Obara Group Incorporated (6877) AI Stock Analysis

• Market Cap: ¥66.73B
• Dividend Yield: 3.85%
• Average Volume (3M): 20.19K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.51
• Revenue Growth: 9.38%
• EPS Growth: 8.88%
• Country: JP
• Employees: 1,711
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 115.02
• Shares Outstanding: 20,869,380
• 10 Day Avg. Volume: 22,760
• 30 Day Avg. Volume: 20,186
• PEG Ratio: 1.12
• Price to Book (P/B): 0.91
• Price to Sales (P/S): 1.10
• P/FCF Ratio: 41.97
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: ¥4,388.00 ▲(12.66% Upside)

The overall stock score for Obara Group Incorporated is driven by its strong financial performance and attractive valuation. The company demonstrates solid revenue growth and profitability, supported by a robust balance sheet. However, the technical analysis indicates weak market momentum, which slightly offsets the positive financial and valuation aspects.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective product demand, supporting long-term business sustainability.

Balance Sheet Strength

A low debt-to-equity ratio reflects conservative leverage, enhancing financial stability and reducing risk in economic downturns.

Profitability Margins

Strong gross profit margins indicate efficient cost management, supporting sustained profitability and competitive pricing strategies.

Negative Factors

Free Cash Flow Challenges

Declining free cash flow growth may limit future investments and liquidity, potentially impacting long-term expansion and operational flexibility.

Net Profit Margin Pressure

A decrease in net profit margin suggests rising costs or pricing pressures, which could affect overall profitability if not managed effectively.

Cash Generation Efficiency

Reduced efficiency in converting earnings into cash could signal potential liquidity issues, affecting the company's ability to fund operations and growth.

Obara Group Incorporated Business Overview & Revenue Model

Company Description

Obara Group Incorporated (6877) is a leading provider of advanced manufacturing solutions, specializing in the production and development of welding and cutting technologies. The company serves various sectors, including automotive, electronics, and construction, offering a range of core products such as resistance welding equipment, laser processing systems, and automation solutions. With a strong commitment to innovation and quality, Obara Group aims to enhance productivity and efficiency for its clients through cutting-edge technology and custom solutions.

How the Company Makes Money

Obara Group generates revenue primarily through the sale of its welding and cutting equipment and systems, which include both standard and customized products tailored to specific industrial applications. The company also earns income from providing maintenance services, technical support, and training related to the operation of its equipment. Key revenue streams include direct sales to manufacturers, long-term contracts with major automotive and electronics companies, and partnerships with distributors and service providers. Additionally, Obara Group invests in research and development to create innovative products that meet evolving market demands, thus contributing to its overall earnings growth.

Obara Group Incorporated Financial Statement Overview

Summary

Obara Group Incorporated shows strong financial health with consistent revenue growth and solid profitability margins. The balance sheet is robust with low leverage and effective equity utilization. However, the cash flow performance indicates potential areas for improvement, particularly in free cash flow generation.

Income Statement

Obara Group Incorporated has demonstrated consistent revenue growth over the years, with a notable increase of 1.59% in the latest period. The company maintains a healthy gross profit margin of approximately 33%, indicating efficient cost management. However, the net profit margin has slightly decreased to 10.96% from previous years, suggesting some pressure on profitability. The EBIT and EBITDA margins remain strong, reflecting robust operational performance.

Balance Sheet

The balance sheet of Obara Group is solid, with a low debt-to-equity ratio of 0.11, indicating conservative leverage and financial stability. The return on equity is reasonable at 9.07%, showing effective use of shareholder funds. The equity ratio stands at a healthy level, underscoring the company's strong capital structure and low financial risk.

Cash Flow

The cash flow statement reveals a decline in free cash flow growth, which could be a concern for future investments and liquidity. The operating cash flow to net income ratio is moderate, suggesting adequate cash generation from operations. The free cash flow to net income ratio has decreased, indicating potential challenges in converting earnings into cash.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	60.72B	61.68B	56.39B	55.21B	50.28B	45.48B
Gross Profit	19.82B	20.36B	17.93B	17.52B	16.82B	14.69B
EBITDA	11.37B	12.25B	11.23B	11.65B	11.27B	10.50B
Net Income	6.90B	6.76B	6.72B	7.21B	6.20B	5.99B
Balance Sheet
Total Assets	103.23B	103.83B	100.81B	94.62B	92.35B	78.41B
Cash, Cash Equivalents and Short-Term Investments	29.75B	26.18B	42.41B	39.29B	36.87B	26.70B
Total Debt	7.97B	7.94B	8.07B	2.03B	6.74B	6.84B
Total Liabilities	29.70B	29.15B	27.01B	20.51B	28.69B	24.24B
Stockholders Equity	73.39B	74.53B	73.73B	74.03B	63.59B	54.10B
Cash Flow
Free Cash Flow	0.00	1.62B	5.13B	4.37B	4.99B	8.30B
Operating Cash Flow	0.00	5.11B	8.36B	5.30B	6.66B	9.88B
Investing Cash Flow	0.00	-18.52B	-3.72B	5.13B	68.00M	-546.00M
Financing Cash Flow	0.00	-6.10B	-1.81B	-2.60B	-3.03B	-5.89B

Obara Group Incorporated Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3895.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6877, the sentiment is Negative. The current price of 3895 is below the 20-day moving average (MA) of 3906.25, below the 50-day MA of 4095.60, and above the 200-day MA of 3719.62, indicating a neutral trend. The MACD of -57.65 indicates Negative momentum. The RSI at 44.18 is Neutral, neither overbought nor oversold. The STOCH value of 23.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6877.

Obara Group Incorporated Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6101	79 Outperform	¥127.76B	10.40	―	2.18%	25.95%	66.92%
6278	76 Outperform	¥144.60B	25.76	―	1.12%	29.51%	48.81%
6877	75 Outperform	¥66.73B	9.79	―	3.85%	9.38%	8.88%
6474	74 Outperform	€95.02B	21.51	2.64%	2.31%	-4.11%	46.76%
6480	71 Outperform	¥49.24B	23.91	―	3.06%	8.75%	177.16%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6472	57 Neutral	€198.48B	-10.68	-7.84%	2.89%	-3.18%	-531.48%

Obara Group Incorporated Corporate Events

Obara Group Reports Q3 Financial Results with Increased Sales but Declining Comprehensive Income

Obara Group Incorporated reported its financial results for the third quarter of the fiscal year ending September 30, 2025, showing a notable increase in net sales by 10.6% compared to the previous year, reaching 45,166 million yen. Despite this growth, the company experienced a decline in comprehensive income by 33.0%, highlighting challenges in maintaining profitability. The financial forecast for FY2025 remains unchanged, with expectations of moderate growth in net sales and stable operating income, reflecting the company’s cautious optimism amidst market uncertainties.