NKK SWITCHES CO., LTD. (6943) AI Stock Analysis

• Market Cap: ¥4.29B
• Dividend Yield: 1.79%
• Average Volume (3M): 1.09K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.51
• Revenue Growth: -10.43%
• EPS Growth: -368.47%
• Country: JP
• Employees: 282
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 160.07
• Shares Outstanding: 842,520
• 10 Day Avg. Volume: 190
• 30 Day Avg. Volume: 1,093
• PEG Ratio: 0.05
• Price to Book (P/B): 0.30
• Price to Sales (P/S): 0.50
• P/FCF Ratio: 17.21
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: ¥5,236.00 ▲(13.83% Upside)
• Action: Reiterated Date: 08/05/25
• Date: Action: Reiterated 08/05/25

The overall stock score for NKK SWITCHES CO., LTD. is primarily impacted by financial performance challenges, particularly in profitability and revenue growth. The technical analysis indicates neutral momentum, and the valuation is concerning due to a negative P/E ratio. The robust balance sheet provides some stability, but the company needs to address earnings issues to improve its outlook.

Positive Factors

Strong balance sheet and low leverage

A high equity ratio and minimal debt provide durable financial flexibility, reducing refinancing and interest risks over the medium term. This capitalization cushions the business through cyclical downturns, supports working-capital needs for B2B customers, and preserves capacity for targeted investments or custom product development despite near-term earnings pressure.

Positive operating cash flow and FCF improvement

Consistent operating cash generation and a recent improvement in free cash flow indicate the company can fund ongoing operations and selective capital needs from internal sources. Over 2-6 months this supports stability in supplier and customer relationships, and enables management to prioritize margin recovery or product investment without immediate external financing.

Broad product range and end-market diversification

A wide portfolio of switch types and exposure across industrial, medical, communications and instrumentation markets provides structural demand diversification. Multi-market OEM channels and custom-config capabilities reduce dependency on any single end market and support long-term revenue resilience from recurring replacement and integration needs.

Negative Factors

Declining revenue and weakened margins

Sustained revenue contraction and margin deterioration indicate structural demand or pricing pressure and weaken the firm's ability to leverage fixed costs. Negative net profit and shrinking gross margins constrain reinvestment, make margin recovery harder, and increase the risk that operating deleveraging will persist absent durable demand or cost fixes.

Earnings erosion and negative ROE

Negative ROE and large EPS deterioration signal that the company is not currently generating returns on shareholder capital. Over months this undermines financial flexibility, may limit strategic spending, and reduces capacity to support dividends or attract equity investment needed to fund growth or restructuring.

Inconsistent free cash flow generation

Volatile free cash flow history raises risk that cash generation may falter if operating performance worsens. Inconsistency complicates multi-quarter planning for capex, working capital and R&D, increasing the chance the company must rely on reserves or external funding during prolonged recovery periods.

NKK SWITCHES CO., LTD. Business Overview & Revenue Model

Company Description

NKK Switches Co., Ltd. engages in the development, manufacture, and sale of various switches for industrial equipment in Japan, Asia, Europe, and America. It offers toggle, rocker, pushbutton, illuminated pushbutton, multi-function pushbutton, emergency stop, key lock, rotary, slide, tactile, and tilt switches; indicator light; relay; seat keyboard; touch panel; and accessories, as well as universal design products. The company's products are used in information and communication equipment, space satellite equipment, computers, FA automation equipment, aviation, railways, ships, medical care, disaster prevention, measurement and control equipment, semiconductor-related equipment, amusement, mobile communication, health, and environment fields. The company was formerly known as Nihon Kaiheiki Ind. Co., Ltd. and changed its name to NKK Switches Co., Ltd. in April 2014. NKK Switches Co., Ltd. was founded in 1951 and is headquartered in Kawasaki, Japan.

How the Company Makes Money

NKK SWITCHES generates revenue primarily through the sale of its wide array of switch products to various industries, including automotive, telecommunications, and consumer electronics. The company’s revenue model is driven by direct sales to manufacturers and distributors, as well as providing custom solutions that cater to specific industry requirements. Key revenue streams include standard product sales, custom product development, and potential long-term contracts with large-scale manufacturers. Significant partnerships with major electronics manufacturers enhance NKK’s market reach and contribute to stable earnings, while ongoing investments in research and development help the company maintain a competitive edge in the market.

NKK SWITCHES CO., LTD. Financial Statement Overview

Summary

NKK SWITCHES CO., LTD. faces financial challenges with declining revenue and profitability affecting its income statement. However, the company's balance sheet is strong with low leverage and high equity, providing a cushion against operational pressures. Cash flow generation remains positive but inconsistent, suggesting a need for improved earnings stability.

Income Statement

The income statement reflects a challenging financial period for NKK SWITCHES CO., LTD. with declining revenue and profitability. Revenue growth has been negative for the last two fiscal years, with a significant drop in 2025. Gross profit margin remains positive but has declined, indicating pressure on the cost structure. Net profit margin turned negative in 2025, raising concerns about the company's ability to generate profits. The negative EBIT and EBITDA margins in 2025 further highlight operational challenges.

Balance Sheet

The balance sheet remains robust with a high equity ratio, indicating strong capitalization and low reliance on debt. The debt-to-equity ratio is minimal, reflecting a conservative financial structure. However, ROE has turned negative due to the recent net losses, which is a concern. Overall, the company's balance sheet shows stability and financial health, albeit impacted by recent earnings performance.

Cash Flow

Cash flow analysis shows positive operating cash flow, which is a positive indicator of liquidity. However, free cash flow showed significant improvement in 2025 but has been inconsistent in previous years, posing potential risks to cash generation sustainability. The operating cash flow to net income ratio is high, indicating operational efficiency in cash generation relative to net income. Despite challenges, cash flow management appears resilient.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	7.40B	7.56B	9.44B	10.33B	8.94B	6.83B
Gross Profit	2.86B	3.00B	3.83B	4.16B	3.79B	2.73B
EBITDA	230.14M	234.96M	989.06M	1.43B	949.83M	420.66M
Net Income	-442.97M	-404.09M	389.26M	826.27M	581.12M	62.21M
Balance Sheet
Total Assets	14.68B	14.97B	15.54B	15.35B	14.07B	12.82B
Cash, Cash Equivalents and Short-Term Investments	4.39B	4.69B	4.84B	5.39B	5.42B	5.39B
Total Debt	438.45M	254.35M	305.49M	123.34M	156.04M	199.30M
Total Liabilities	2.23B	2.27B	2.26B	3.03B	2.85B	2.32B
Stockholders Equity	12.45B	12.70B	13.27B	12.32B	11.22B	10.49B
Cash Flow
Free Cash Flow	0.00	218.94M	-935.50M	104.97M	-31.15M	459.07M
Operating Cash Flow	0.00	651.46M	425.28M	614.11M	190.18M	584.25M
Investing Cash Flow	0.00	-642.30M	-1.06B	-606.08M	-192.21M	-188.50M
Financing Cash Flow	0.00	-145.78M	-143.83M	-166.70M	-137.15M	-110.28M

NKK SWITCHES CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4600.00
• 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:6943, the sentiment is Positive. The current price of 4600 is below the 20-day moving average (MA) of 4959.75, below the 50-day MA of 4762.70, and above the 200-day MA of 4475.63, indicating a bullish trend. The MACD of 124.88 indicates Negative momentum. The RSI at 73.00 is Negative, neither overbought nor oversold. The STOCH value of 100.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6943.

NKK SWITCHES CO., LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6763	80 Outperform	¥27.45B	17.28	―	3.16%	12.72%	53.85%
6894	76 Outperform	¥3.16B	7.86	―	3.92%	-1.32%	45.44%
6668	70 Outperform	¥16.92B	9.82	―	1.66%	12.23%	65.42%
6748	70 Outperform	¥10.83B	8.70	―	2.23%	―	―
6654	68 Neutral	¥5.95B	33.95	―	2.90%	-0.14%	-32.62%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6943	51 Neutral	¥4.29B	-34.55	―	1.79%	-10.43%	-368.47%