Naito & Co., Ltd. (7624) AI Stock Analysis

• Market Cap: ¥7.45B
• Dividend Yield: 2.78%
• Average Volume (3M): 17.78K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.34
• Revenue Growth: 1.08%
• EPS Growth: 82.69%
• Country: JP
• Employees: 330
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Distribution
• EPS (TTM): -0.02
• Shares Outstanding: 54,789,513
• 10 Day Avg. Volume: 15,640
• 30 Day Avg. Volume: 17,780
• PEG Ratio: -2.41
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 0.16
• P/FCF Ratio: 6.34
• 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: 59 Neutral
• Price Target: ¥151.00 ▲(8.63% Upside)
• Action: Reiterated Date: 06/27/25
• Date: Action: Reiterated 06/27/25

The overall stock score is primarily influenced by mixed financial performance and technical analysis suggesting an overbought condition despite bullish momentum. The valuation is moderate, with a fair P/E ratio and a decent dividend yield. Attention to financial efficiency and cash management is crucial for future stability.

Positive Factors

Balance Sheet Strength

A low-leverage balance sheet with consistent equity proportions gives the company durable financial flexibility to absorb cyclical demand swings in industrial end markets, support working-capital needs for distribution, and fund selective investments without stressing liquidity over the medium term.

Cash Conversion Efficiency

Efficient conversion of earnings into operating cash and recent free cash flow growth support ongoing inventory financing and supplier payments, enabling stable operations for a working-capital intensive distributor and providing capacity for steady capex or shareholder returns over the coming months.

Industrial Distribution Model

A focused trading/distribution model serving factory automation and industrial production benefits from structural demand as manufacturers modernize. Value-added procurement, logistics and service capabilities create customer stickiness and recurring order flows that support durable revenue streams.

Negative Factors

Revenue Decline

Declining top-line trends reduce operating leverage and limit the firm's ability to spread fixed distribution and logistical costs. For a distributor reliant on volume, continued revenue erosion can weaken supplier terms, constrain reinvestment, and impair long-term margin sustainability.

Margin Pressure

A falling net profit margin signals rising cost or pricing pressure that erodes returns on sales. Sustained margin compression reduces retained earnings for reinvestment into inventory or services, forcing either higher volumes to compensate or cost cuts that could harm service levels and competitiveness.

Free Cash Flow Volatility

Irregular free cash flow increases liquidity and planning risk for a working-capital heavy distributor. Volatility can lead to episodic funding needs, higher financing costs, or delayed supplier payments during tougher months, undermining long-term supplier/customer relationships and operational continuity.

Naito & Co., Ltd. Business Overview & Revenue Model

Company Description

Naito & Co., Ltd. (7624) is a prominent player in the Japanese manufacturing sector, specializing in the production and distribution of high-quality electrical and electronic components. The company operates in various sectors, including automotive, industrial machinery, and consumer electronics. Naito & Co. is known for its innovative solutions and commitment to quality, offering a diverse range of products such as connectors, sensors, and power supply units that cater to both domestic and international markets.

How the Company Makes Money

Naito & Co., Ltd. generates revenue primarily through the sale of its electrical and electronic components to various industries, including automotive and consumer electronics. The company employs a business-to-business (B2B) model, establishing long-term contracts with manufacturers and OEMs (original equipment manufacturers) that require reliable components for their products. Key revenue streams include direct product sales, custom solutions, and after-sales support services. Additionally, Naito & Co. benefits from strategic partnerships with technology firms and suppliers, which enhance its product offerings and market reach, thereby contributing to its overall earnings. Market demand for high-tech components and the ongoing trend towards automation and electrification in various industries also positively impact the company's financial performance.

Naito & Co., Ltd. Financial Statement Overview

Summary

Naito & Co., Ltd. demonstrates mixed financial performance. The income statement shows moderate profitability with a healthy EBITDA margin, but a decline in revenue and net profit margin. The balance sheet is strong, with low financial leverage and consistent equity levels. Cash flow reflects substantial fluctuations, indicating potential risks in cash management.

Income Statement

The income statement indicates moderate profitability with a stable gross profit margin and a slight decline in net profit margin over the years. Revenue growth has been inconsistent, with a notable decrease in the most recent year. The EBITDA margin remains healthy, suggesting efficient operational management, but the declining EBIT margin suggests rising operating costs or decreased operational efficiency.

Balance Sheet

The balance sheet reflects strong equity levels with a favorable debt-to-equity ratio, indicating low financial leverage and reduced risk. The equity ratio shows a consistent proportion of equity to total assets, reinforcing financial stability. Return on equity has decreased, highlighting a potential area for improvement in generating returns from equity capital.

Cash Flow

Cash flow analysis reveals substantial fluctuations in free cash flow, with notable growth in the most recent year. The operating cash flow to net income ratio suggests efficient cash conversion from operating activities. However, the inconsistency in free cash flow growth indicates volatility in cash management and capital expenditure that could pose risks.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	43.77B	43.55B	44.06B	44.46B	43.62B	39.15B
Gross Profit	5.35B	5.29B	5.41B	5.46B	5.00B	4.23B
EBITDA	910.00M	815.00M	801.00M	1.15B	829.00M	275.00M
Net Income	380.00M	314.00M	345.00M	732.00M	448.00M	274.00M
Balance Sheet
Total Assets	16.70B	17.28B	17.84B	17.24B	17.27B	16.54B
Cash, Cash Equivalents and Short-Term Investments	116.00M	113.00M	138.00M	186.00M	186.00M	188.00M
Total Debt	296.00M	73.00M	876.00M	356.00M	710.00M	458.00M
Total Liabilities	3.84B	4.36B	5.01B	4.58B	5.04B	4.66B
Stockholders Equity	12.85B	12.91B	12.83B	12.66B	12.22B	11.88B
Cash Flow
Free Cash Flow	0.00	1.08B	-84.00M	409.00M	87.00M	1.83B
Operating Cash Flow	0.00	1.16B	101.00M	442.00M	92.00M	1.85B
Investing Cash Flow	0.00	-158.00M	-452.00M	72.00M	-238.00M	-579.00M
Financing Cash Flow	0.00	-1.02B	300.00M	-518.00M	141.00M	-1.27B

Naito & Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 139.00
• 50DMA: Negative
• 100DMA: Negative
• 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:7624, the sentiment is Negative. The current price of 139 is above the 20-day moving average (MA) of 138.75, above the 50-day MA of 138.96, and above the 200-day MA of 134.83, indicating a neutral trend. The MACD of -0.74 indicates Positive momentum. The RSI at 42.44 is Neutral, neither overbought nor oversold. The STOCH value of 50.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7624.

Naito & Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3176	78 Outperform	¥47.63B	5.27	―	3.87%	2.66%	-11.41%
8103	67 Neutral	¥32.86B	14.30	―	4.05%	-3.82%	18.03%
7628	66 Neutral	¥28.21B	12.14	―	2.98%	-2.82%	48.74%
9902	64 Neutral	¥71.23B	15.26	―	3.17%	5.95%	23.97%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
9830	61 Neutral	¥151.54B	9.98	―	2.42%	9.74%	6.48%
7624	59 Neutral	¥7.45B	-1,902.95	―	2.78%	1.08%	82.69%