Foster Electric Company, Limited (6794) AI Stock Analysis

• Market Cap: ¥69.65B
• Dividend Yield: 2.73%
• Average Volume (3M): 212.45K
• Price to Earnings (P/E): 17.4
• 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): N/A
• 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: 73 Outperform
• Price Target: ¥3,325.00 ▲(22.65% Upside)
• Action: Upgraded Date: 02/18/26
• Date: Action: Upgraded 02/18/26

The score is driven primarily by improved financial stability and profitability with low leverage, supported by a strong technical uptrend (price above major moving averages). Valuation is fair with a moderate dividend, but the recent revenue decline and sharp drop in free cash flow meaningfully temper the overall rating.

Positive Factors

Improved Profitability

Foster moved from loss-making years to modest but positive margins (TTM net ~3%, EBIT ~6.2%). Sustained profitability supports reinvestment in product development and capacity, makes the business less dependent on external funding, and provides a baseline cushion against cyclical demand declines.

Conservative Balance Sheet

Low leverage (debt/equity ~0.14) gives the company financial flexibility to fund working-capital swings, invest in tooling for OEM programs, and withstand downturns without urgent refinancing. A strong equity base reduces bankruptcy and liquidity risk over multi-quarter horizons.

Positive Cash Generation

Positive operating cash flow and meaningful FCF (¥4.7B, ~71% of net income) indicate earnings convert to cash, supporting dividends, capex and customer program funding. Reliable cash generation underpins long-term supplier relationships and the ability to invest selectively in higher-value modules.

Negative Factors

Revenue Softness

Declining TTM revenue (-~2.6%) erodes scale benefits and can reduce bargaining power with OEM customers. If the trend persists, fixed-cost absorption worsens, capital intensity rises per unit, and the company may struggle to sustain margin improvements or justify incremental capacity investments.

Sharp Free Cash Flow Decline

A ~54% drop in FCF growth materially weakens the cash buffer that funds R&D, tooling, and working capital for OEM program ramps. Sustained FCF erosion risks delaying product investments or increasing reliance on financing, which would reduce strategic optionality and resilience in multi-quarter cycles.

Modest Returns on Equity

An ROE around 6.8% and modest margins imply the business generates only limited returns on shareholders' capital. Over time this constrains the firm's ability to self-fund expansion and may limit investor confidence in the durability of growth unless operational improvements raise asset efficiency or margins.

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

Profitability has recovered versus prior loss years (TTM net margin ~3.0%, EBIT margin ~6.2%) and leverage is conservative (debt-to-equity ~0.14). The main offsets are cooling revenue (TTM ~-2.6%) and a sharp decline in free cash flow (TTM FCF growth ~-53.6%), which raises questions about durability and cash conversion.

Income Statement

Profitability has improved materially versus earlier loss years, with TTM (Trailing-Twelve-Months) net margin at ~3.0% and EBIT margin at ~6.2% (vs. deeply negative margins in 2022 and very weak profitability in 2023). Annual results also show a step-up from 2024 to 2025 in both revenue and earnings, signaling better operating execution. The main drawback is that growth has cooled recently, with TTM revenue down ~2.6%, and margins remain modest for the sector—leaving less cushion if demand softens or costs rise.

Balance Sheet

Leverage looks conservative, with TTM (Trailing-Twelve-Months) debt-to-equity around 0.14 and equity representing a sizable portion of the capital structure. This is a notable improvement from higher leverage levels in 2023–2024, indicating strengthening balance sheet flexibility. Return on equity is positive (~6.8% TTM) but still not high, reflecting that while the balance sheet is stable, the business is not yet generating strong returns on the equity base.

Cash Flow

Cash generation is positive in TTM (Trailing-Twelve-Months), with operating cash flow of about ¥10.4B and free cash flow of about ¥4.7B, and free cash flow running at ~71% of net income—generally supportive of earnings quality. However, free cash flow dropped sharply (TTM free cash flow growth ~-53.6%) versus the prior annual period, pointing to higher investment, working-capital drag, or less favorable cash conversion. Cash flow stability is also a watch item given the very weak cash flow profile seen in 2022–2023.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	134.14B	137.61B	122.45B	121.34B	91.11B	85.22B
Gross Profit	23.96B	24.12B	18.84B	16.16B	7.49B	11.12B
EBITDA	10.90B	11.51B	8.57B	6.16B	-5.27B	565.00M
Net Income	4.01B	3.90B	2.30B	848.00M	-7.02B	-3.36B
Balance Sheet
Total Assets	109.90B	106.83B	102.75B	92.87B	86.15B	77.23B
Cash, Cash Equivalents and Short-Term Investments	19.52B	21.50B	20.86B	13.65B	13.19B	21.09B
Total Debt	9.29B	9.05B	16.94B	17.46B	13.37B	5.20B
Total Liabilities	37.00B	38.09B	38.43B	36.36B	34.52B	21.24B
Stockholders Equity	64.49B	60.87B	58.01B	51.09B	47.16B	50.64B
Cash Flow
Free Cash Flow	4.69B	11.21B	10.62B	-2.21B	-15.52B	-1.39B
Operating Cash Flow	10.43B	14.83B	15.43B	354.00M	-12.77B	739.00M
Investing Cash Flow	-1.86B	-844.00M	-8.54B	-1.32B	-3.07B	-1.96B
Financing Cash Flow	-9.46B	-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: Negative
• RSI: Neutral
• STOCH: Negative

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 below the 20-day moving average (MA) of 3012.50, below the 50-day MA of 2817.68, and above the 200-day MA of 2248.28, indicating a bullish trend. The MACD of 81.64 indicates Negative momentum. The RSI at 62.11 is Neutral, neither overbought nor oversold. The STOCH value of 80.78 is Negative, 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	¥358.07B	18.65	5.53%	3.55%	-5.43%	55.21%
6794	73 Outperform	¥69.65B	17.44	―	2.73%	6.41%	16.71%
6632	66 Neutral	¥196.15B	10.26	13.53%	1.34%	0.48%	-1.86%
6810	66 Neutral	¥98.73B	20.05	―	1.99%	3.71%	-3.32%
6752	62 Neutral	¥5.92T	29.16	6.73%	1.99%	-6.96%	-7.22%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6753	49 Neutral	¥418.19B	3.90	―	―	-10.88%	―

Foster Electric Company, Limited Corporate Events

Foster Electric Lifts Earnings and Dividend Despite Lower Sales

Foster Electric reported consolidated net sales of ¥100.0 billion for the nine months ended December 31, 2025, down 3.4% year on year, while operating profit slipped 1.7% to ¥5.5 billion and ordinary profit fell 5.6% to ¥5.5 billion. Profit attributable to owners of parent rose 3.4% to ¥3.3 billion, lifting basic earnings per share to ¥146.49, and the equity-to-asset ratio improved to 58.7% as total assets and net assets increased.

The company kept its full-year forecast unchanged, projecting fiscal 2026 net sales of ¥135.0 billion, a 1.9% decline, but expects operating profit to edge up 3.0% and profit attributable to owners of parent to grow 7.6%. Foster Electric also plans to increase annual dividends to ¥75.00 per share from ¥60.00 in the prior year, signaling continued shareholder returns despite soft top-line growth and a forecasted drop in ordinary profit.

The most recent analyst rating on (JP:6794) stock is a Buy with a Yen3044.00 price target. To see the full list of analyst forecasts on Foster Electric Company, Limited stock, see the JP:6794 Stock Forecast page.