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

• Market Cap: ¥101.26B
• 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: -1.33
• 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: ¥8,496.00 ▲(36.81% 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

Hioki's zero-debt balance sheet provides lasting financial resilience: it lowers refinancing and interest risks, preserves liquidity for R&D, capex and dividends, and gives management flexibility to pursue strategic investments or weather cyclical troughs without leverage-driven constraints.

High and improving margins

Sustained margin expansion signals durable product pricing power and favorable product mix in test-and-measure equipment. High gross and operating margins support reinvestment, R&D and dividend capacity, and provide a buffer if sales growth moderates over the next several months.

Recurring and diversified revenue channels

Hioki's revenue mix includes instruments, accessories, software and recurring after-sales services. This diversification and service attach rate creates sticky, higher-margin follow-on revenue, improves customer lifetime value, and reduces dependence on single large instrument orders.

Negative Factors

Near-term revenue and earnings deceleration

Revenue and profit growth slowed materially in 2025, with growth near 1%. Persistent demand weakening over several quarters can compress utilization and slow new product adoption, limiting organic investment and making multi-quarter recovery dependent on end-market capex cycles.

Weaker and inconsistent free cash flow conversion

A declining and variable FCF conversion ratio reduces the company's ability to fund growth, pay dividends or repurchase stock from operating cash alone. Inconsistent conversion increases sensitivity to working-capital swings and makes capital allocation decisions more constrained.

Exposure to cyclical capital spending

Hioki's end-markets are cyclical and tied to customers' capital expenditures. Structural dependence on capex in electronics and battery sectors can produce lumpy orders and revenue volatility across quarters, complicating capacity planning and smoothing of long-term growth trends.

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 primarily makes money by selling electrical test and measurement hardware to customers in manufacturing, R&D, and maintenance/inspection. Key revenue streams include (1) instrument sales: revenue from shipping measurement devices (e.g., meters, recorders, power analyzers and related test equipment), which is typically recognized upon delivery/acceptance depending on contract terms; (2) accessories and consumables: sales of probes, current clamps, sensors, leads, and other peripherals required to use or expand the capability of its instruments; (3) software and system solutions: income from measurement/analysis software, connectivity tools, and integrated measurement systems used in production lines or laboratories where hardware is bundled with software and engineering support; and (4) after-sales services: maintenance, calibration, repair, and support services that extend the product lifecycle and can provide recurring revenue. Demand is influenced by capital spending cycles and investment in electronics, battery manufacturing, and industrial equipment maintenance, because customers often purchase Hioki’s instruments as part of setting up production lines, quality control processes, or laboratory testing capability. Information on specific partnerships or the quantitative contribution of each revenue stream is null.

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	9.20B	8.69B	9.16B	9.39B	8.22B	6.87B
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: Neutral
• 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 Neutral. The current price of 6210 is below the 20-day moving average (MA) of 7539.50, below the 50-day MA of 6941.60, and above the 200-day MA of 6078.50, indicating a neutral trend. The MACD of 170.96 indicates Positive momentum. The RSI at 51.90 is Neutral, neither overbought nor oversold. The STOCH value of 41.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	¥27.43B	13.32	―	2.89%	6.15%	2.98%
7745	80 Outperform	¥70.08B	8.26	―	2.31%	6.50%	30.54%
6866	79 Outperform	¥101.26B	15.13	―	3.23%	7.28%	4.16%
6859	75 Outperform	¥70.58B	12.98	―	3.12%	2.78%	-5.32%
6853	73 Outperform	¥19.30B	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	¥9.23B	16.72	―	2.45%	15.66%	-69.17%