Nippon Sharyo (7102) AI Stock Analysis

• Market Cap: ¥53.40B
• Dividend Yield: 1.07%
• Average Volume (3M): 56.07K
• Price to Earnings (P/E): 4.8
• Beta (1Y): 1.09
• Revenue Growth: 6.01%
• EPS Growth: 49.59%
• Country: JP
• Employees: 2,263
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 199.04
• Shares Outstanding: 14,675,012
• 10 Day Avg. Volume: 32,350
• 30 Day Avg. Volume: 56,066
• PEG Ratio: 0.24
• Price to Book (P/B): 0.45
• Price to Sales (P/S): 0.30
• P/FCF Ratio: -21.28
• 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: 75 Outperform
• Price Target: ¥4,247.00 ▲(10.31% Upside)
• Action: Reiterated Date: 10/30/25
• Date: Action: Reiterated 10/30/25

Nippon Sharyo's stock is supported by strong technical momentum and attractive valuation metrics, suggesting potential for price appreciation. However, financial performance is moderate due to profitability and cash flow challenges, which slightly temper the overall outlook.

Positive Factors

Strong equity base

An equity ratio near 49.3% provides a durable capital buffer to absorb rail-project cycles, support bid/tender bonds and warranty reserves, and reduces reliance on short-term funding. This stability underpins the firm's ability to pursue long-duration rolling-stock contracts.

Improving revenue trend

A 9.4% year-over-year revenue rise suggests improving order intake or backlog conversion. Sustained top-line growth supports manufacturing scale, better utilization of facilities, and higher bargaining power with suppliers—important for multi-month rail build cycles and long-term contract competitiveness.

Healthy gross and operating margins

Gross margin of 15.3% and stable EBIT/EBITDA margins show disciplined cost control in manufacturing and engineering. These margins create a lasting earnings cushion to fund project execution, after-sales support and incremental R&D, supporting resilience through industry cycles.

Negative Factors

Negative free cash flow

A free cash flow deficit of ¥-1.38bn restricts the company's ability to self-fund working capital and capex tied to long manufacturing lead times. Persistent negative FCF elevates dependency on external financing and increases execution and liquidity risk for large, multi-stage contracts.

Weak cash conversion

An operating cash flow to net income ratio of 0.23 indicates earnings convert poorly into cash, likely from project timing, progress billings or working-capital swings. Poor conversion raises vulnerability to order delays, reduces internal funding for growth and heightens refinancing needs.

Moderate leverage

A debt-to-equity ratio of 0.56 reflects moderate leverage that can constrain financial flexibility for large upfront investments, warranty reserves or spikes in working capital during project ramps. Combined with modest margins, this limits strategic room for aggressive backlog expansion.

Nippon Sharyo Business Overview & Revenue Model

Company Description

Nippon Sharyo, Ltd. manufactures and sells railway rolling stock, transportation equipment, steel structures, construction equipment, and engineering equipment in Japan, the United States, Asia, and internationally. It offers EMUs, DMUs, passenger cars, linear motor cars, track maintenance machines, rolling stock components, and automated guideway transit systems; and inter-city and express vehicles, suburban and commuter vehicles, and metro and subway EMUs, as well as exports high speed trains, urban and suburban trains, and metro and light rail transit vehicles. The company also provides rubber-tired AGT vehicles, magnetic-levitating vehicles, hanging monorail vehicles, etc. for medium or small volume transportation; and light rail vehicles. In addition, it offers freight cars, locomotives, tank trucks, tank trailers, storage tanks, heavy-duty industrial vehicles, containers, automated guided vehicles, roadway bridges, railway bridges, and water gates. Further, the company provides pile driving rigs, crawler cranes, hydraulic hammers, casing rotators, portable diesel generator sets, emergency generators, and various products related to electric machines, as well as other products related to foundation work; earth drilling rigs, soil stabilizing rigs, and diesel generators; and agricultural plants, grain complex, seed processing plants, railway rolling stock inspection/maintenance system, and pulp and paper plants. Additionally, it constructs bridges; and offers paper-making equipment. The company was incorporated in 1896 and is headquartered in Nagoya, Japan. Nippon Sharyo, Ltd. is a subsidiary of Central Japan Railway Company.

How the Company Makes Money

Nippon Sharyo primarily makes money by manufacturing and selling rolling stock under customer contracts. Revenue is generated when the company wins orders from rail operators and other transportation-related customers to design and build railcars and trainsets; these projects typically include engineering/design work, fabrication, assembly, testing, and delivery. Earnings are therefore driven by (1) the volume and value of new rolling stock orders, (2) contract execution (ability to deliver on schedule and within cost), and (3) the mix of vehicles and specifications (which affects margins). The company may also generate revenue from ancillary manufacturing/engineering activities associated with transportation equipment where it supplies components or services tied to railcar production. Specific breakdowns of revenue by segment, named major customers/partnerships, and the extent of recurring aftermarket/maintenance revenue are null.

Nippon Sharyo Financial Statement Overview

Summary

Nippon Sharyo shows solid revenue growth and a strong equity base, but profitability metrics and cash flow generation need improvement. The net profit margin is moderate, and cash flow remains volatile, indicating room for enhancement in financial performance.

Income Statement

Nippon Sharyo has shown solid revenue growth with a 9.4% increase from 2024 to 2025. The gross profit margin for 2025 stands at 15.3%, indicating efficient cost management. However, the net profit margin is 6.7%, which is moderate and suggests potential for improvement in profitability. EBIT and EBITDA margins are 7.2% and 11.3% respectively, highlighting a stable operating performance though slightly lower than optimal for the industry.

Balance Sheet

The company maintains a strong equity base with an equity ratio of 49.3%, which is favorable for financial stability. The return on equity has improved to 9.9%, showing enhanced shareholder returns. However, the debt-to-equity ratio is 0.56, which, while not alarming, suggests a moderate level of leverage that should be monitored.

Cash Flow

Nippon Sharyo's cash flow from operations has improved in 2025 but remains volatile, with a free cash flow of -1.38 billion yen. The operating cash flow to net income ratio is 0.23, indicating room for improvement in cash conversion. The free cash flow to net income ratio also suggests underperformance in generating free cash flow relative to profits.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	98.16B	96.34B	88.06B	97.97B	94.02B	99.45B
Gross Profit	16.27B	15.84B	14.08B	12.54B	13.29B	16.07B
EBITDA	10.75B	9.44B	8.49B	7.17B	8.93B	11.69B
Net Income	7.21B	6.42B	5.38B	3.12B	5.23B	7.93B
Balance Sheet
Total Assets	132.82B	131.16B	136.40B	124.36B	132.87B	136.59B
Cash, Cash Equivalents and Short-Term Investments	3.51B	3.44B	3.91B	3.57B	29.31B	20.97B
Total Debt	34.39B	36.47B	39.54B	43.31B	54.06B	57.30B
Total Liabilities	66.98B	66.51B	74.17B	73.24B	84.85B	91.30B
Stockholders Equity	65.84B	64.65B	62.23B	50.96B	47.87B	45.15B
Cash Flow
Free Cash Flow	0.00	-1.38B	-4.51B	5.42B	11.95B	8.42B
Operating Cash Flow	0.00	1.45B	-2.48B	7.15B	14.51B	11.54B
Investing Cash Flow	0.00	-1.72B	-1.44B	-1.58B	-2.64B	-2.29B
Financing Cash Flow	0.00	-3.56B	-4.00B	-11.43B	-3.57B	-1.64B

Nippon Sharyo Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3850.00
• 50DMA: Negative
• 100DMA: Negative
• 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:7102, the sentiment is Negative. The current price of 3850 is below the 20-day moving average (MA) of 3952.50, below the 50-day MA of 3985.40, and above the 200-day MA of 3110.87, indicating a neutral trend. The MACD of -87.53 indicates Positive momentum. The RSI at 39.93 is Neutral, neither overbought nor oversold. The STOCH value of 51.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7102.

Nippon Sharyo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6648	79 Outperform	¥46.25B	13.08	―	2.74%	28.24%	239.81%
6016	75 Outperform	¥114.59B	19.34	―	0.55%	9.04%	-7.84%
7102	75 Outperform	¥53.40B	4.75	16.07%	1.07%	6.01%	49.59%
6018	73 Outperform	¥19.01B	20.01	―	2.78%	38.48%	100.84%
6023	71 Outperform	¥56.82B	10.14	11.47%	1.88%	-0.04%	15.59%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7122	57 Neutral	¥15.66B	8.10	―	2.02%	-19.01%	-66.73%

Nippon Sharyo Corporate Events

Nippon Sharyo Doubles Profit and Lifts Dividend Outlook on Strong Nine-Month Results

Nippon Sharyo reported solid earnings growth for the nine months ended 31 December 2025, with net sales edging up 1.3% year on year to ¥71.8 billion, while operating profit surged 58.2% to ¥7.3 billion and profit attributable to owners of the parent more than doubled to ¥8.6 billion, lifting basic earnings per share to ¥597.99. The company’s financial position also strengthened, as total assets rose to ¥139.2 billion and the equity ratio improved to 52.7%, supporting an increased dividend profile, with the annual payout for the year ending March 31, 2026 forecast at ¥40 per share versus ¥35 in the prior year; management kept its full-year guidance unchanged, targeting modest sales growth but double-digit gains in operating and ordinary profit, signaling confidence in sustained margin improvement and offering a supportive backdrop for shareholders.

The most recent analyst rating on (JP:7102) stock is a Hold with a Yen4246.00 price target. To see the full list of analyst forecasts on Nippon Sharyo stock, see the JP:7102 Stock Forecast page.