Muro Corporation (7264) AI Stock Analysis

• Market Cap: ¥8.60B
• Dividend Yield: 3.54%
• Average Volume (3M): 4.56K
• Price to Earnings (P/E): 41.9
• Beta (1Y): 0.45
• Revenue Growth: -0.72%
• EPS Growth: -72.70%
• Country: JP
• Employees: 1,145
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 8.82
• Shares Outstanding: 6,546,200
• 10 Day Avg. Volume: 4,260
• 30 Day Avg. Volume: 4,560
• PEG Ratio: -0.24
• Price to Book (P/B): 0.33
• Price to Sales (P/S): 0.32
• P/FCF Ratio: -13.85
• 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: 70 Outperform
• Price Target: ¥1,562.00 ▲(16.83% Upside)

The overall stock score of 70 reflects a balanced view of Muro Corporation's strengths and challenges. The strong balance sheet and reasonable valuation are positive factors, but concerns about profitability and liquidity, along with overbought technical indicators, temper the outlook. Investors should monitor these areas for future developments.

Positive Factors

Strong balance sheet

Muro's low leverage and high equity ratio provide durable financial flexibility, lowering refinancing and solvency risk. This capital structure supports sustained investment in R&D or capex, enables absorbing demand shocks, and underpins long-term strategic options such as partnerships or selective acquisitions.

Healthy operating cash conversion

A healthy operating cash flow-to-net-income ratio indicates the business converts accounting profits into real cash, supporting working capital and supplier payments. Over the medium term this helps fund operations and stabilizes the business even if free cash flow is pressured by capex timing or one-off items.

R&D focus and industry partnerships

Ongoing R&D into sustainable adhesives/sealants and established partnerships expand product differentiation and distribution reach. Structurally, sustainability-driven demand in construction supports durable product adoption, improving prospects for repeat contracts and margin preservation versus commodity rivals.

Negative Factors

Negative free cash flow

Persistent negative free cash flow after capex constrains internal funding for growth, dividends, or debt reduction. Over months this raises dependence on external financing or equity, increasing execution risk for strategic initiatives and reducing cushion against cyclical downturns in construction demand.

Sharp revenue and EPS contraction

Severe declines in revenue and EPS indicate loss of scale and pricing or volume pressure. Such large contractions undermine long-term margin recovery, reduce reinvestment capacity, and imply structural demand or execution challenges that will take multiple quarters to correct without clear corrective plans.

Eroding profitability margins

Declining and volatile margins signal weakening cost control or adverse pricing power versus raw material and competitive pressures. Over the medium term this limits retained earnings, strains return on equity despite strong capital, and raises the bar for operational improvements to restore sustainable profitability.

Muro Corporation Business Overview & Revenue Model

Company Description

Muro Corporation manufactures and sells metal and resin-related parts in Japan. The company provides sprocket, cam pilot, gear ring, gear sun, angle sensor, gear sprocket, gear pulsar, and insert gear products. It also offers forged gear, rotor magnet end plate, adapter, and sprocket drive related products. The company serves vehicles, automobiles, electric bicycles, and industrial engine sectors. The company was formerly known as Muro-Kinzoku Kogyo Co, LTD. and changed its name to Muro Corporation in March 1990. The company was founded in 1953 and is headquartered in Tochigi, Japan.

How the Company Makes Money

Muro Corporation generates revenue through the sale of its construction materials and chemicals, targeting both domestic and international markets. The company's primary revenue streams include the production and distribution of adhesives and sealants for various construction applications. Additionally, Muro Corporation benefits from strategic partnerships with construction firms and suppliers, which enhance their market reach and provide opportunities for large-scale contracts. The company also invests in research and development to create innovative products that meet the evolving needs of the construction industry, thereby driving sales and increasing market share.

Muro Corporation Financial Statement Overview

Summary

Muro Corporation has a robust balance sheet with low leverage and strong equity financing, scoring 85. However, the income statement and cash flow statement highlight concerns, such as declining profitability margins and negative free cash flow, scoring 72 and 68 respectively. Overall, the financial performance is mixed, with strengths in financial stability but challenges in profitability and liquidity.

Income Statement

Muro Corporation's income statement shows a mixed performance. The gross profit margin has been relatively stable, indicating consistent cost management. However, the net profit margin has declined in recent years, suggesting challenges in converting revenue into profit. Revenue growth has been inconsistent, with a recent decline, which could be a concern for future profitability. The EBIT and EBITDA margins have also shown volatility, reflecting operational challenges.

Balance Sheet

The balance sheet of Muro Corporation is strong, with a solid equity base and a low debt-to-equity ratio, indicating financial stability. The return on equity has been moderate, showing efficient use of equity to generate profits. The equity ratio is high, suggesting a strong capital structure with a significant portion of assets financed by equity rather than debt.

Cash Flow

Cash flow analysis reveals some concerns with free cash flow, which has been negative in recent periods, indicating potential liquidity issues. The operating cash flow to net income ratio is healthy, showing good cash generation relative to reported profits. However, the free cash flow to net income ratio is weak, pointing to challenges in maintaining liquidity after capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.78B	22.59B	23.66B	21.84B	20.53B	18.97B
Gross Profit	4.01B	3.91B	4.55B	3.36B	4.01B	3.41B
EBITDA	1.97B	2.38B	3.46B	2.21B	3.37B	2.90B
Net Income	163.27M	486.28M	1.32B	291.52M	1.35B	974.70M
Balance Sheet
Total Assets	30.39B	30.49B	32.43B	28.05B	27.36B	26.75B
Cash, Cash Equivalents and Short-Term Investments	8.72B	8.59B	9.68B	7.23B	6.95B	8.08B
Total Debt	2.19B	2.39B	2.72B	1.92B	1.47B	2.64B
Total Liabilities	8.65B	8.42B	10.75B	8.32B	8.05B	8.96B
Stockholders Equity	21.74B	22.07B	21.68B	19.74B	19.31B	17.80B
Cash Flow
Free Cash Flow	0.00	-525.50M	1.39B	-598.14M	-91.94M	579.13M
Operating Cash Flow	0.00	677.70M	3.88B	1.06B	1.74B	2.78B
Investing Cash Flow	0.00	-1.39B	-2.17B	-1.48B	-1.34B	-1.74B
Financing Cash Flow	0.00	-705.31M	394.22M	159.06M	-1.55B	1.29B

Muro Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1337.00
• 50DMA: Positive
• 100DMA: Positive
• 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:7264, the sentiment is Positive. The current price of 1337 is below the 20-day moving average (MA) of 1413.10, below the 50-day MA of 1337.82, and above the 200-day MA of 1231.43, indicating a bullish trend. The MACD of 20.44 indicates Positive momentum. The RSI at 60.87 is Neutral, neither overbought nor oversold. The STOCH value of 44.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7264.

Muro Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7235	78 Outperform	¥15.16B	7.99	―	4.02%	2.31%	10.68%
7254	76 Outperform	¥16.94B	7.99	―	1.67%	-4.44%	-17.38%
7264	70 Outperform	¥8.60B	41.92	―	3.54%	-0.72%	-72.70%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7291	60 Neutral	¥8.57B	22.61	―	4.24%	-7.88%	-73.98%
7297	57 Neutral	¥6.21B	-10.55	―	3.44%	-7.72%	-311.30%
7277	56 Neutral	¥11.85B	34.51	―	2.23%	-4.06%	―