Sigma Koki Co., Ltd. (7713) AI Stock Analysis

• Market Cap: ¥14.44B
• Dividend Yield: 2.77%
• Average Volume (3M): 23.84K
• Price to Earnings (P/E): 14.2
• Beta (1Y): 0.60
• Revenue Growth: 3.32%
• EPS Growth: 63.26%
• Country: JP
• Employees: 526
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): N/A
• Shares Outstanding: 7,552,628
• 10 Day Avg. Volume: 32,810
• 30 Day Avg. Volume: 23,840
• PEG Ratio: 0.23
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.83
• P/FCF Ratio: -130.78
• 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: 77 Outperform
• Price Target: ¥2,192.00 ▲(42.80% Upside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is driven primarily by strong financial quality (high revenue growth and an exceptionally strong, low-leverage balance sheet), tempered by weak cash flow conversion. Technicals are supportive due to a strong uptrend, but overbought readings raise near-term risk. Valuation is reasonable with a moderate P/E and a supportive dividend yield.

Positive Factors

Strong Revenue Growth

A 51% revenue surge demonstrates durable demand for Sigma Koki’s precision measurement and optical products across industries. Sustained top-line expansion supports scale, R&D investment and distribution expansion, underpinning multi-quarter organic growth potential.

Exceptionally Strong Balance Sheet

Minimal leverage and an 86.86% equity ratio give the company long-term financial flexibility. This capital structure supports steady investment in product development, capital equipment, and selective M&A while reducing insolvency risk through economic cycles.

Healthy Gross and Net Margins

Robust gross margins indicate pricing power and product differentiation in precision instruments. Combined with positive net margins, this margin structure supports reinvestment, after-sales services and sustainable profitability if cost control and product mix remain intact.

Negative Factors

Weak Cash Conversion

Operating cash generation is well below accounting profits and free cash flow is negative, a structural issue affecting reinvestment, dividends and debt-free growth. Persistent weak conversion suggests working capital or collection issues that can constrain long-term capital allocation.

Eroding Operating Margins

Declining EBIT/EBITDA margins point to rising input or operating costs or pricing pressure. If this trend persists it can erode the company’s profitability buffer, limiting funds for R&D and service expansion and reducing resilience to slower demand periods.

Moderate Return on Equity

ROE near 5.6% is modest given the strong capital base, implying limited capital efficiency. With an unusually high equity ratio, the company may under-deploy capital or face margin pressures, constraining long-term shareholder returns unless asset utilization improves.

Sigma Koki Co., Ltd. Business Overview & Revenue Model

Company Description

Sigmakoki Co., Ltd., together with its subsidiaries, provides optical equipment products in Japan. The company offers opto-mechanics/manual stages and holders, which include stages, holders, bases, rods, poles, clamps, cage systems stages, etc.; and optics/coating products, including multi-element optics, mirrors, beam splitters, filters, lenses, prisms, polarizers, laser crystals, nonlinear crystals, substrates, windows, etc. It also provides motion control application systems that comprise automatic positioning devices, optical measurement devices, and software for positioning and measurement; and laser system products, including optical modules, lens units, laser processing systems, laser application system products, etc. In addition, the company offers bio-medical related products, such as micromanipulation systems, motorized stage systems for microscope, core units for microscopy, bio and medical devices, etc.; and optical application system products consisting optical fiber alignment systems, optical systems for observation, and contracted and custom-made products. Sigmakoki Co., Ltd. was incorporated in 1977 and is headquartered in Hidaka, Japan.

How the Company Makes Money

Sigma Koki generates revenue primarily through the sale of its precision measurement instruments and optical equipment. The company’s revenue model is built on direct sales to businesses in industrial sectors, as well as through partnerships with distributors and resellers globally. Key revenue streams include the sale of laser measurement systems, optical sensors, and custom measurement solutions tailored to specific client needs. Additionally, Sigma Koki benefits from providing after-sales services, maintenance, and support, which contribute to recurring revenue. Strategic partnerships with technology firms and participation in industry-specific trade shows also enhance its market reach and drive sales.

Sigma Koki Co., Ltd. Financial Statement Overview

Summary

Strong overall fundamentals: rapid revenue growth (+51%) and solid profitability (37.35% gross margin, 8.51% net margin) supported by an exceptionally low debt-to-equity ratio (0.011) and high equity ratio (86.86%). The main offset is weak cash conversion, with low operating cash flow relative to net income (0.22) and negative free cash flow dynamics.

Income Statement

Sigma Koki Co., Ltd. demonstrates strong revenue growth with a 51% increase in the latest year, indicating robust demand for its products. The company maintains healthy profitability with a gross profit margin of 37.35% and a net profit margin of 8.51%. However, there is a slight decline in EBIT and EBITDA margins compared to previous years, which may suggest rising operational costs or pricing pressures.

Balance Sheet

The balance sheet is exceptionally strong, with a very low debt-to-equity ratio of 0.011, indicating minimal leverage and financial risk. The equity ratio stands at 86.86%, showcasing a solid capital structure. Return on equity is moderate at 5.58%, reflecting stable but not aggressive returns on shareholder investments.

Cash Flow

The cash flow statement reveals challenges, with a negative free cash flow growth rate and a free cash flow to net income ratio of -0.19, indicating cash flow issues. The operating cash flow to net income ratio is 0.22, suggesting that cash generation from operations is not fully covering net income, which could be a concern if it persists.

Breakdown	TTM	May 2024	May 2023	May 2022	May 2021	May 2020
Income Statement
Total Revenue	11.43B	11.58B	11.21B	11.37B	10.35B	8.77B
Gross Profit	4.28B	4.33B	4.28B	4.44B	4.08B	3.36B
EBITDA	1.54B	1.81B	1.38B	2.55B	1.96B	1.55B
Net Income	948.95M	986.02M	687.22M	1.49B	1.17B	822.65M
Balance Sheet
Total Assets	19.95B	20.34B	20.95B	20.63B	18.51B	17.24B
Cash, Cash Equivalents and Short-Term Investments	4.90B	5.88B	6.50B	6.92B	5.73B	5.34B
Total Debt	155.00M	204.14M	508.19M	818.25M	410.55M	659.73M
Total Liabilities	2.26B	2.57B	3.80B	4.30B	3.54B	3.37B
Stockholders Equity	17.59B	17.67B	17.05B	16.24B	14.88B	13.80B
Cash Flow
Free Cash Flow	0.00	-73.81M	129.14M	521.35M	786.58M	1.39B
Operating Cash Flow	0.00	379.92M	1.41B	983.00M	942.75M	1.58B
Investing Cash Flow	0.00	-418.34M	-1.46B	182.91M	-708.19M	-1.49B
Financing Cash Flow	0.00	-601.30M	-618.50M	-112.92M	-532.34M	-370.02M

Sigma Koki Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1535.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7713, the sentiment is Positive. The current price of 1535 is below the 20-day moving average (MA) of 1707.35, below the 50-day MA of 1611.58, and above the 200-day MA of 1461.49, indicating a bullish trend. The MACD of 81.69 indicates Negative momentum. The RSI at 77.18 is Negative, neither overbought nor oversold. The STOCH value of 86.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7713.

Sigma Koki Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7713	77 Outperform	¥14.44B	14.18	―	2.77%	3.32%	63.26%
6859	75 Outperform	¥87.47B	15.56	―	3.12%	2.78%	-5.32%
6863	75 Outperform	¥15.34B	12.05	―	5.39%	6.45%	26.58%
6853	73 Outperform	¥21.36B	20.67	―	2.93%	-1.58%	12.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6867	52 Neutral	¥1.95B	-103.18	―	3.02%	-0.26%	―
6864	51 Neutral	¥9.88B	-359.25	―	2.85%	10.27%	-106.32%