Nakanishi (7716) AI Stock Analysis

• Market Cap: ¥229.78B
• Dividend Yield: 2.66%
• Average Volume (3M): 128.45K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.79
• Revenue Growth: 5.43%
• EPS Growth: -20.67%
• Country: JP
• Employees: 2,180
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Instruments & Supplies
• EPS (TTM): -102.55
• Shares Outstanding: 92,218,200
• 10 Day Avg. Volume: 125,180
• 30 Day Avg. Volume: 128,446
• PEG Ratio: 0.54
• Price to Book (P/B): 1.45
• Price to Sales (P/S): 2.04
• P/FCF Ratio: 13.51
• 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: ¥3,200.00
• Price Target Upside: 61.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 127.92
• Revenue Forecast (FY): ¥86.29B

• Rating: 63 Neutral
• Price Target: ¥2,710.00 ▲(36.80% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by solid underlying financial strength (strong balance sheet and cash generation) but is held back by the 2025 net loss and valuation uncertainty (negative P/E). Technicals remain in an uptrend, yet extreme overbought signals reduce the near-term technical score.

Positive Factors

Balance Sheet Strength

Substantial equity and moderate leverage (debt/equity ~0.23 in 2025) give Nakanishi financial flexibility to withstand cycles, fund capex or buybacks, and support distributors. This durable cushion lowers solvency risk and supports long-term investment and service commitments.

Cash Generation

Rising operating and free cash flow provide repeated internal funding for R&D, aftermarket support, and dividends. Persistent cash generation supports capital allocation flexibility, funds installed-base servicing, and reduces dependence on external financing over multiple years.

Recurring Revenue and Multi‑Year Growth

Multi-year top-line growth combined with a business model that sells equipment plus consumables/accessories builds a durable installed base and repeat aftermarket revenue. This diversifies revenue streams across medical and industrial end markets, supporting steady demand and margin resilience.

Negative Factors

2025 Net Loss / Below‑the‑Line Risk

A net loss despite positive operating profit signals material below‑the‑line items (non‑operating charges, taxes or one‑offs) that undermine earnings consistency. Persistent below‑the‑line volatility can curtail retained earnings, constrain dividends, and complicate long‑term planning.

Rising Debt Pace

Notable debt growth over 2024–2025 raises the risk that leverage could rise faster than earnings recover. If revenue or margins falter, higher debt servicing needs would erode free cash flow and limit strategic options, making future refinancing or cost control more urgent.

Free Cash Flow Volatility

Volatile free cash flow and inability to fully offset the net loss in 2025 point to earnings quality or working‑capital swings. Persistent FCF variability would reduce predictability for reinvestment, service expansion, and shareholder returns over the medium term.

Nakanishi Business Overview & Revenue Model

Company Description

Nakanishi Inc. manufactures and sells dental, industrial, and medical products worldwide. The company offers turbines; clinical micromotors; contra-angles; and built-in, mobile dentistry, oral hygiene, endodontic, surgical, dental laboratory, and hygiene and maintenance products. It also offers motor spindles, and micro gridlers and tools. The company serves automotive, micromechanics, electronics, medical, die/mold, aerospace, and energy industries. Nakanishi Inc. was founded in 1930 and is headquartered in Kanuma, Japan.

How the Company Makes Money

Nakanishi generates revenue primarily through the sale of its precision tools and instruments, which are in high demand in the dental and medical sectors. The company’s revenue model is multifaceted, including direct sales to healthcare providers and distributors, as well as partnerships with medical and dental equipment suppliers. Key revenue streams include sales from dental handpieces, surgical equipment, and industrial cutting tools. Additionally, Nakanishi may benefit from ongoing service contracts, maintenance agreements, and training programs for its products, which provide a steady source of recurring income. Strategic collaborations with industry leaders and participation in global trade fairs further enhance their market reach and contribute to revenue growth.

Nakanishi Financial Statement Overview

Summary

Revenue growth over the multi-year period is strong, the balance sheet is healthy with moderate leverage, and recent operating/free cash flow is robust. However, the 2025 swing to a net loss despite positive operating profit raises earnings stability and below-the-line risk, tempering the overall financial score.

Income Statement

Revenue has grown solidly over the period (from ~33.1B in 2020 to ~81.2B in 2025), but growth slowed materially in 2024 and re-accelerated modestly in 2025. Profitability metrics were strong historically (healthy gross and operating margins), but the most recent year shows a sharp deterioration with net income turning negative in 2025 despite still-positive operating profit—suggesting below-the-line pressure and elevated earnings volatility. Overall, the top-line trajectory is constructive, but the swing to a net loss meaningfully weakens quality and consistency of earnings.

Balance Sheet

The balance sheet remains a clear strength with substantial equity relative to assets and manageable leverage. While debt increased notably in 2024–2025, debt relative to equity is still moderate (about 0.23 in 2025), indicating capacity to absorb cyclical pressure. The key watch item is the pace of debt build versus earnings power, especially after the 2025 loss, but overall financial flexibility appears solid.

Cash Flow

Cash generation is strong and improving in absolute terms, with operating cash flow rising to ~16.6B and free cash flow to ~12.3B in 2025. Free cash flow has been volatile (notably weak in 2022–2023 versus later rebound), but the recent trend is favorable and supports resilience. A caution flag is that in 2025 free cash flow did not fully offset the reported net loss, implying earnings quality/noise and potential working-capital or non-operating effects; still, the business is producing meaningful cash.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	77.67B	81.18B	77.04B	59.69B	48.67B	44.86B
Gross Profit	43.93B	44.59B	44.42B	36.09B	31.22B	27.30B
EBITDA	18.57B	19.90B	19.59B	32.30B	19.40B	15.80B
Net Income	5.06B	-2.40B	8.58B	22.80B	12.47B	10.10B
Balance Sheet
Total Assets	153.77B	160.16B	158.30B	140.71B	102.15B	94.46B
Cash, Cash Equivalents and Short-Term Investments	47.81B	62.80B	47.11B	32.65B	36.18B	37.41B
Total Debt	20.57B	26.77B	18.73B	11.67B	480.80M	100.00M
Total Liabilities	36.47B	46.08B	37.10B	27.51B	11.13B	11.54B
Stockholders Equity	117.30B	114.07B	121.19B	113.19B	91.02B	82.92B
Cash Flow
Free Cash Flow	0.00	12.26B	10.05B	2.60B	3.78B	9.62B
Operating Cash Flow	0.00	16.65B	15.30B	8.56B	7.76B	11.97B
Investing Cash Flow	0.00	-8.68B	-7.94B	-19.15B	-6.31B	-4.15B
Financing Cash Flow	0.00	679.15M	598.51M	3.41B	-6.11B	-3.97B

Nakanishi Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1981.00
• 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:7716, the sentiment is Positive. The current price of 1981 is below the 20-day moving average (MA) of 2435.10, below the 50-day MA of 2205.29, and below the 200-day MA of 2022.60, indicating a bullish trend. The MACD of 145.61 indicates Negative momentum. The RSI at 89.64 is Negative, neither overbought nor oversold. The STOCH value of 96.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7716.

Nakanishi Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7730	71 Outperform	¥165.12B	33.41	―	2.73%	5.10%	-26.13%
7979	69 Neutral	¥66.98B	15.73	―	2.83%	3.69%	1.86%
7747	68 Neutral	¥893.08B	50.74	10.09%	0.82%	13.53%	-7.39%
7716	63 Neutral	¥229.78B	-95.13	5.66%	2.66%	5.43%	-20.67%
8086	62 Neutral	¥259.41B	17.06	4.38%	2.03%	6.04%	733.13%
7733	60 Neutral	¥1.68T	20.24	13.13%	1.01%	0.42%	34.76%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Nakanishi Corporate Events

Nakanishi Maintains Board Lineup, Adds New Outside Auditor for 2026

Nakanishi Inc. has announced a slate of six director candidates, all standing for reappointment as their current terms expire, to be voted on at the 74th Annual General Meeting of Shareholders on March 30, 2026. The proposed board lineup maintains existing leadership, including President and Group CEO Eiichi Nakanishi and other internal and outside directors, signaling continuity in governance and strategic direction.

The company is also proposing the appointment of certified public accountant Hironao Yazaki as a new outside corporate auditor, replacing outgoing auditor Yuji Sawada upon expiration of his term. This refresh in the audit function, while preserving the rest of the oversight structure, suggests a calibrated approach to strengthening financial governance and independent monitoring without disrupting the existing management framework.

The most recent analyst rating on (JP:7716) stock is a Hold with a Yen2222.00 price target. To see the full list of analyst forecasts on Nakanishi stock, see the JP:7716 Stock Forecast page.

Nakanishi Launches ¥2.5 Billion Share Buyback to Boost Shareholder Returns

Nakanishi Inc. has authorized a share repurchase program under Japan’s Companies Act, approving the buyback of up to 1.5 million common shares, or about 1.81% of its outstanding shares excluding treasury stock. The maximum total cost of the repurchase is set at ¥2.5 billion, with purchases to be executed between February 13 and December 30, 2026.

The company cites the goal of enhancing shareholder returns and preserving flexibility in capital policy amid changes in the business environment as key reasons for the buyback. With roughly 83 million shares outstanding and over 10 million shares already held in treasury, the additional repurchase could modestly tighten the share float and signal management’s confidence in its financial position and future prospects, potentially supporting shareholder value.

The most recent analyst rating on (JP:7716) stock is a Hold with a Yen2222.00 price target. To see the full list of analyst forecasts on Nakanishi stock, see the JP:7716 Stock Forecast page.

Nakanishi Takes ¥13.8 Billion Goodwill Hit as DCI Tariffs Drag, Despite Beating FY2025 Forecasts

Nakanishi Inc. reported that net sales, EBITDA, operating profit and ordinary profit for the year ended December 31, 2025 exceeded earlier forecasts, supported by steady performance in its Dental, DCI, Surgical and Industrial segments and a weaker yen. However, profit attributable to owners of parent fell short of projections after the company booked a ¥13.8 billion impairment loss on goodwill, following a profitability decline at U.S. subsidiary DCI International caused by U.S. government tariff policies.

The goodwill impairment reflects a downward revision in DCI International’s business plan after profit margins deteriorated and performance lagged initial expectations. While the core businesses are performing solidly, the sizeable non-cash charge underscores the earnings sensitivity of recent overseas acquisitions to policy and market shifts, with implications for Nakanishi’s capital efficiency and future M&A strategy.

The most recent analyst rating on (JP:7716) stock is a Hold with a Yen2222.00 price target. To see the full list of analyst forecasts on Nakanishi stock, see the JP:7716 Stock Forecast page.

Nakanishi Swings to Loss but Lifts Dividend and Forecasts Earnings Rebound

Nakanishi reported consolidated net sales of ¥81.2 billion for fiscal 2025, up 5.4% year on year, while operating and ordinary income slipped 3.5% and 2.0% respectively. The company swung to a net loss attributable to owners of ¥2.4 billion, compared with a ¥8.6 billion profit a year earlier, as its equity ratio declined from 76.3% to 71.0% amid lower net assets.

Despite the loss, Nakanishi lifted its annual dividend for 2025 to ¥54 per share from ¥52 and is guiding a further increase to ¥60 in 2026, signaling confidence in its cash flow and balance sheet. For 2026, the company forecasts net sales to rise to ¥88.2 billion and operating income to ¥15.6 billion, with a recovery to ¥10.9 billion in profit attributable to owners, implying a sharp rebound in earnings per share and an ongoing commitment to shareholder returns.

The most recent analyst rating on (JP:7716) stock is a Hold with a Yen2222.00 price target. To see the full list of analyst forecasts on Nakanishi stock, see the JP:7716 Stock Forecast page.

Nakanishi Completes ¥2.9 Billion Share Buyback Below Authorized Limit

Nakanishi Inc. has announced the status and completion of a share repurchase program authorized by its board of directors on February 12, 2025, under the Companies Act of Japan. Against a maximum authorization of 2,000,000 shares and up to ¥3.0 billion through December 30, 2025, the company ultimately repurchased 1,416,300 shares for a total cost of approximately ¥2.93 billion, with no additional shares acquired in the final December 1–30, 2025 window. The completed buyback, representing 2.37% of outstanding shares at maximum authorization, signals an effort to deploy capital toward shareholder returns and may modestly enhance earnings per share and capital efficiency, underscoring management’s confidence in the company’s financial position and long‑term prospects.

The most recent analyst rating on (JP:7716) stock is a Hold with a Yen2222.00 price target. To see the full list of analyst forecasts on Nakanishi stock, see the JP:7716 Stock Forecast page.

Nakanishi to Cancel 1.2 Million Treasury Shares to Tighten Capital Base

Nakanishi Inc. has resolved to cancel 1,200,000 treasury shares, equivalent to 1.28% of its outstanding shares prior to the move, with the cancellation scheduled for January 30, 2026. Following the transaction, the total number of issued shares will decline to 92,218,200, while remaining treasury shares will stand at 9,173,418, or 9.95% of issued shares, a capital measure that effectively tightens the share float and may enhance capital efficiency and shareholder value by reducing overall supply and signaling management’s confidence in the company’s prospects.

The most recent analyst rating on (JP:7716) stock is a Hold with a Yen2222.00 price target. To see the full list of analyst forecasts on Nakanishi stock, see the JP:7716 Stock Forecast page.

Nakanishi Inc. Updates on Share Repurchase Program

Nakanishi Inc. announced the status of its share repurchase program, with 1,416,300 shares repurchased at a cost of JPY 2,926,825,900 as of November 30, 2025. The program aims to repurchase up to 2,000,000 shares by the end of December 2025, reflecting the company’s strategic financial management and potential impact on shareholder value.

The most recent analyst rating on (JP:7716) stock is a Hold with a Yen2222.00 price target. To see the full list of analyst forecasts on Nakanishi stock, see the JP:7716 Stock Forecast page.