Icom Incorporated (6820) AI Stock Analysis

• Market Cap: ¥42.83B
• Dividend Yield: 2.73%
• Average Volume (3M): 22.04K
• Price to Earnings (P/E): 18.8
• Beta (1Y): 0.66
• Revenue Growth: -1.19%
• EPS Growth: -30.24%
• Country: JP
• Employees: 1,034
• Sector: Technology
• Sector Strength: 85
• Industry: Communication Equipment
• EPS (TTM): 18.24
• Shares Outstanding: 14,850,000
• 10 Day Avg. Volume: 15,990
• 30 Day Avg. Volume: 22,040
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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

• Rating: 74 Outperform
• Price Target: ―

Icom Incorporated's stock is supported by strong financial performance, featuring robust revenue growth and a solid balance sheet with low leverage. However, the decline in free cash flow poses a challenge. Technical analysis shows mixed signals, with the stock trading below key moving averages, suggesting resistance. The valuation is fair, with a reasonable P/E ratio and attractive dividend yield. Overall, the company appears well-positioned within the communication equipment industry, but careful monitoring of cash flow and market trends is advised.

Positive Factors

Strong Balance Sheet

Icom's high equity ratio and absence of debt highlight its financial resilience, providing a solid foundation for future investments and growth opportunities.

Revenue Growth

The significant revenue growth demonstrates Icom's ability to expand its market reach and product adoption, reinforcing its competitive position in the communication equipment sector.

Operational Efficiency

Strong profit margins and operational efficiency suggest that Icom is effectively managing costs and maximizing profitability, supporting sustainable long-term growth.

Negative Factors

Decline in Free Cash Flow

A significant decline in free cash flow may limit Icom's ability to invest in new projects or respond to market changes, potentially impacting growth and operational flexibility.

Earnings Decline

The decline in earnings suggests potential challenges in maintaining past growth rates, which could affect investor confidence and future financial performance.

Revenue Growth Rate

The negative revenue growth rate indicates a slowdown in sales expansion, which could signal market saturation or increased competition, impacting future revenue potential.

Icom Incorporated Business Overview & Revenue Model

Company Description

Icom Incorporated, together with its subsidiaries, manufactures and sells telecommunications equipment to individual and corporate customers primarily in Japan, the United States, Canada, Germany, Spain, Australia, China, and Vietnam. The company offers wireless device, such as amateur radio equipment, receiving machines, license-free walkie-talkies, satellite communication and IP transceivers, wireless devices, various commercial radios, maritime communication equipment, and aviation radio; network equipment, such as Wifi access points, 5GHz band wireless access systems, wireless LAN units, Wifi bridges, IP phone system equipment, IoT devices, and wireless IP cameras. The company also offers microphones, earphones/speakers, headsets, PTT/VOX cables, external speakers, batteries, chargers, AC adapters, power supplies, power cables, separation kits, mount brackets, carrying handles, belt clips, straps, carrying cases, antennas, antenna tuners, Dstar repeater systems, software, data communication cables, linear amplifiers, external devices, built in units, extension and conversion cables, and GPS antennas. Icom Incorporated was founded in 1954 and is headquartered in Osaka, Japan.

How the Company Makes Money

Icom Incorporated generates revenue primarily through the sale of its communication devices and equipment. The company's key revenue streams include the amateur radio market, commercial land mobile radio market, and marine and aviation communication systems. Icom also benefits from sales in the public safety sector, providing reliable communication solutions for emergency services. Beyond product sales, Icom may engage in partnerships and contracts with organizations and governments for customized communication solutions, contributing further to its earnings. The company's global distribution network and commitment to technological advancement play crucial roles in its financial success.

Icom Incorporated Financial Statement Overview

Summary

Icom Incorporated shows robust financial health with strong revenue growth, profitability, and a solid balance sheet. The company benefits from a high equity ratio, indicating financial stability and low leverage. However, cash flow management needs attention due to a significant decline in free cash flow.

Income Statement

Icom Incorporated has shown consistent growth with a notable increase in total revenue from ¥28,277 million in 2022 to ¥37,117 million in 2024, reflecting a strong revenue growth rate. The gross profit margin remains robust, and the net profit margin has improved to 9.32%. The EBIT and EBITDA margins are healthy, indicating operational efficiency. The company’s ability to maintain profitability and growth in revenue demonstrates strong financial performance in the communication equipment sector.

Balance Sheet

The balance sheet of Icom Incorporated is exceptionally strong, featuring a high equity ratio of 89.85%, indicating financial stability and low leverage with no total debt reported. The return on equity (ROE) has improved over the years, reflecting efficient management of shareholder funds. The company's strong cash position and minimal liabilities contribute to its financial resilience.

Cash Flow

The cash flow statements reveal a mixed picture. Although there is a significant decline in free cash flow growth, the operating cash flow to net income ratio remains positive, suggesting adequate cash generation from operations. However, the reduction in free cash flow from ¥2,692 million in 2023 to ¥216 million in 2024 highlights potential challenges in managing capital expenditures and investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	37.47B	37.47B	37.12B	34.17B	28.28B	27.94B
Gross Profit	16.65B	16.39B	16.04B	14.29B	11.37B	11.67B
EBITDA	5.01B	5.01B	5.58B	4.12B	2.07B	3.13B
Net Income	2.95B	2.95B	3.46B	2.57B	1.09B	1.74B
Balance Sheet
Total Assets	73.89B	73.89B	73.16B	67.16B	63.37B	61.67B
Cash, Cash Equivalents and Short-Term Investments	27.10B	27.10B	28.44B	29.40B	27.08B	26.63B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	6.53B	6.53B	7.42B	6.71B	5.63B	5.15B
Stockholders Equity	67.36B	67.36B	65.75B	60.45B	57.74B	56.52B
Cash Flow
Free Cash Flow	0.00	945.00M	343.00M	2.69B	1.43B	1.69B
Operating Cash Flow	0.00	2.90B	2.21B	3.42B	2.08B	2.97B
Investing Cash Flow	0.00	-2.67B	-3.67B	2.48B	-3.44B	732.00M
Financing Cash Flow	0.00	-1.39B	-1.12B	-718.00M	-717.00M	-1.94B

Icom Incorporated Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3040.00
• 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:6820, the sentiment is Positive. The current price of 3040 is above the 20-day moving average (MA) of 2921.30, above the 50-day MA of 2913.82, and above the 200-day MA of 2791.73, indicating a bullish trend. The MACD of 25.62 indicates Negative momentum. The RSI at 66.85 is Neutral, neither overbought nor oversold. The STOCH value of 80.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6820.

Icom Incorporated Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6822	82 Outperform	¥5.36B	4.02		―	1.33%	13.09%
6718	80 Outperform	¥46.60B	18.55		4.56%	-2.28%	-43.48%
6820	74 Outperform	¥42.83B	18.83		2.73%	-1.19%	-30.24%
6675	73 Outperform	¥30.84B	8.06		2.53%	16.42%	79.16%
Sector *	61 Neutral	$36.69B	12.42	-10.20%	1.85%	8.50%	-7.32%
6771	49 Neutral	¥3.78B	29.94		2.04%	0.35%	―

Icom Incorporated Corporate Events

Icom Incorporated Reports Decline in Financial Performance but Projects Modest Growth

Icom Incorporated reported a decline in its financial performance for the nine months ended December 31, 2024, with net sales and profits experiencing significant drops compared to the previous year. Despite the downturn, the company maintains a strong equity-to-asset ratio, indicating a stable financial position, and projects modest growth in net sales and operating profit for the full fiscal year ending March 31, 2025.