Toho Lamac Co., Ltd. (7422) AI Stock Analysis

• Market Cap: ¥2.47B
• Dividend Yield: 2.29%
• Average Volume (3M): 7.42K
• Price to Earnings (P/E): 140.6
• Beta (1Y): 0.34
• Revenue Growth: 0.04%
• EPS Growth: -64.31%
• Country: JP
• Employees: 162
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 13.69
• Shares Outstanding: 5,120,700
• 10 Day Avg. Volume: 3,670
• 30 Day Avg. Volume: 7,420
• PEG Ratio: -1.69
• Price to Book (P/B): 0.56
• Price to Sales (P/S): 0.56
• P/FCF Ratio: -2.66
• 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: 43 Neutral
• Price Target: ¥479.00 ▼(-4.20% Downside)

The score is driven primarily by weak financial performance, especially the sharp deterioration to negative operating and free cash flow alongside declining revenue and thin profitability. Technical indicators add a modestly negative signal (below key moving averages with negative MACD), while valuation remains a headwind due to the very high P/E despite a moderate dividend yield.

Positive Factors

Diversified end markets

Serving construction, automotive and electronics provides exposure across industrial end markets, lowering single-sector cyclicality. This breadth supports steadier long-term demand and allows the company to shift sales mix toward stronger sectors if one segment softens over a 2–6 month horizon.

Stable revenue channels via long-term contracts

Long-term client contracts and ability to command premium pricing for specialized aluminum products give predictable revenue streams and margin resilience. That structural contractual visibility improves cash planning and reduces short-term demand volatility for at least the next few quarters.

Moderate leverage and equity cushion

The balance sheet shows moderate leverage and substantial equity relative to assets, providing a cushion against cyclical shocks and financing flexibility. While D/E increased in 2025, the capital structure still offers room to access credit or absorb temporary losses without immediate solvency pressure.

Negative Factors

Multi-year revenue decline

Sustained revenue declines across several years indicate structural demand weakness or competitive pressure. Persistent top-line contraction reduces operating leverage, limits reinvestment capacity, and makes margin recovery and long-term growth more difficult absent successful product or market strategy changes.

Deteriorating cash generation

A swing to materially negative operating and free cash flow in 2025 undermines financial flexibility. Continued negative cash generation forces reliance on external financing, constrains capital expenditures and working-capital support, and raises solvency and refinancing risk if the trend persists.

Very thin profitability and weak returns

Extremely thin net margins and negative operating profit indicate weak pricing power or elevated costs, while near-zero ROE shows poor capital efficiency. Over time this erodes the ability to fund growth organically, weakens investor returns, and increases sensitivity to input-cost or demand shocks.

Toho Lamac Co., Ltd. Business Overview & Revenue Model

Company Description

Toho Lamac Co., Ltd. engages in the wholesale and retail of shoes. The company offers pumps, sandals, boots, rubber, sneakers, rain shoes, casual shoes, kids shoes, men's and women's shoes, genuine leather shoes, and safety boots; and accessories, such as bags, belts, and socks. The company was formerly known as Toho Rubber Industries Co., Ltd. and changed its name to Toho Lamac Co., Ltd. in January 1988. Toho Lamac Co., Ltd. was incorporated in 1958 and is based in Bunkyo, Japan.

How the Company Makes Money

Toho Lamac Co., Ltd. generates revenue primarily through the sale of its aluminum products and related services. The company has a robust revenue model that includes direct sales to end-users in various industries, as well as partnerships with distributors and manufacturers. Key revenue streams include bulk sales of raw aluminum materials, custom fabrication services, and specialized products tailored to specific industry requirements. Additionally, Toho Lamac benefits from long-term contracts with major clients, which provide a steady income stream. The company's focus on quality and innovation also allows it to command premium pricing for its specialized products, further enhancing its profitability.

Toho Lamac Co., Ltd. Financial Statement Overview

Summary

Financial quality is weak: multi-year revenue declines (2023–2025) and very thin profitability (~0.4% net margin with negative EBIT in 2025) are compounded by materially negative operating and free cash flow in 2025. The balance sheet is more supportive (moderate leverage), but rising debt-to-equity and very low returns on equity limit the cushion.

Income Statement

Performance remains pressured despite a rebound from 2023’s loss. Revenue has been declining for multiple years (2025: -4.4% YoY; 2024: -6.7%; 2023: -20.1%), pointing to a challenged demand/competitive backdrop. Profitability is thin: 2025 net margin is ~0.4% and EBIT is negative, a sharp step down from 2024’s modest profitability. Gross margin has held in the high-20% range recently, but the inability to convert that into consistent operating profit keeps earnings quality weak.

Balance Sheet

Leverage is moderate overall, with debt-to-equity generally in a reasonable range, though 2025 shows a notable debt increase (debt-to-equity rising to ~0.34 from ~0.17 in 2024). Equity remains sizable relative to assets, offering some balance sheet resilience. However, returns on equity are very low (near-zero in 2025 and only mid-single-digit in 2024), indicating the capital base is not being utilized efficiently and amplifying sensitivity if profitability weakens further.

Cash Flow

Cash generation is the key weakness. In 2025, operating cash flow turned materially negative and free cash flow was deeply negative, a major deterioration from the positive cash flow profile in 2023–2024. The trend is volatile across years (negative in 2022, positive in 2023–2024, then sharply negative in 2025), which raises concerns around working-capital swings and/or elevated investment needs. With earnings already thin, negative operating cash flow in the latest period reduces financial flexibility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.55B	4.76B	5.10B	6.38B	6.34B
Gross Profit	1.29B	1.43B	1.27B	1.49B	1.61B
EBITDA	109.78M	174.94M	-113.17M	33.61M	-173.79M
Net Income	17.48M	124.35M	-135.66M	-6.14M	-217.78M
Balance Sheet
Total Assets	6.71B	6.11B	5.96B	6.20B	6.41B
Cash, Cash Equivalents and Short-Term Investments	2.02B	1.89B	1.83B	1.41B	2.08B
Total Debt	1.53B	800.00M	800.00M	901.58M	1.00B
Total Liabilities	2.18B	1.44B	1.51B	1.70B	1.75B
Stockholders Equity	4.52B	4.67B	4.44B	4.50B	4.66B
Cash Flow
Free Cash Flow	-955.00M	71.77M	346.46M	-666.05M	143.46M
Operating Cash Flow	-482.10M	106.79M	384.80M	-654.17M	154.50M
Investing Cash Flow	-306.70M	9.95M	192.59M	235.79M	277.73M
Financing Cash Flow	672.10M	-55.19M	-155.93M	-158.13M	-59.80M

Toho Lamac Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 500.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7422, the sentiment is Negative. The current price of 500 is above the 20-day moving average (MA) of 495.15, below the 50-day MA of 509.16, and below the 200-day MA of 504.37, indicating a bearish trend. The MACD of -6.48 indicates Positive momentum. The RSI at 33.77 is Neutral, neither overbought nor oversold. The STOCH value of 31.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7422.

Toho Lamac Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3416	82 Outperform	¥2.11B	11.31	―	4.41%	-10.69%	-60.56%
7932	79 Outperform	¥39.83B	14.76	―	3.76%	-2.97%	18.38%
2668	76 Outperform	¥8.91B	12.67	―	2.33%	1.12%	33.94%
2666	67 Neutral	¥2.47B	8.16	―	1.92%	11.96%	30.75%
7938	67 Neutral	¥7.84B	17.78	―	2.91%	-2.87%	-19.37%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7422	43 Neutral	¥2.47B	140.61	―	2.29%	0.04%	-64.31%