to years.

Stable gross and operating margins

Consistent gross and mid-single-digit operating margins indicate the company maintains manufacturing efficiency and cost control. Sustained margins support reinvestment and competitiveness in component supply, helping preserve profitability as volumes recover or shift across end markets.

OEM-focused manufacturing model

A business model selling components and modules to OEMs embeds Foster in long-term device supply chains. Design-ins and contract manufacturing create recurring program revenue, scale advantages, and technical know-how that support durable customer relationships and renewal potential.

Negative Factors

Sharp revenue decline

A near-30% TTM revenue drop signals weakening shipment volumes or lost programs, which erodes scale economics and can pressure fixed-cost absorption. If persistent, reduced top-line visibility limits reinvestment capacity and threatens long-term supplier status with major OEMs.

Weakened free cash flow growth

Declining free cash flow growth and a sub-1 operating cash to net income ratio indicate cash conversion has weakened. Over several quarters this constrains funding for R&D, capital expenditures, and working capital needs, reducing flexibility to pursue new design-ins or capacity investments.

Modest return on equity and net margin

ROE and net margins in the low single digits imply limited capital efficiency versus peers. In a competitive components market, modest returns reduce internal funding for growth initiatives and may signal difficulty generating superior shareholder returns absent structural improvement in pricing or mix.

Foster Electric Company, Limited Business Overview & Revenue Model

Company Description

Foster Electric Company, Limited engages in the production and sale of loudspeakers, audio equipment, and electronical equipment in Japan and internationally. It operates through three segments: Speaker, Mobile Audio, and Other. The Speaker segment manufactures and distributes speakers and speaker systems for automobiles and flat screen TVs, as well as audio speakers. The Mobile Audio segment engages in the manufacture and distribution of mobile audio products, including headsets for mobile phones, headphones, micro speakers, and vibration actuators. The Other segment manufactures and distributes micro acoustic components, such as electronic buzzers and sounders for applications comprising alarms or warnings; and offers FOSTEX brand products, as well as provides logistics services. In addition, it offers communications, and audio and visual components and products, including micro speakers, portable speaker systems, vibration actuators, earphones, headsets, headphones, and earphone drivers; and micro acoustic transducers that include dynamic speakers, magnetic sounders, and magnetics buzzers. Foster Electric Company, Limited was incorporated in 1948 and is headquartered in Akishima, Japan.

How the Company Makes Money

Foster Electric generates revenue primarily through the sale of its electrical components and devices across multiple sectors. The company's revenue model is based on direct sales to manufacturers, as well as partnerships with large-scale distributors and retailers. Key revenue streams include consumer electronics, where products are supplied to major brands, and the automotive sector, where Foster's components are integrated into vehicles. Additionally, the company benefits from long-term contracts and agreements with strategic partners, which provide a steady income stream. The company's focus on innovation and quality also enhances its competitive edge, driving both sales and market share.

Foster Electric Company, Limited Financial Statement Overview

Summary

Mixed fundamentals: profitability margins are stable (gross margin ~17.8%, net margin ~3.1%) and the balance sheet is solid with low leverage (debt-to-equity 0.18, equity ratio 58.3%), but performance is pressured by a sharp TTM revenue decline (-29.5%) and declining free cash flow growth (-13.8%).

Income Statement

Foster Electric Company has shown a mixed performance in its income statement. The TTM data indicates a decline in revenue growth by 29.5%, which is concerning. However, the company maintains a stable gross profit margin of approximately 17.8% and a net profit margin of 3.1%. The EBIT and EBITDA margins are moderate at 6.3% and 8.6%, respectively, indicating operational efficiency. Despite the revenue decline, profitability metrics are stable, suggesting effective cost management.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.18, indicating conservative leverage. The return on equity is modest at 7.1%, showing moderate profitability relative to shareholder equity. The equity ratio stands at 58.3%, suggesting a strong equity base relative to total assets. Overall, the balance sheet demonstrates financial stability with manageable debt levels.

Cash Flow

Cash flow analysis reveals challenges with a decline in free cash flow growth by 13.8% in the TTM period. The operating cash flow to net income ratio is 0.44, indicating adequate cash generation relative to net income. The free cash flow to net income ratio is 0.77, suggesting that a significant portion of earnings is converted into free cash flow. Despite the decline in free cash flow, the company maintains a reasonable cash flow position.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	137.65B	137.61B	122.45B	121.34B	91.11B	85.22B
Gross Profit	24.35B	24.12B	18.84B	16.16B	7.49B	11.12B
EBITDA	11.74B	11.51B	8.57B	6.16B	-5.27B	565.00M
Net Income	4.16B	3.90B	2.30B	848.00M	-7.02B	-3.36B
Balance Sheet
Total Assets	106.62B	106.83B	102.75B	92.87B	86.15B	77.23B
Cash, Cash Equivalents and Short-Term Investments	20.55B	21.50B	20.86B	13.65B	13.19B	21.09B
Total Debt	8.65B	9.05B	16.94B	17.46B	13.37B	5.20B
Total Liabilities	36.64B	38.09B	38.43B	36.36B	34.52B	21.24B
Stockholders Equity	62.11B	60.87B	58.01B	51.09B	47.16B	50.64B
Cash Flow
Free Cash Flow	10.10B	11.21B	10.62B	-2.21B	-15.52B	-1.39B
Operating Cash Flow	14.15B	14.83B	15.43B	354.00M	-12.77B	739.00M
Investing Cash Flow	-76.00M	-844.00M	-8.54B	-1.32B	-3.07B	-1.96B
Financing Cash Flow	-9.71B	-9.88B	-4.44B	1.78B	6.77B	-2.62B

Foster Electric Company, Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2711.00
• 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:6794, the sentiment is Positive. The current price of 2711 is above the 20-day moving average (MA) of 2676.80, above the 50-day MA of 2664.10, and above the 200-day MA of 2063.32, indicating a bullish trend. The MACD of 2.46 indicates Positive momentum. The RSI at 56.91 is Neutral, neither overbought nor oversold. The STOCH value of 47.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6794.

Foster Electric Company, Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6952	74 Outperform	$343.60B	17.90	5.53%	3.55%	-5.43%	55.21%
6752	73 Outperform	¥4.94T	15.46	6.73%	1.99%	-6.96%	-7.22%
6794	69 Neutral	¥61.58B	14.86	―	2.73%	6.41%	16.71%
6632	68 Neutral	¥188.68B	11.11	13.53%	1.34%	0.48%	-1.86%
6810	66 Neutral	¥95.41B	19.37	―	1.99%	3.71%	-3.32%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6753	60 Neutral	¥455.58B	7.77	―	―	-10.88%	―

Foster Electric Company, Limited Corporate Events

Foster Electric Reports Stable Six-Month Financial Results with Increased Dividends

Foster Electric Company reported its consolidated financial results for the six months ending September 30, 2025, showing a slight increase in net sales by 0.1% to ¥66,654 million. Operating profit increased by 19.5% to ¥4,327 million, while ordinary profit decreased by 6.0% to ¥3,863 million. The company announced a revision in its dividend forecast, increasing the annual dividend per share to ¥75.00. These financial results reflect a stable performance with strategic adjustments in dividends, indicating a focus on shareholder returns despite challenges in ordinary profit.

The most recent analyst rating on (JP:6794) stock is a Buy with a Yen2879.00 price target. To see the full list of analyst forecasts on Foster Electric Company, Limited stock, see the JP:6794 Stock Forecast page.

Foster Electric Revises Financial and Dividend Forecasts Upward

Foster Electric Company has revised its financial forecasts for the fiscal year ending March 31, 2026, anticipating higher profits due to strong sales in its automotive business and benefits from structural reforms. The company also increased its year-end dividend forecast, aiming to enhance shareholder value by raising the dividend payout ratio to approximately 40%, reflecting its commitment to balancing growth investments and shareholder returns.

The most recent analyst rating on (JP:6794) stock is a Buy with a Yen2879.00 price target. To see the full list of analyst forecasts on Foster Electric Company, Limited stock, see the JP:6794 Stock Forecast page.