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

• Market Cap: ¥4.04B
• Dividend Yield: 1.79%
• Average Volume (3M): 1.09K
• Price to Earnings (P/E): 7.2
• Beta (1Y): 0.53
• 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: ¥4,935.00 ▲(7.28% 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

Balance sheet strength

A high equity ratio and minimal debt give the company durable financial flexibility. This buffer reduces refinancing and solvency risk during downturns, supports funding of custom product builds and working capital, and permits selective investment without endangering liquidity.

Cash generation resilience

Consistent positive operating cash flow is a durable strength: it funds operations, modest capex, and shareholder payouts without relying on new debt. Even with prior variability, recent free cash flow improvement enhances the company’s ability to sustain operations and invest selectively.

Niche product mix and diversified end markets

A focused product portfolio serving multiple industrial and medical end-markets creates structural demand diversity and OEM stickiness. Catalog and custom switch offerings support long-term B2B relationships and recurring revenue from maintenance, replacements, and integration work.

Negative Factors

Declining revenue and margin pressure

Sustained revenue contraction and margin erosion are structural concerns: they reduce internal funding for R&D, capex, and customer support. Persistent negative margins weaken competitive positioning as price pressure or cost inflation limits ability to invest in product improvements or pursue new OEM contracts.

Negative return on equity from losses

Negative ROE signals the business is not generating adequate returns on capital. If losses persist, equity cushions erode, limiting strategic options and making it harder to finance growth or new product development without diluting shareholders or increasing leverage.

Earnings volatility

A dramatic EPS decline indicates volatile underlying profitability and unpredictable earnings. This undermines long-term planning, increases the risk of dividend cuts or underinvestment, and complicates securing capital for strategic initiatives if performance remains inconsistent.

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 makes money primarily by manufacturing and selling electromechanical switching and interface products to equipment makers and distributors. Revenue is generated from (1) product sales of switches (e.g., pushbutton, toggle, rocker, slide, rotary, keylock, and illuminated/display-related switch variants) supplied as standard catalog items and, where applicable, (2) custom or application-specific switch configurations produced to meet customer design, size, actuation, mounting, illumination, and electrical specification requirements. The company typically earns revenue on a per-unit basis through B2B channels, including direct sales to OEM/ODM customers and sales through electronics/industrial component distribution networks. Additional earnings may come from ancillary items bundled with switching solutions (such as caps, bezels, lenses, and related accessories) and from supplying higher value-added products where integration of illumination, indicators, or interface features increases average selling prices. Specific material details on major partnerships, customer concentration, pricing terms, or segment-level revenue breakdowns are null.

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	2.76B	3.66B	4.05B	3.66B	2.55B
EBITDA	7.13M	79.94M	692.30M	1.23B	1.08B	361.52M
Net Income	-444.11M	-404.09M	389.26M	826.28M	581.11M	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	167.30M
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	-700.27M	117.60M	-25.44M	479.23M
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: Positive
• RSI: Neutral
• STOCH: Positive

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 5011.00, below the 50-day MA of 4842.30, and above the 200-day MA of 4515.08, indicating a neutral trend. The MACD of 10.67 indicates Positive momentum. The RSI at 48.21 is Neutral, neither overbought nor oversold. The STOCH value of 18.93 is Positive, 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
6643	85 Outperform	¥28.05B	6.42	―	3.12%	6.60%	0.27%
5819	75 Outperform	¥12.70B	10.63	―	3.02%	3.43%	3.75%
6637	72 Outperform	¥53.74B	12.37	―	0.91%	5.28%	18.38%
6804	72 Outperform	¥139.49B	3.86	8.07%	2.64%	79.29%	35.48%
6748	70 Outperform	¥9.98B	8.62	―	2.23%	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6943	51 Neutral	¥4.04B	7.18	―	1.79%	-10.43%	-368.47%