Forum Engineering, Inc. (7088) AI Stock Analysis

• Market Cap: ¥89.45B
• Dividend Yield: 3.51%
• Average Volume (3M): 79.22K
• Price to Earnings (P/E): 28.3
• Beta (1Y): 0.88
• Revenue Growth: 9.97%
• EPS Growth: 22.68%
• Country: JP
• Employees: 4,466
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): 16.21
• Shares Outstanding: 53,419,200
• 10 Day Avg. Volume: 58,120
• 30 Day Avg. Volume: 79,220
• PEG Ratio: 0.46
• Price to Book (P/B): 4.10
• Price to Sales (P/S): 1.53
• P/FCF Ratio: 14.38
• 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: 70 Outperform
• Price Target: ¥1,881.00 ▲(10.19% Upside)

Forum Engineering, Inc. receives a solid overall stock score due to its strong financial performance, characterized by robust revenue growth, profitability, and excellent cash flow generation. However, the technical indicators suggest the stock is overbought, and the high P/E ratio indicates potential overvaluation, which tempers the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and stability.

Cash Flow Generation

Strong cash flow generation enhances financial flexibility, enabling investment in growth opportunities and providing shareholder returns.

Balance Sheet Strength

Minimal reliance on debt financing ensures financial stability and reduces risk, allowing for sustainable growth and operational resilience.

Negative Factors

Valuation Concerns

High valuation metrics may limit future stock price appreciation and suggest potential overvaluation, impacting investor sentiment.

Market Overbought Signals

Overbought market conditions could lead to a price correction, affecting short-term investor confidence and stock performance.

Industry Competition

High competition in the industry may pressure margins and require continuous innovation to maintain market position and profitability.

Forum Engineering, Inc. Business Overview & Revenue Model

Company Description

Forum Engineering, Inc. (7088) is a specialized engineering firm that provides comprehensive solutions in the fields of mechanical, electrical, and structural engineering. The company operates across various sectors including aerospace, automotive, and construction, delivering high-quality design, consulting, and project management services. With a focus on innovation and technology integration, Forum Engineering aims to meet the unique needs of its clients through tailored engineering solutions and support.

How the Company Makes Money

Forum Engineering, Inc. primarily generates revenue through its engineering services, which include design, consulting, and project management. The company charges fees for its engineering expertise on a project-by-project basis, typically involving hourly billing or fixed-price contracts. Key revenue streams include contracts with government agencies, partnerships with private sector firms, and ongoing maintenance and support agreements. Significant partnerships with industry leaders enhance its market presence and contribute to a steady flow of projects, further driving revenue growth.

Forum Engineering, Inc. Financial Statement Overview

Summary

Forum Engineering, Inc. demonstrates impressive financial performance with strong revenue growth, solid profitability, a robust balance sheet, and excellent cash flow generation. The company maintains a low debt-to-equity ratio and high liquidity, ensuring financial stability and flexibility.

Income Statement

Forum Engineering, Inc. shows strong performance with a consistent increase in total revenue over the years, achieving a revenue growth rate of 10.89% from 2024 to 2025. The company maintains healthy profit margins, with a gross profit margin of 30.28% and a net profit margin of 8.31% in 2025. EBIT and EBITDA margins are also robust, at 12.11% and 13.54% respectively, indicating efficient cost management and operational effectiveness.

Balance Sheet

The balance sheet is solid, with a very low debt-to-equity ratio of 0.01, highlighting minimal reliance on debt financing. The equity ratio stands at 68.76%, indicating strong capitalization. Return on Equity (ROE) is a healthy 22.33%, showcasing effective use of equity to generate profits. The company's strong liquidity position is reinforced by high levels of cash and short-term investments, ensuring financial flexibility.

Cash Flow

The cash flow statement reflects excellent financial health, with a substantial increase in free cash flow by 19.25% from 2024 to 2025, supporting growth initiatives and shareholder returns. The operating cash flow to net income ratio of 1.38 suggests strong cash generation relative to accounting profits. Free cash flow to net income ratio of 1.28 further underscores the company's ability to generate cash efficiently.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	35.39B	34.69B	31.28B	28.75B	26.91B	27.73B
Gross Profit	10.67B	10.50B	9.14B	8.43B	7.89B	8.52B
EBITDA	4.72B	4.70B	3.42B	1.97B	2.28B	2.73B
Net Income	2.92B	2.88B	2.04B	1.16B	1.25B	1.34B
Balance Sheet
Total Assets	18.51B	18.78B	17.92B	17.70B	20.77B	20.89B
Cash, Cash Equivalents and Short-Term Investments	10.93B	11.63B	11.01B	10.60B	13.69B	14.30B
Total Debt	64.00M	96.00M	12.00M	2.00B	5.00B	5.00B
Total Liabilities	6.25B	5.61B	4.63B	5.73B	8.79B	8.82B
Stockholders Equity	12.02B	12.91B	12.97B	11.97B	11.97B	12.07B
Cash Flow
Free Cash Flow	0.00	3.69B	3.09B	1.02B	841.00M	2.21B
Operating Cash Flow	0.00	3.97B	3.30B	1.51B	1.46B	2.69B
Investing Cash Flow	0.00	110.00M	-1.08B	-594.00M	-838.00M	-373.00M
Financing Cash Flow	0.00	-2.97B	-2.77B	-4.21B	-1.41B	2.81B

Forum Engineering, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1707.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7088, the sentiment is Positive. The current price of 1707 is above the 20-day moving average (MA) of 1706.35, above the 50-day MA of 1486.02, and above the 200-day MA of 1212.12, indicating a bullish trend. The MACD of 56.53 indicates Positive momentum. The RSI at 87.23 is Negative, neither overbought nor oversold. The STOCH value of 61.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7088.

Forum Engineering, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2475	74 Outperform	¥30.91B	9.59	―	3.93%	1.22%	-5.35%
4318	72 Outperform	¥50.32B	16.35	―	3.69%	8.08%	-19.45%
4848	72 Outperform	¥58.43B	10.83	―	3.70%	3.47%	-0.05%
7088	70 Outperform	¥89.45B	28.30	―	3.51%	9.97%	22.68%
9164	67 Neutral	―	―	―	―	4.85%	-51.19%
2429	66 Neutral	¥46.95B	6.30	―	3.21%	15.79%	113.14%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Forum Engineering, Inc. Corporate Events

Forum Engineering Updates Tender Offer Notice Amid Regulatory Changes

Forum Engineering Inc. announced an amendment to the public notice regarding a tender offer initiated by KJ003 Co., Ltd. for its shares. The amendment follows regulatory feedback and changes in financial commitments, ensuring compliance with the Financial Instruments and Exchange Act. This revision does not alter the purchase conditions but updates the documentation to reflect recent developments.

KJ003 Co., Ltd. Launches Tender Offer to Acquire Forum Engineering Inc.

KJ003 Co., Ltd. has announced a tender offer to acquire all shares and share options of Forum Engineering Inc., a company listed on the Tokyo Stock Exchange Prime Market. This move is part of a strategic transaction to take Forum Engineering private, involving amendments to its Articles of Incorporation, capital restructuring, and a series of financial maneuvers aimed at consolidating control over the company.

Forum Engineering Plans Strategic Share Acquisition

Forum Engineering Inc. announced a plan to acquire its own shares through a tender offer, subject to certain conditions, including the effectiveness of a capital reduction. This move is part of a strategic transaction involving KJ003 Co., Ltd., which aims to acquire and manage Forum Engineering’s stock and share options. The transaction is expected to impact the company’s operations and industry positioning, with KKR, a major investment firm, playing a significant role in the process.

Forum Engineering Backs Tender Offer by KJ003 Co., Ltd.

Forum Engineering Inc. has announced that its board of directors has expressed support for a tender offer by KJ003 Co., Ltd. to acquire all of the company’s shares and share options, with plans to delist the company. This move is intended to make Forum Engineering a wholly-owned subsidiary of KJ003 Co., Ltd., which could significantly impact the company’s market positioning and shareholder value.

Forum Engineering Reports Strong Financial Results Amid Strategic Shift

Forum Engineering Inc. reported a significant increase in its financial performance for the first six months of the fiscal year ending March 2026, with net sales rising by 9% and profit attributable to owners of the parent increasing by 20.7% compared to the previous year. Despite the positive financial results, the company announced it will not pay dividends for the fiscal year due to a tender offer by KJ003 Co., Ltd., which will result in the delisting of the company’s shares, indicating a major shift in its market strategy and ownership structure.

Forum Engineering Ends Mid-Term Plan Early, Eyes Privatization for Growth

Forum Engineering Inc. has decided to terminate its mid-term management plan, ‘cognavi Vision2026,’ five months early due to the need for strategic initiatives to address management challenges. The company plans to proceed with privatization alongside KJ003 Corporation to ensure sustainable growth and enhance corporate value, foregoing the announcement of a new medium-term plan for now.

Forum Engineering Revises Dividend Forecast Amid Tender Offer

Forum Engineering Inc. announced a revision to its dividend forecast for the fiscal year ending March 31, 2026, deciding not to pay any interim or year-end dividends. This decision aligns with the planned tender offer by KJ003 Corporation, which aims to acquire all common shares and stock acquisition rights, potentially leading to Forum Engineering becoming a wholly owned subsidiary and its shares being delisted. The company has traditionally prioritized stable and growing dividends, but the tender offer’s terms necessitate this temporary suspension of dividends.