Nichiryoku Co., Ltd. (7578) AI Stock Analysis

• Market Cap: ¥1.98B
• Dividend Yield: N/A
• Average Volume (3M): 43.71K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.72
• Revenue Growth: -15.38%
• EPS Growth: N/A
• Country: JP
• Employees: 140
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Personal Products & Services
• EPS (TTM): -7.06
• Shares Outstanding: 17,393,505
• 10 Day Avg. Volume: 70,060
• 30 Day Avg. Volume: 43,713
• PEG Ratio: 0.04
• Price to Book (P/B): 0.47
• Price to Sales (P/S): 0.96
• P/FCF Ratio: -18.13
• 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: 44 Neutral
• Price Target: ¥111.00 ▼(-3.48% Downside)
• Action: Reiterated Date: 10/25/25
• Date: Action: Reiterated 10/25/25

Nichiryoku Co., Ltd. receives a low overall stock score due to significant financial challenges, including declining revenue and profitability, negative cash flows, and high leverage risks. The technical analysis indicates neutral to bearish momentum, and the valuation is unattractive with a negative P/E ratio and no dividend yield. These factors collectively contribute to a cautious outlook for the stock.

Positive Factors

Solid equity base

A healthy equity ratio provides a durable capital buffer to absorb losses and support operations during restructurings. That equity base can preserve creditor confidence and financing optionality, enabling longer runway for strategic turnarounds and investment without immediate insolvency risk.

Stable gross margin

A relatively stable gross margin indicates the core business still generates product-level profit, suggesting cost of goods and pricing retain structural integrity. This underpins potential recovery if SG&A and operating efficiencies are addressed, making margin restoration feasible over months.

Lower market volatility (Beta)

A below‑1 beta implies lower systematic volatility versus the market, supporting steadier access to capital and less sensitivity to market shocks. For long‑term planning, lower volatility reduces refinancing and strategic execution risk, aiding measured operational recovery efforts.

Negative Factors

Material revenue decline

Sustained double‑digit revenue contraction shrinks scale and weakens competitive position, raising unit cost burdens and reducing bargaining power with suppliers and distributors. Over several months this erodes operating leverage and makes profitable recovery more challenging without clear demand fixes.

Negative operating and free cash flow

Negative operating and free cash flow constrain the firm's ability to fund operations, capex, and debt service from internal sources. Persisting cash outflows force reliance on external financing or asset sales, which is structurally risky amid elevated leverage and weak earnings.

Negative profitability with leverage risk

Negative operating margins combined with moderately high leverage reduce financial flexibility and increase default risk. Poor profitability limits retained earnings, hindering deleveraging and making sustained investment or expansion difficult without material operational improvements or capital injections.

Nichiryoku Co., Ltd. Business Overview & Revenue Model

Company Description

Nichiryoku Co.,Ltd. engages in the funeral and cemetery businesses in Japan. It is involved in the construction, sale, and management of cemeteries; mining, design, manufacture, and sale of stone products and materials; planning and contracting of various rituals; and sale of funeral gifts and Buddhist altars, as well as the management of funeral operations. Nichiryoku Co.,Ltd. was founded in 1966 and is headquartered in Tokyo, Japan.

How the Company Makes Money

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Nichiryoku Co., Ltd. Financial Statement Overview

Summary

Nichiryoku Co., Ltd. shows a concerning financial performance with declining revenue, profitability, and negative cash flows. The company faces significant operational challenges, as evidenced by negative EBIT and EBITDA margins. While the balance sheet shows a solid equity base, high leverage poses financial risks. Urgent strategic measures are necessary to stabilize financial performance and improve cash flow generation.

Income Statement

Nichiryoku Co., Ltd. has experienced a significant decline in revenue and profitability, with a notable drop in net income from the previous year. The gross profit margin remains relatively stable, but the negative EBIT and EBITDA margins indicate operational inefficiencies. The company has faced challenges in maintaining revenue growth, and the current trajectory shows a concerning downward trend in income performance.

Balance Sheet

The company maintains a solid equity base compared to its total assets, indicated by a healthy equity ratio. However, the debt-to-equity ratio is moderately high, suggesting potential leverage risks. Despite these risks, the return on equity is negative due to the net loss, which impacts overall equity performance.

Cash Flow

Nichiryoku Co., Ltd. reports negative free cash flow, indicating cash outflows exceeding inflows from operations. The operating cash flow has turned negative, reflecting operational challenges. The free cash flow to net income ratio is unfavorable, suggesting inefficient cash generation relative to earnings.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.24B	2.85B	3.22B	2.98B	2.62B
Gross Profit	1.49B	1.92B	2.11B	2.04B	1.69B
EBITDA	-30.32M	361.44M	340.85M	412.99M	260.14M
Net Income	-271.01M	279.61M	118.06M	129.23M	-292.81M
Balance Sheet
Total Assets	7.48B	8.07B	8.91B	9.47B	9.74B
Cash, Cash Equivalents and Short-Term Investments	107.06M	282.91M	670.05M	1.13B	1.68B
Total Debt	2.22B	2.44B	3.30B	4.07B	4.84B
Total Liabilities	2.89B	3.21B	4.37B	5.15B	5.81B
Stockholders Equity	4.59B	4.86B	4.54B	4.31B	3.92B
Cash Flow
Free Cash Flow	-118.39M	83.33M	329.56M	319.53M	115.64M
Operating Cash Flow	-113.54M	90.71M	339.68M	336.86M	128.23M
Investing Cash Flow	152.50M	351.86M	280.52M	-181.00M	-662.91M
Financing Cash Flow	-214.80M	-829.71M	-663.15M	-521.76M	633.15M

Nichiryoku Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 115.00
• 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:7578, the sentiment is Negative. The current price of 115 is below the 20-day moving average (MA) of 117.85, below the 50-day MA of 120.42, and below the 200-day MA of 122.63, indicating a bearish trend. The MACD of -1.38 indicates Positive momentum. The RSI at 41.15 is Neutral, neither overbought nor oversold. The STOCH value of 28.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7578.

Nichiryoku Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4331	69 Neutral	¥10.17B	5.24	―	5.06%	0.36%	81.58%
6571	62 Neutral	¥18.01B	37.68	―	2.53%	4.71%	-0.41%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7372	57 Neutral	¥1.88B	1.82	―	―	8.17%	37.03%
9439	54 Neutral	¥2.74B	46.16	―	0.21%	-3.00%	-387.10%
4679	47 Neutral	¥2.59B	11.92	―	―	-6.45%	99.39%
7578	44 Neutral	¥1.98B	-4.38	―	―	-15.38%	―