Futaba Industrial Co., Ltd. (7241) AI Stock Analysis

• Market Cap: ¥104.97B
• Dividend Yield: 3.88%
• Average Volume (3M): 187.74K
• Price to Earnings (P/E): 7.3
• Beta (1Y): 1.20
• Revenue Growth: -7.35%
• EPS Growth: 43.31%
• Country: JP
• Employees: 10,690
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): N/A
• Shares Outstanding: 89,580,826
• 10 Day Avg. Volume: 171,230
• 30 Day Avg. Volume: 187,743
• PEG Ratio: -0.22
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.10
• P/FCF Ratio: 1.34K
• 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: ¥1,210.00
• Price Target Upside: 15.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: ¥1,277.00 ▲(21.97% Upside)
• Action: Downgraded Date: 10/23/25
• Date: Action: Downgraded 10/23/25

The overall stock score of 68 reflects a balance of moderate financial performance and positive technical indicators, supported by a fair valuation. The company's stable leverage and asset base are offset by declining revenue and profitability margins. The stock's reasonable P/E ratio and attractive dividend yield enhance its investment appeal.

Positive Factors

Stable leverage & equity base

A moderate debt-to-equity ratio (0.46) and a 37.47% equity ratio indicate a conservative capital structure and a solid equity base. This balance reduces financial risk, preserves borrowing capacity for capex or cyclical downturns, and supports multi-month resilience and strategic investment flexibility.

Strong operating cash generation

An operating cash flow to net income ratio of 3.99 shows operations generate substantially more cash than accounting earnings, underpinning working capital needs and debt servicing ability. Persistent operational cash conversion supports durable liquidity even if reported profits fluctuate.

Consistent EBITDA growth

Consistent EBITDA expansion signals underlying operational scalability and improving core earnings capacity. Even with margin pressure, sustained EBITDA growth provides a stable base for reinvestment, servicing obligations and cushioning cyclical industry swings over the medium term.

Negative Factors

Declining revenue and thin margins

Falling revenue combined with very low gross (6.47%) and net (0.88%) margins constrains internal funding for R&D, capex and wage inflation. Structural margin compression limits long-term profitability and competitiveness, making sustained growth and reinvestment more difficult over several quarters.

Weak free cash flow conversion

A free cash flow to net income ratio of 0.01 implies almost no conversion of accounting profits into discretionary cash. This weak FCF conversion hampers the company’s ability to fund dividends, pay down debt or invest organically without external financing, reducing financial flexibility long-term.

Low and falling ROE

A reduced ROE of 5.28% signals diminished efficiency in generating shareholder returns from equity. Persistently low ROE can indicate structural issues—weak margins or asset utilization—that limit shareholder value creation and may pressure capital allocation decisions across multiple quarters.

Futaba Industrial Co., Ltd. Business Overview & Revenue Model

Company Description

Futaba Industrial Co., Ltd. manufactures and sells automobile parts, office equipment parts, equipment for external sales, and agricultural equipment in Japan and internationally. The company offers automobile parts, such as exhaust systems and manifolds; exhaust heat recovery and diesel exhaust gas post-treatment devices; body frame parts and instrument panel reinforcements; front suspension sub-frames, trailing arms, rear axle beams, and engine undercovers; and fuel inlet pipes and canisters. It also provides paper feeding units; precision parts for copiers, multifunction copiers, printers, and digital printers, etc.; and assembly and welding equipment for automobile manufacturers. The company was incorporated in 1935 and is headquartered in Okazaki, Japan.

How the Company Makes Money

Futaba Industrial Co., Ltd. generates revenue primarily through the sale of automotive electronic components, which are essential for modern vehicle functionality and safety. The company's revenue model is driven by contracts with major automotive OEMs (Original Equipment Manufacturers), where it supplies specialized parts that meet stringent industry standards. Key revenue streams include the mass production of sensors and displays for vehicles, which are increasingly demanded due to the rise of electric and autonomous vehicles. Additionally, Futaba benefits from partnerships with technology firms to develop advanced automotive technologies. The company also diversifies its income by providing aftermarket services and components for both the automotive and industrial sectors, contributing further to its overall earnings.

Futaba Industrial Co., Ltd. Financial Statement Overview

Summary

Futaba Industrial Co., Ltd. shows moderate financial health with stable leverage and asset base. However, declining revenue and profitability margins, along with weakened cash flow efficiency, present challenges. The company needs to improve operational efficiencies and cash flow generation.

Income Statement

Futaba Industrial Co., Ltd. has shown inconsistency in revenue with a recent decline from the previous year. The gross profit margin for the latest year is modest at 6.47%, and net profit margin is relatively low at 0.88%. EBIT and EBITDA margins have also decreased, indicating pressure on operational efficiency. However, the company has managed consistent EBITDA growth over the years.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.46, suggesting a stable leverage position. The equity ratio is 37.47%, showing a solid equity base relative to total assets. Return on equity has decreased to 5.28%, indicating challenges in generating returns on shareholder investments. The balance sheet displays reasonable stability, though there is room for improvement in profitability.

Cash Flow

There is a substantial decline in free cash flow from the previous year, highlighting potential issues with cash generation. The operating cash flow to net income ratio is 3.99, suggesting strong cash generation from operations relative to net income. However, the free cash flow to net income ratio is low at 0.01, indicating minimal free cash flow generation relative to net income.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	684.57B	707.10B	795.80B	708.07B	572.12B	466.81B
Gross Profit	46.47B	45.79B	47.54B	33.01B	29.11B	29.37B
EBITDA	35.40B	37.16B	50.13B	38.99B	31.56B	32.53B
Net Income	6.45B	6.21B	12.83B	10.58B	3.31B	4.09B
Balance Sheet
Total Assets	301.75B	313.91B	334.78B	319.77B	309.49B	290.19B
Cash, Cash Equivalents and Short-Term Investments	22.75B	13.72B	25.03B	10.34B	6.73B	9.53B
Total Debt	56.98B	53.91B	60.02B	80.86B	97.28B	86.14B
Total Liabilities	178.60B	190.75B	203.88B	220.02B	219.47B	202.98B
Stockholders Equity	117.54B	117.62B	124.38B	94.07B	84.22B	77.64B
Cash Flow
Free Cash Flow	0.00	52.00M	41.65B	22.94B	846.00M	-1.86B
Operating Cash Flow	0.00	24.79B	57.37B	47.74B	35.47B	22.79B
Investing Cash Flow	0.00	-23.19B	-16.21B	-22.31B	-35.55B	-24.67B
Financing Cash Flow	0.00	-10.36B	-27.75B	-22.01B	-3.45B	1.75B

Futaba Industrial Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1047.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7241, the sentiment is Positive. The current price of 1047 is below the 20-day moving average (MA) of 1120.75, below the 50-day MA of 1087.90, and above the 200-day MA of 931.51, indicating a bullish trend. The MACD of 23.69 indicates Negative momentum. The RSI at 66.57 is Neutral, neither overbought nor oversold. The STOCH value of 80.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7241.

Futaba Industrial Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5970	85 Outperform	¥87.49B	9.02	―	4.95%	-5.89%	8.95%
6463	80 Outperform	¥93.79B	11.06	―	3.85%	-4.47%	29.68%
7250	78 Outperform	¥182.65B	10.97	―	1.03%	3.62%	3.64%
7292	72 Outperform	¥74.71B	11.57	―	3.21%	4.44%	14.91%
7241	68 Neutral	¥104.97B	7.32	―	3.88%	-7.35%	43.31%
5988	66 Neutral	¥44.37B	77.23	―	5.35%	-6.20%	-64.65%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Futaba Industrial Co., Ltd. Corporate Events

Futaba Industrial Halves Treasury Share Disposal for Employee Stock Incentive

Futaba Industrial has completed payment procedures for a disposal of treasury shares under its restricted stock incentive plan for the Futaba Employee Shareholding Association. The plan, originally approved in October 2025, is intended to grant restricted shares to employees participating in the association, aligning their interests with the company’s long-term performance.

Following confirmation of the number of employees who agreed to join the incentive plan, the company sharply reduced the allotment from 430,080 to 212,480 shares, cutting the total disposal value from approximately ¥413.7 million to about ¥204.4 million. The adjustment indicates lower-than-expected employee participation but still advances Futaba’s effort to strengthen internal share ownership and incentivize its workforce through equity-based compensation.

The most recent analyst rating on (JP:7241) stock is a Hold with a Yen1220.00 price target. To see the full list of analyst forecasts on Futaba Industrial Co., Ltd. stock, see the JP:7241 Stock Forecast page.

Futaba Industrial Divests Loss-Making Chinese Subsidiary to Refocus on Growth Areas

Futaba Industrial Co., Ltd. has decided to transfer all equity in its wholly owned Chinese subsidiary, Tianjin Shuang Shye Mechanical Industrial Co., Ltd., to Hong Kong-based Souzousha Company Limited. Tianjin Shuang Shye, established in 2002 to manufacture and sell automotive and other vehicle parts, has recently posted declining sales and significant net losses, eroding its net assets.

The move follows a recent capital increase at Tianjin Shuang Shye and reflects Futaba’s strategy to streamline group management by outsourcing the subsidiary’s liquidation procedures and reallocating resources to higher-growth business areas. While the transfer price is undisclosed and the financial impact for the year ending March 31, 2026 is still under review, the divestiture underscores Futaba’s intent to improve operational efficiency and refocus its portfolio amid profitability challenges at the Chinese unit.

The most recent analyst rating on (JP:7241) stock is a Hold with a Yen1194.00 price target. To see the full list of analyst forecasts on Futaba Industrial Co., Ltd. stock, see the JP:7241 Stock Forecast page.

Futaba Industrial to Appoint New President in Management Reshuffle

Futaba Industrial Co., Ltd. has announced planned changes to its top management, appointing operating officer Toshiyuki Hisatsune as representative director and president and promoting Toshio Yokota to representative director and vice president, while current president Yoshihiro Uozumi will retire from his representative director role. The leadership reshuffle, to take effect following shareholder approval at the June 2026 ordinary general meeting, is aimed at strengthening the company’s corporate management structure and may signal a renewed focus on production engineering and operational efficiency under a president with deep experience at both Toyota and Futaba.

The most recent analyst rating on (JP:7241) stock is a Hold with a Yen1194.00 price target. To see the full list of analyst forecasts on Futaba Industrial Co., Ltd. stock, see the JP:7241 Stock Forecast page.

Futaba Industrial Slashes Capital at Chinese Auto-Parts Subsidiary to Boost Efficiency

Futaba Industrial will reduce the capital of its wholly owned Chinese subsidiary, Dongguan Futaba Metal Products Co., Ltd., which manufactures and sells automotive and other vehicle parts in Dongguan, Guangdong, from USD 23.29 million to a planned USD 6.15 million, reflecting surplus funds and no expectation of major future investment needs. As a result of this move, the subsidiary’s share capital will fall below 10% of Futaba’s own capital and it will cease to be a specified subsidiary, although Futaba will retain its 100% equity interest; the company characterizes the step as a capital-efficiency measure with only minimal expected impact on consolidated results for the fiscal year ending March 31, 2026.

The most recent analyst rating on (JP:7241) stock is a Hold with a Yen1145.00 price target. To see the full list of analyst forecasts on Futaba Industrial Co., Ltd. stock, see the JP:7241 Stock Forecast page.

Futaba Industrial Raises Full-Year Sales Forecast on Better Business and FX Assumptions

Futaba Industrial Co., Ltd. has revised its consolidated full-year forecast for the fiscal year ending March 31, 2026, raising projected net sales from ¥650.0 billion to ¥666.0 billion, while leaving operating profit, ordinary profit, and profit attributable to owners of the parent unchanged at ¥16.0 billion, ¥16.0 billion, and ¥12.0 billion respectively. The upward revision to sales reflects improved recent business performance and updated foreign exchange rate assumptions, suggesting resilient demand and a more favorable currency environment, though the unchanged profit outlook indicates that cost pressures or margin constraints may limit the immediate earnings impact for shareholders and other stakeholders.

The most recent analyst rating on (JP:7241) stock is a Hold with a Yen1145.00 price target. To see the full list of analyst forecasts on Futaba Industrial Co., Ltd. stock, see the JP:7241 Stock Forecast page.

Futaba Industrial Injects Capital into Chinese Unit Ahead of Liquidation

Futaba Industrial will inject USD 20.5 million (about ¥3.1 billion) into its Chinese subsidiary Tianjin Shuang Shye Mechanical Industrial, raising the unit’s capital to USD 27 million and making it a specified subsidiary as its capital will exceed 10% of the parent’s. The move is aimed at eliminating excess liabilities at Tianjin Shuang Shye, which ceased production in 2025 following consolidation of operations into another Tianjin plant and is now being prepared for liquidation, and the company expects no material impact on consolidated financial results while it concurrently pursues capital optimization measures at other Chinese subsidiaries.

The most recent analyst rating on (JP:7241) stock is a Hold with a Yen1145.00 price target. To see the full list of analyst forecasts on Futaba Industrial Co., Ltd. stock, see the JP:7241 Stock Forecast page.

Futaba Industrial Lifts Profit Outlook Despite Lower Sales, Boosts Dividend Payout

Futaba Industrial reported consolidated net sales of ¥502.5 billion for the nine months ended 31 December 2025, down 4.6% year on year, but sharply improved profitability with operating profit up 36.9% to ¥13.6 billion and profit attributable to owners of parent surging nearly fourfold to ¥10.9 billion. The stronger earnings lifted basic earnings per share to ¥122.07, boosted comprehensive income and improved the equity ratio to 42.2% as net assets rose to ¥137.5 billion despite a slight decline in total assets. The company maintained its dividend policy with a planned annual payout of ¥40 per share for the year ending March 2026, above the previous year, and revised its full‑year forecast, now projecting lower sales of ¥666.0 billion but higher profits, including ordinary profit of ¥16.0 billion and a 93.3% jump in full‑year net profit to ¥12.0 billion, underscoring a continued focus on margin improvement and financial strengthening in a softer revenue environment.

The most recent analyst rating on (JP:7241) stock is a Hold with a Yen1145.00 price target. To see the full list of analyst forecasts on Futaba Industrial Co., Ltd. stock, see the JP:7241 Stock Forecast page.