KYB Corporation (7242) AI Stock Analysis

• Market Cap: ¥258.35B
• Dividend Yield: 2.87%
• Average Volume (3M): 141.50K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 0.82
• Revenue Growth: 3.95%
• EPS Growth: 136.86%
• Country: JP
• Employees: 13,634
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 167.20
• Shares Outstanding: 50,468,662
• 10 Day Avg. Volume: 193,280
• 30 Day Avg. Volume: 141,503
• PEG Ratio: -2.11
• Price to Book (P/B): 0.65
• Price to Sales (P/S): 0.33
• P/FCF Ratio: 5.45
• 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: 78 Outperform
• Price Target: ¥5,666.00 ▲(25.63% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by solid financial performance (improved margins and a stronger balance sheet) and strong technical uptrend signals, supported by attractive valuation (low P/E and moderate yield). Offsetting factors are choppy multi-year growth and weaker recent free-cash-flow conversion.

Positive Factors

Improving Profitability

Sustained margin improvement to ~7.7% operating and ~5.9% net indicates stronger pricing and cost control versus recent years. Durable margin expansion supports reinvestment, dividend capacity and resilience through cycles, improving long-term cash generation quality.

Stronger Balance Sheet

Material deleveraging (debt-to-equity ~0.45) provides financial flexibility and lowers default risk versus earlier periods. A healthier balance sheet supports capex, supplier/customer confidence and optionality for strategic investments or buffers during industry downturns.

Diversified End Markets

Sales across OEM, aftermarket and industrial hydraulic segments reduce single-market dependence. Aftermarket and industrial projects can smooth OEM cyclicality, giving a structural revenue mix that supports steadier utilization and long-term relationships with multiple customer channels.

Negative Factors

Cyclical, Uneven Growth

Multi-year revenue swings highlight exposure to automotive cycle and project timing. Uneven growth complicates capacity planning and investment returns, making long-term revenue forecasts uncertain and increasing the risk that capital deployment misaligns with demand troughs.

Weaker FCF Conversion

Declining FCF and conversion near half of net income indicate earnings are not fully translating into cash. That constrains organic funding for R&D, capex and payouts, and increases reliance on careful working-capital management to sustain investments and shareholder returns.

Returns Below Peak

While returns have recovered, ROE remains short of prior peaks, signaling profit normalization rather than breakout. This suggests structural pressures or competitive factors limiting margin upside and implies management must drive efficiency or mix shifts to regain prior return levels.

KYB Corporation Business Overview & Revenue Model

Company Description

KYB Corporation manufactures and sells automotive and hydraulic components, and other products worldwide. It offers automotive products, including shock absorbers, hydraulic power steering vane pumps, steering gearbox, motors, dual pinion systems, EPS actuators, and vane pumps; motorcycle components, such as power-regulated front fork and rear cushion unit, shock absorption, front fork, and steering dampers; and railroad equipment, such as caliper brakes, oil dampers, telescopic shock absorbers, suspension system, and automatic height adjustment and differential pressure valves. The company also provides aircraft components comprising actuators, accumulators, wheel brakes, reservoir modules, and reservoirs for space rockets; construction, industrial, and agricultural machinery products consisting of pumps, motors, cylinders, valves, arch cellular communication devices, and integrated HSTs; and special purpose vehicles, including concrete mixer trucks, granule carriers, and tilting drum mixing machines, as well as products for the environment, such as pruned tree shredder trucks, primary crushers, wood crushing type grinding machine, and wood pulverizer. In addition, it provides theater equipment comprising acoustic reflectors, rigging systems, and floor equipment; marine components consisting of stern cranes; and industrial machinery, including axial piston pumps, motion packages, oil and mini buffers, and gas springs. Further, the company offers sports and welfare products, such as chair ski shock absorbers, sports dampers, and vehicle kneeling down systems. The company was formerly known as Kayaba Industry Co., Ltd. and changed its name to KYB Corporation in October 2015. KYB Corporation was founded in 1919 and is headquartered in Tokyo, Japan.

How the Company Makes Money

KYB Corporation generates revenue through the sale of its hydraulic and automotive products, which are supplied to various industries worldwide. The company operates with a diversified revenue model, with significant income derived from both original equipment manufacturing (OEM) and aftermarket sales. OEM sales involve providing components directly to automotive manufacturers and industrial clients as part of their assembly processes, while aftermarket sales consist of replacement parts and accessories sold through distributors and retailers. Additionally, KYB engages in strategic partnerships with automotive manufacturers, which can enhance its market reach and secure long-term contracts that provide stable revenue streams. The company's emphasis on research and development also enables it to innovate and offer new products, contributing to its revenue growth.

KYB Corporation Financial Statement Overview

Summary

Financials are healthy overall: profitability has improved in TTM (operating margin ~7.7%, net margin ~5.9%), leverage is moderate and improved (debt-to-equity ~0.45), and operating/free cash flow are positive. The key risks are uneven multi-year revenue/earnings and weaker recent free-cash-flow conversion (FCF down ~13% TTM and ~52% of net income).

Income Statement

KYB shows solid profitability with TTM (Trailing-Twelve-Months) operating profitability at ~7.7% and net margin near ~5.9%, a clear improvement versus FY2025 net margin (~3.4%). Revenue is modestly higher in TTM (+~3.0%), but the multi-year pattern is uneven—strong growth in FY2022–FY2023 followed by flat to slightly down FY2024–FY2025—suggesting end-market cyclicality. Overall, margins are respectable for auto parts, but earnings and growth have been volatile across years.

Balance Sheet

Leverage looks controlled with TTM debt-to-equity around ~0.45, a meaningful improvement from FY2021 (~1.13) and better than FY2022 (~0.59). Equity has expanded over time, supporting balance-sheet resilience. Returns improved in TTM as well (return on equity ~11.8% vs ~6.6% in FY2025), though still below the peak levels seen in FY2022–FY2023, indicating profitability normalization.

Cash Flow

Cash generation is positive with TTM operating cash flow (~¥42.9B) and free cash flow (~¥20.5B). However, free cash flow declined in TTM (about -13%), and free cash flow is only about ~52% of net income in TTM, implying less efficient conversion of reported earnings into free cash. Cash flow has also been choppy year-to-year, even though recent absolute operating cash flow is stronger than earlier periods.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	469.48B	438.32B	442.78B	431.20B	388.36B	328.04B
Gross Profit	93.90B	82.64B	81.28B	85.25B	78.76B	60.31B
EBITDA	56.19B	40.59B	40.95B	50.88B	48.52B	37.75B
Net Income	30.34B	14.90B	15.82B	27.21B	22.55B	17.09B
Balance Sheet
Total Assets	498.47B	463.11B	476.53B	446.84B	434.19B	426.63B
Cash, Cash Equivalents and Short-Term Investments	50.45B	47.43B	46.64B	47.75B	54.87B	69.81B
Total Debt	109.36B	98.97B	101.14B	84.54B	90.86B	124.85B
Total Liabilities	247.69B	228.09B	250.12B	255.80B	273.27B	309.91B
Stockholders Equity	241.13B	225.54B	217.19B	182.83B	153.41B	110.68B
Cash Flow
Free Cash Flow	20.55B	26.80B	15.25B	12.29B	14.95B	9.58B
Operating Cash Flow	42.92B	43.85B	39.86B	23.91B	24.25B	20.83B
Investing Cash Flow	-28.06B	-34.13B	-23.50B	-13.52B	-10.87B	-6.28B
Financing Cash Flow	-8.24B	-9.10B	-15.03B	-20.18B	-32.71B	1.15B

KYB Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4510.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7242, the sentiment is Positive. The current price of 4510 is below the 20-day moving average (MA) of 4984.75, below the 50-day MA of 4715.00, and above the 200-day MA of 3916.55, indicating a bullish trend. The MACD of 168.03 indicates Negative momentum. The RSI at 60.21 is Neutral, neither overbought nor oversold. The STOCH value of 71.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7242.

KYB Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7242	78 Outperform	¥258.35B	7.94	12.15%	2.87%	3.95%	136.86%
7259	77 Outperform	¥2.06T	12.58	8.34%	2.03%	4.33%	524.86%
7282	75 Outperform	¥577.78B	13.50	8.26%	2.62%	1.44%	-0.92%
5991	74 Outperform	¥607.72B	14.07	―	2.60%	1.06%	-5.99%
7220	71 Outperform	¥202.90B	106.69	―	1.93%	-3.23%	24.93%
6473	63 Neutral	¥675.98B	27.40	2.51%	3.18%	0.44%	-11.36%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%