Keyence (6861) AI Stock Analysis

• Market Cap: ¥15.54T
• Dividend Yield: 0.78%
• Average Volume (3M): 684.14K
• Price to Earnings (P/E): 38.3
• Beta (1Y): 1.03
• Revenue Growth: 7.09%
• EPS Growth: 7.51%
• Country: JP
• Employees: 12,286
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 458.54
• Shares Outstanding: 243,207,690
• 10 Day Avg. Volume: 680,310
• 30 Day Avg. Volume: 684,136
• PEG Ratio: 4.53
• Price to Book (P/B): 4.56
• Price to Sales (P/S): 13.39
• P/FCF Ratio: 35.89
• 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: ¥74,861.11
• Price Target Upside: 13.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 1,760.83
• Revenue Forecast (FY): ¥1.14T

• Rating: 80 Outperform
• Price Target: ¥75,804.00 ▲(14.75% Upside)
• Action: Downgraded Date: 01/29/26
• Date: Action: Downgraded 01/29/26

The score is driven primarily by exceptional financial quality—elite margins, strong cash generation, and a debt-free balance sheet. Technicals are moderately supportive with neutral momentum signals, while the premium valuation (high P/E and low yield) meaningfully tempers the overall score.

Positive Factors

Profitability / Pricing Power

Consistently very high gross and operating margins point to differentiated products and durable pricing power in factory automation. Such margin durability supports strong internal funding for R&D and capex, protects returns through cycles, and enables reinvestment without reliance on external financing.

Debt-Free Balance Sheet

A zero-debt balance sheet gives the company long-term financial resilience and optionality: it can fund growth, absorb downturns, and pursue strategic investments or share returns without refinancing risk. This structural strength reduces insolvency risk and preserves capacity to seize opportunities.

Direct Sales Model & Installed Base

The direct sales approach and deep installed base create high switching costs and recurring demand as factories expand or tighten quality controls. Long sales cycles convert to sticky customer relationships, facilitating upsells, standardized deployments, and sustained revenue from replacements and line additions.

Negative Factors

Uneven Historical Revenue Growth

Irregular top-line performance indicates exposure to cyclical end-markets and uneven adoption across product cycles. That variability complicates multi-period planning, can compress operating leverage in weak years, and means investors and management must manage for lumpy demand rather than steady expansion.

Cash-Flow Cyclicality

While FCF generally tracks net income, periodic declines show sensitivity to timing of customer capex and product cycles. Cyclical cash flows can limit consistency of buybacks/dividends or force delayed investment during downturns, reducing predictability of capital allocation over multi-quarter horizons.

Moderate Returns on Equity

ROE in the low-mid teens suggests limited capital intensity benefits relative to the large equity base. With no leverage to amplify returns, capital efficiency may be constrained, implying management must find organic growth or high-return investments to uplift long-term shareholder returns.

Keyence Business Overview & Revenue Model

Company Description

Keyence Corporation, together with its subsidiaries, develops, manufactures, and sells factory automation solutions worldwide. The company offers photoelectric, fiber optic, laser, positioning, vision, and inductive proximity sensors, as well as network communication units used for presence/absence and part differentiation applications. It also provides measurement sensors, such as laser displacement and profiler, optical/laser micrometer, 3D interference measurement, spectral interference displacement, and contact displacement/LVDT sensors; and measurement systems, including optical comparators, 3D scanners, and CMM/laser trackers. In addition, the company offers safety products comprising safety laser scanners, light curtains, interlock switches, and controllers to protect operators from machine hazards; and pressure, flow, level, and temperature sensors for monitoring equipment processes. Further, it provides static eliminators/ionizers and electrostatic sensors which protect workers, machinery, and products from the damaging effects of electrostatic charge; vision systems and sensors, and barcode scanners to perform automatic inspection and part identification; and programmable logic controllers and other controls that are used for machine control applications. Additionally, the company offers laser marking systems/laser markers and industrial continuous inkjet printers; digital, 3D laser scanning, and fluorescence microscopes, as well as wide-area 3D measuring systems for industrial and life science applications; and handheld mobile computers. It serves customers in automotive/chassis assembly, metals/machining, FPD/glass, semiconductor/ICS, plastic/molding, food/pharmaceutical, steel, and other industries. Keyence Corporation was founded in 1972 and is headquartered in Osaka, Japan.

How the Company Makes Money

Keyence makes money primarily through the sale of its automation and sensing solutions. The company's revenue model is centered on providing high-tech products that cater to the needs of industrial automation. The key revenue streams include sales of sensors, vision systems, measuring instruments, and laser markers. Keyence's earnings are bolstered by its commitment to innovation, which allows it to command a premium price for its advanced technology solutions. The company does not rely on significant partnerships for its revenue but focuses on direct sales to customers across various industries globally. Factors contributing to its earnings include its strong brand reputation, extensive product range, and its ability to provide tailored solutions that improve manufacturing efficiency and reduce operational costs for its clients.

Keyence Financial Statement Overview

Summary

Elite profitability (gross margin ~82–84%, EBIT margin ~51–57%, net margin ~37–40%), fortress-like debt-free balance sheet, and strong cash conversion (FCF closely tracks net income). Main risk is uneven historical growth, despite strong recent momentum.

Income Statement

Keyence shows exceptional profitability with consistently very high gross and operating margins (gross margin ~82–84% and EBIT margin ~51–57% across the period) and strong net margins (~37–40%), indicating strong pricing power and cost discipline. Revenue growth has been positive overall, with a sharp acceleration in the latest annual period (2025), though the growth profile has been somewhat uneven (including a decline in 2020 and slower growth in some later years). Overall, the income statement reflects a highly profitable business with strong momentum recently, offset by some historical volatility in growth rates.

Balance Sheet

The balance sheet is extremely conservative: total debt is reported at zero across all periods, resulting in no leverage pressure and high financial flexibility. Equity and total assets have steadily expanded over time, supporting balance sheet strength. Returns on equity are solid (roughly ~10–15%), though not unusually high given the large equity base and debt-free structure. Overall, the company appears very resilient with minimal balance sheet risk.

Cash Flow

Cash generation is strong, with free cash flow consistently high and closely tracking net income (free cash flow to net income roughly ~0.87–0.98), suggesting good earnings quality and limited cash leakage. Operating cash flow comfortably covers net income (coverage above ~1.8x in the provided periods), reinforcing conversion strength. Free cash flow growth is generally positive and surged in the latest annual period, although there were years with modest declines/soft patches, indicating some cyclicality in cash flow growth despite overall strength.

Breakdown	TTM	Mar 2026	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	568.18B	1.06T	967.29B	922.42B	755.17B	538.13B
Gross Profit	472.31B	887.70B	802.51B	754.73B	621.19B	440.88B
EBITDA	312.08B	564.97B	508.78B	510.44B	426.67B	284.31B
Net Income	214.73B	398.66B	369.64B	362.96B	303.36B	197.29B
Balance Sheet
Total Assets	3.45T	3.29T	2.96T	2.65T	2.32T	2.01T
Cash, Cash Equivalents and Short-Term Investments	1.32T	1.22T	1.13T	940.46B	1.00T	930.00B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	171.79B	180.67B	158.60B	158.80B	150.45B	97.03B
Stockholders Equity	3.28T	3.11T	2.81T	2.49T	2.17T	1.91T
Cash Flow
Free Cash Flow	378.13B	395.18B	375.42B	263.28B	265.31B	188.29B
Operating Cash Flow	396.78B	409.52B	387.92B	302.63B	271.48B	192.65B
Investing Cash Flow	-292.40B	-280.61B	-242.79B	-283.49B	-11.13B	-177.49B
Financing Cash Flow	-90.03B	-83.43B	-76.31B	-63.67B	-49.82B	-48.53B

Keyence Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 66060.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6861, the sentiment is Positive. The current price of 66060 is above the 20-day moving average (MA) of 58768.00, above the 50-day MA of 58350.00, and above the 200-day MA of 57396.99, indicating a bullish trend. The MACD of 2124.76 indicates Negative momentum. The RSI at 70.55 is Negative, neither overbought nor oversold. The STOCH value of 80.73 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6861.

Keyence Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6914	80 Outperform	¥114.98B	17.28	―	1.68%	2.72%	33.10%
6861	80 Outperform	¥15.54T	38.32	12.80%	0.78%	7.09%	7.51%
6856	78 Outperform	¥878.60B	23.82	11.99%	0.65%	8.50%	14.06%
6965	74 Outperform	¥637.71B	47.17	4.19%	2.25%	3.97%	-41.76%
6981	74 Outperform	$7.50T	39.89	8.95%	1.88%	2.88%	28.76%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6645	57 Neutral	¥1.07T	46.64	3.60%	2.62%	3.51%	―

Keyence Corporate Events

Keyence Delivers Higher Sales, Profits and Dividend Hike for Nine-Month Period

Keyence reported solid growth for the nine months ended December 20, 2025, with net sales rising 7.7% year on year to ¥834.6 billion and net income attributable to owners of the parent increasing 6.6% to ¥311.2 billion, reflecting continued demand for its automation and sensing products and sustained high profitability. Total assets expanded to ¥3.48 trillion and the equity ratio improved to 95.9%, underscoring the company’s strong balance sheet, while management maintained a generous shareholder return policy, confirming an annual dividend forecast of ¥550 per share for the fiscal year ending March 20, 2026, up sharply from ¥350 in the previous year.

The most recent analyst rating on (JP:6861) stock is a Buy with a Yen67337.00 price target. To see the full list of analyst forecasts on Keyence stock, see the JP:6861 Stock Forecast page.