Hioki E.E.Corporation (6866) AI Stock Analysis

• Market Cap: ¥103.72B
• Dividend Yield: 3.23%
• Average Volume (3M): 26.70K
• Price to Earnings (P/E): 15.1
• Beta (1Y): 0.87
• Revenue Growth: 7.28%
• EPS Growth: 4.16%
• Country: JP
• Employees: 1,098
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 140.06
• Shares Outstanding: 14,024,365
• 10 Day Avg. Volume: 37,830
• 30 Day Avg. Volume: 26,700
• PEG Ratio: -1.31
• Price to Book (P/B): 1.88
• Price to Sales (P/S): 2.04
• P/FCF Ratio: 25.07
• 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): 450.6
• Revenue Forecast (FY): ¥44.00B

• Rating: 79 Outperform
• Price Target: ¥8,805.00 ▲(41.79% Upside)
• Action: Downgraded Date: 01/27/26
• Date: Action: Downgraded 01/27/26

The score is driven primarily by strong financial quality (debt-free balance sheet and solid margins), supported by a constructive technical trend and reasonable valuation with a ~3.15% dividend yield. The key constraint is near-term deceleration in 2025 results and softer free-cash-flow conversion versus 2024.

Positive Factors

Debt-free balance sheet

A zero-debt balance sheet gives Hioki durable financial flexibility and low fixed financial costs. It supports steady dividend policy, funds targeted R&D/capex without external financing, and enhances resilience through industry cycles, preserving strategic optionality over months to years.

Strong and improving margins

Sustained gross- and operating-margin strength signals product pricing power and higher-value mix (instruments, software, services). Robust margins provide internal funding for innovation and support returns even with modest topline growth, underpinning medium-term profitability stability.

Diversified revenue streams & recurring services

A mix of hardware, consumables, software and after-sales services creates recurring revenue and customer stickiness. This diversification smooths cash flow across capital-spend cycles, raises lifetime value per customer, and strengthens long-run margin resilience amid shifting end-market demand.

Negative Factors

Near-term revenue deceleration

Flattening revenue in 2025 reflects vulnerability to capital-spend cycles in electronics, batteries and industrial maintenance. Prolonged low top-line growth limits operating leverage, constrains reinvestment capacity, and risks slower scaling of higher-margin software and systems revenue.

Weaker free-cash-flow conversion

A material drop in FCF conversion reduces internally available funds for dividends, capex and strategic projects. If the trend persists, Hioki may face trade-offs between returning cash and investing in product development or expanding service infrastructure, weakening long-term growth optionality.

Easing returns on equity

Declining ROE implies the company is generating lower returns on an expanding equity base, which could reflect margin pressure or suboptimal capital allocation. Persistently lower ROE may limit shareholder returns and indicate a need to improve operational efficiency or strategic deployment of capital.

Hioki E.E.Corporation Business Overview & Revenue Model

Company Description

Hioki E.E. Corporation, together with its subsidiaries, engages in the development, manufacture, sale, and service of electrical measuring instruments in Japan and internationally. The company offers data acquisition, oscilloscopes, and memory recorders, as well as multichannel, compact, and temperature data loggers; power meters, analyzers, quality analyzers, and loggers; LCR meters, impedance analyzers, capacitance and resistance meters, battery testers, super megohmmeters, electrometers, Pico ammeters, and benchtop digital multimeters; and current probes/sensors, voltage probes, and CAN sensors. It also provides RGB laser/LED optical meters, LAN cable testers, and solar panel/photovoltaic system maintenance products; magnetic field, temperature, sound level, lux, and rotation measuring products; and electrical safety testers, hipot/insulation/leakage testers, signal generators, and calibrators. In addition, the company offers testers and handheld digital multimeters; insulation testers and megohmmeters; clamp meters and multimeters; ground resistance, phase rotation, and voltage detection products; IoT/specialized solutions, meter relays, CTs, and shunts; and bare board, package, and populated board testing products, as well as calibration and repair services. Its products are used in the mobility, battery, energy, electronic components, and infrastructure industries. The company was founded in 1935 and is headquartered in Ueda, Japan.

How the Company Makes Money

Hioki E.E. Corporation generates revenue primarily through the sale of its electrical measuring instruments. The company's key revenue streams include direct sales to end-users, distribution through a global network of distributors and resellers, and long-term contracts with industrial clients in sectors such as electronics, automotive, and renewable energy. Hioki's emphasis on innovation and quality allows it to maintain competitive pricing and strong customer loyalty, contributing to its earnings. Additionally, the company invests in research and development to continuously enhance its product offerings, ensuring alignment with industry standards and technological advancements.

Hioki E.E.Corporation Financial Statement Overview

Summary

Strong overall fundamentals led by an exceptionally conservative, debt-free balance sheet and solid profitability (2025 operating margin ~17.6%, net margin ~13.5%). The main offset is cooling momentum in 2025: revenue growth was ~+1% and both profits and cash conversion weakened versus 2024 (FCF ~44% of net income vs ~60% prior year).

Income Statement

Profitability is solid and consistent, with gross margin improving over time (about 43.0% in 2020 to 50.4% in 2025) and healthy operating profitability (2025 operating margin ~17.6%). However, 2025 shows clear deceleration: revenue growth is essentially flat (about +1.0%), and both operating profit and net margin stepped down versus 2024 (net margin ~13.5% vs ~15.8%). Overall: strong margins, but near-term growth and earnings momentum have cooled.

Balance Sheet

The balance sheet is exceptionally conservative with zero debt across all reported periods and a steadily rising equity base (about ¥26.0B in 2020 to ¥44.0B in 2025). Returns on equity are good (roughly 12%–17% most years), though they have eased recently (about 12.4% in 2025 vs ~15.5% in 2024), suggesting profitability is not keeping pace with the expanding capital base. Overall: very strong financial stability with modest recent efficiency slippage.

Cash Flow

Cash generation is generally healthy, with operating cash flow covering net income in recent years (about 1.08x in 2025; ~1.22x in 2024). Free cash flow is positive, but conversion softened in 2025 (free cash flow roughly 44% of net income vs ~60% in 2024), and there was a notable weak year in 2022 when free cash flow turned slightly negative. Overall: solid recent cash profitability, but free-cash-flow consistency and conversion are the main watch items.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	40.15B	40.53B	39.27B	39.15B	34.37B	29.32B
Gross Profit	20.47B	20.41B	19.56B	18.27B	15.87B	13.64B
EBITDA	9.43B	9.04B	9.67B	9.67B	8.44B	7.13B
Net Income	5.86B	5.46B	6.19B	6.33B	5.33B	4.52B
Balance Sheet
Total Assets	45.82B	51.49B	48.16B	45.25B	40.61B	36.39B
Cash, Cash Equivalents and Short-Term Investments	16.46B	18.53B	18.32B	16.53B	13.62B	16.02B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	5.14B	7.54B	8.34B	8.13B	7.83B	6.94B
Stockholders Equity	40.68B	43.96B	39.82B	37.12B	32.78B	29.45B
Cash Flow
Free Cash Flow	0.00	3.29B	5.35B	5.43B	-50.90M	4.05B
Operating Cash Flow	0.00	7.52B	8.87B	8.44B	1.24B	4.70B
Investing Cash Flow	0.00	-4.73B	-3.75B	-3.35B	-1.48B	-826.26M
Financing Cash Flow	0.00	-2.71B	-3.60B	-2.32B	-2.46B	-1.43B

Hioki E.E.Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6210.00
• 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:6866, the sentiment is Positive. The current price of 6210 is below the 20-day moving average (MA) of 7347.00, below the 50-day MA of 6733.80, and above the 200-day MA of 6006.05, indicating a bullish trend. The MACD of 253.66 indicates Positive momentum. The RSI at 59.46 is Neutral, neither overbought nor oversold. The STOCH value of 44.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6866.

Hioki E.E.Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6850	80 Outperform	¥29.45B	13.32	―	2.89%	6.15%	2.98%
7745	80 Outperform	¥73.59B	8.26	―	2.31%	6.50%	30.54%
6866	79 Outperform	¥103.72B	15.13	―	3.23%	7.28%	4.16%
6859	75 Outperform	¥79.42B	12.98	―	3.12%	2.78%	-5.32%
6853	73 Outperform	¥20.22B	18.81	―	2.93%	-1.58%	12.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6858	59 Neutral	¥9.80B	16.72	―	2.45%	15.66%	-69.17%