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

• Market Cap: ¥14.67B
• Dividend Yield: 2.77%
• Average Volume (3M): 23.84K
• Price to Earnings (P/E): 9.8
• 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: 82 Outperform
• Price Target: ¥2,400.00 ▲(56.35% Upside)
• Action: Reiterated Date: 03/06/26
• Date: Action: Reiterated 03/06/26

The score is driven primarily by strong financial quality (very low leverage and strong revenue growth) and an attractive valuation (low P/E plus dividend yield). Technicals add support via an uptrend above major moving averages with moderate momentum, while the main risk factor is weak cash flow conversion and negative free cash flow metrics.

Positive Factors

Revenue and margin strength

A 51% revenue increase alongside a 37.35% gross margin and 8.51% net margin indicates durable demand for Sigma Koki's photonics products and disciplined pricing. Sustainable top-line growth with healthy gross margins supports reinvestment in product development and maintains long-term profitability despite market cycles.

Very conservative balance sheet

An almost negligible debt-to-equity ratio (0.011) and an 86.86% equity ratio give Sigma Koki strong financial flexibility. Low leverage reduces refinancing and solvency risk, enabling the company to fund capex, R&D or withstand industry downturns without pressured external financing for the foreseeable horizon.

Diverse product and revenue streams

A mix of catalog optical parts, precision positioning equipment, bespoke systems and related services creates multiple durable revenue channels. Custom and service work typically command higher margins and customer stickiness, helping stabilize revenues across research and industrial cycles over months to years.

Negative Factors

Weak cash conversion / negative FCF

Negative free cash flow relative to net income and an OCF-to-net-income ratio of 0.22 show the company is not converting reported earnings into cash efficiently. Persisting weak cash conversion can constrain self-funding for capex, slow down product development, and limit flexibility to increase shareholder returns.

Softer operating margins

Declining EBIT/EBITDA margins suggest rising operating costs or pricing pressure in parts of the business. If this trend persists, it could erode the benefit of strong gross margins, compress long-term profitability and reduce funds available for strategic investments or margin-restoring initiatives.

Moderate returns on equity

A 5.58% ROE indicates only modest efficiency converting equity into profit. Combined with weak cash conversion, this suggests the company may underutilize capital or face pricing/cost headwinds, limiting its ability to generate higher sustained shareholder returns absent improvements in operating efficiency.

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 fundamentals overall: revenue grew 51% with healthy gross (37.35%) and net (8.51%) margins, and the balance sheet is exceptionally conservative (debt-to-equity 0.011; equity ratio 86.86%). The main offset is weak cash conversion (free cash flow to net income -0.19; operating cash flow to net income 0.22) plus slightly softer EBIT/EBITDA margins versus prior years.

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: Positive
• RSI: Neutral
• STOCH: Neutral

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 1985.40, below the 50-day MA of 1763.66, and above the 200-day MA of 1513.93, indicating a bullish trend. The MACD of 81.70 indicates Positive momentum. The RSI at 54.82 is Neutral, neither overbought nor oversold. The STOCH value of 33.73 is Neutral, 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	82 Outperform	¥14.67B	9.83	―	2.77%	3.32%	63.26%
6850	80 Outperform	¥28.67B	13.32	―	2.89%	6.15%	2.98%
7745	80 Outperform	¥71.59B	8.26	―	2.31%	6.50%	30.54%
6853	73 Outperform	¥19.27B	18.81	―	2.93%	-1.58%	12.24%
6874	72 Outperform	¥23.39B	7.23	―	2.84%	8.78%	16.25%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6858	59 Neutral	¥9.44B	16.72	―	2.45%	15.66%	-69.17%