Nikon (7731) AI Stock Analysis

• Market Cap: ¥624.23B
• Dividend Yield: 2.88%
• Average Volume (3M): 1.94M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.80
• Revenue Growth: -3.24%
• EPS Growth: -65.77%
• Country: JP
• Employees: 19,444
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Leisure
• EPS (TTM): -281.31
• Shares Outstanding: 333,585,700
• 10 Day Avg. Volume: 1,878,420
• 30 Day Avg. Volume: 1,937,126
• PEG Ratio: -1.02
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 0.71
• P/FCF Ratio: -130.10
• 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: ¥1,796.19
• Price Target Upside: -10.06% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): -157.39
• Revenue Forecast (FY): ¥679.37B

• Rating: 48 Neutral
• Price Target: ¥1,830.00 ▼(-8.36% Downside)
• Action: Reiterated Date: 02/07/26
• Date: Action: Reiterated 02/07/26

The score is held back mainly by weak financial performance, driven by TTM losses and cash burn, despite a relatively supportive balance sheet. Technicals are mixed with modest longer-term support but limited near-term momentum, while valuation is also mixed: a reasonable dividend yield is offset by a negative P/E tied to current losses.

Positive Factors

Relative Balance Sheet Strength

Nikon's moderate leverage (debt-to-equity ~0.42) and substantial equity provide durable financial flexibility. This cushion helps fund R&D, capital equipment cycles, and working-capital needs during profit recoveries, reducing short-term refinancing risk while management works to restore operating profitability.

High Gross Margin

A ~41% gross margin signals sustained product-level pricing power and manufacturing efficiency in optics and precision equipment. This margin base supports long-term profitability potential: if operating cost trends are addressed, gross margin strength can translate to durable operating leverage and cash generation.

Diversified, Recurring Revenue Mix

Nikon's mix of consumer/professional imaging, high-value precision equipment, and installed-base service contracts creates recurring revenue and reduces reliance on single-product cycles. The installed base drives maintenance and parts income, smoothing revenue volatility across capital-expenditure and product refresh cycles.

Negative Factors

Weak Cash Generation

Recent negative operating cash flow and deep free-cash-flow deficits show Nikon is burning cash rather than generating it. Over months, persistent cash burn can deplete reserves, limit reinvestment in products and service infrastructure, and force greater reliance on debt or asset sales to fund operations.

Operating Loss and Negative Returns

The swing to an operating loss and sizable net loss signals structural pressure on core profitability. Persistent operating losses erode retained earnings, restrict capital for R&D and capex, and can necessitate cost restructuring; without a sustainable path back to operating profit, recovery risks becoming prolonged.

Weak Top-line and EPS Trends

Negative revenue growth and a dramatic EPS decline reflect demand softness and earnings volatility across segments. Over several months, this trend undermines scale economics, reduces internal funding for innovation, and increases pressure on margins and the balance sheet if product cycles and industrial orders don’t stabilize.

Nikon Business Overview & Revenue Model

Company Description

Nikon Corporation manufactures and sells optical instruments in Japan, North America, Europe, China, Thailand, and internationally. It operates through three segments: Imaging Products Business, Precision Equipment Business, and Healthcare Business. The Imaging Products Business segment develops, manufacture, sells, and services digital SLR cameras, compact digital cameras, and interchangeable camera lenses. The Precision Equipment Business segment provides FPD lithography systems and semiconductor lithography systems. The Healthcare Business segment offers biological microscopes, cell culture observation systems, and ultra-wide field retinal imaging devices. In addition, the company provides industrial microscopes, measuring instruments, non-contact 3D metrology systems, X-ray/CT inspection systems, and surveying instruments; and customized products, glass, encoders, and ophthalmic lenses. Further, it offers photomask substrates, camera components, sport optics products, and molded optical glasses; and develops and supports computer software. Nikon Corporation was incorporated in 1917 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nikon generates revenue primarily through the sale of its imaging products, including digital cameras, lenses, and related accessories. The Imaging Products segment is the largest revenue contributor, targeting both professional photographers and amateur enthusiasts. Additionally, the Precision Equipment segment, which includes the sale of lithography equipment for semiconductor manufacturing, represents a significant source of income, particularly as the demand for advanced technology in electronics grows. The Healthcare segment also contributes to revenue through the sale of medical imaging equipment. Nikon's strategic partnerships with key players in the tech and healthcare industries, alongside its investment in research and development, further enhance its market position and revenue potential. Seasonal promotions and the release of new products also play a critical role in driving sales throughout the year.

Nikon Financial Statement Overview

Summary

Overall fundamentals are pressured: TTM shows a swing to operating loss and a sizable net loss (income statement score 38) alongside sharply weaker cash generation with negative operating cash flow and deeply negative free cash flow (cash flow score 28). The balance sheet is comparatively steadier with moderate leverage (balance sheet score 64), but rising leverage and negative returns add risk if profitability does not recover.

Income Statement

Profitability has deteriorated meaningfully in TTM (Trailing-Twelve-Months), with a swing to an operating loss and a sizable net loss despite still-solid gross profit levels (~41% gross margin). Revenue has been broadly flat to slightly down recently (TTM revenue down ~1.3%, and FY2025 essentially flat), following stronger growth in FY2022–FY2024. The key concern is the sharp compression from gross profit to bottom-line results, indicating higher operating costs and/or significant non-operating pressures versus prior years when the company produced healthy positive margins.

Balance Sheet

The balance sheet remains a relative strength: leverage is moderate with debt-to-equity around 0.42 in TTM (Trailing-Twelve-Months) (up from ~0.24–0.30 in the prior two annual periods), and equity still represents a substantial capital base. However, returns have turned negative in TTM (Trailing-Twelve-Months), reflecting the recent loss and reducing the balance sheet’s earnings support. Overall financial flexibility looks acceptable, but the recent increase in leverage and negative returns are notable risks if profitability doesn’t recover.

Cash Flow

Cash generation weakened sharply in TTM (Trailing-Twelve-Months): operating cash flow is slightly negative and free cash flow is deeply negative, signaling meaningful cash burn. This contrasts with prior annual periods that showed positive operating cash flow (though free cash flow was often negative as well, indicating recurring investment or working-capital pressure). The main weakness is the lack of consistent free cash flow support and the recent move to negative operating cash flow, which increases reliance on the balance sheet if sustained.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	686.52B	715.28B	717.25B	628.11B	539.61B	451.22B
Gross Profit	281.05B	288.18B	310.05B	289.17B	236.07B	155.91B
EBITDA	-60.33B	52.57B	86.17B	85.64B	82.10B	-17.85B
Net Income	-87.35B	6.12B	32.57B	44.94B	42.68B	-34.50B
Balance Sheet
Total Assets	1.10T	1.11T	1.15T	1.05T	1.04T	989.74B
Cash, Cash Equivalents and Short-Term Investments	157.92B	163.59B	206.64B	212.58B	371.23B	352.98B
Total Debt	244.07B	193.57B	166.71B	134.02B	130.06B	134.07B
Total Liabilities	522.20B	471.29B	462.02B	431.92B	439.60B	451.01B
Stockholders Equity	576.22B	637.98B	683.79B	614.97B	597.68B	537.59B
Cash Flow
Free Cash Flow	-45.40B	-3.90B	-24.45B	-33.01B	7.53B	-18.13B
Operating Cash Flow	-6.17B	48.26B	30.77B	15.00M	31.35B	4.97B
Investing Cash Flow	-46.94B	-69.99B	-41.41B	-112.15B	-385.00M	18.02B
Financing Cash Flow	41.81B	-19.81B	-8.94B	-56.21B	-26.15B	-4.99B

Nikon Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1997.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7731, the sentiment is Positive. The current price of 1997 is above the 20-day moving average (MA) of 1948.15, above the 50-day MA of 1869.49, and above the 200-day MA of 1670.35, indicating a bullish trend. The MACD of 26.96 indicates Negative momentum. The RSI at 59.50 is Neutral, neither overbought nor oversold. The STOCH value of 88.77 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7731.

Nikon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7740	75 Outperform	¥175.48B	14.47	―	3.47%	-5.65%	-16.35%
7951	67 Neutral	¥586.34B	28.46	3.68%	2.35%	-4.47%	-4.52%
7944	63 Neutral	¥105.25B	49.27	―	4.78%	-1.25%	9.33%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7731	48 Neutral	¥624.23B	-7.53	1.29%	2.88%	-3.24%	-65.77%

Nikon Corporate Events

Nikon Takes Major Impairment Hit on Digital Manufacturing and Metal 3D Printing Assets

Nikon has booked substantial impairment losses in its digital manufacturing business, recognizing a total of ¥90.6 billion in impairment charges on goodwill and other non-financial assets in its consolidated accounts for the third quarter of the fiscal year ending March 31, 2026. The bulk of these impairments relate to a full write-down of goodwill and partial write-down of identifiable intangible assets at metal 3D printer subsidiary Nikon SLM Solutions AG, alongside additional write-downs of non-current assets at its U.S.-based additive manufacturing units and the parent company, reflecting reduced growth expectations and intensifying competition in the metal 3D printer market. In its non-consolidated financial statements under Japanese GAAP, Nikon also recorded extraordinary losses of ¥3.2 billion on non-current assets tied to the digital manufacturing business and an ¥84.4 billion loss on the valuation of SLM shares, though this valuation loss is eliminated at the consolidated level and does not affect group consolidated earnings, underscoring the financial strain and strategic recalibration in its push into additive manufacturing ahead of its next medium-term management plan.

The most recent analyst rating on (JP:7731) stock is a Hold with a Yen1852.00 price target. To see the full list of analyst forecasts on Nikon stock, see the JP:7731 Stock Forecast page.

Nikon Slashes Earnings and Dividend Outlook, Executives Forfeit Performance Pay

Nikon has sharply revised its consolidated forecast for the fiscal year ending March 31, 2026, now projecting a substantial operating loss and net loss instead of the modest profit previously expected, driven by weaker sales in its Imaging Products, Healthcare, and Digital Manufacturing businesses, along with impairment losses in Digital Manufacturing and inventory write-downs in its Precision Equipment segment. Reflecting the deterioration in earnings, the company has cut its full-year dividend forecast from ¥50 to ¥40 per share by reducing the expected year-end payout, and senior management, including the chairman/CEO and president/COO, will forgo bonuses and performance-based stock compensation to assume responsibility, signaling a more cautious capital return stance and heightened focus on accountability amid operational and market challenges.

The most recent analyst rating on (JP:7731) stock is a Hold with a Yen1852.00 price target. To see the full list of analyst forecasts on Nikon stock, see the JP:7731 Stock Forecast page.

Nikon Cuts Full‑Year Outlook as Profitability Deteriorates Across Core Businesses

Nikon reported consolidated financial data for the nine months ended December 31, 2025, showing group revenue of ¥512.6 billion and operating profit of ¥8.1 billion, both down sharply year on year, with the company revising its full‑year forecasts to lower revenue and a much deeper operating loss. While the Imaging Products business remained the main earnings driver with solid profitability, the Precision Equipment, Healthcare, and Components businesses showed weak or volatile performance, and corporate expenses stayed heavy, underscoring ongoing profitability pressure and execution risk across Nikon’s diversification strategy ahead of the March fiscal year‑end.

The most recent analyst rating on (JP:7731) stock is a Hold with a Yen1852.00 price target. To see the full list of analyst forecasts on Nikon stock, see the JP:7731 Stock Forecast page.

Nikon Swings to Heavy Loss and Cuts Forecasts While Trimming Group Structure

Nikon reported a sharp downturn for the nine months to December 31, 2025, with revenue falling 5.6% year-on-year to ¥483.9 billion and swinging to an operating loss of ¥103.6 billion, compared with a profit a year earlier, resulting in a net loss attributable to owners of ¥87.2 billion and negative basic earnings per share of ¥265.03. The company’s equity ratio declined to 52.4% from 57.4% at the previous fiscal year-end, and Nikon revised its full-year forecast to project continued weakness, guiding to a full-year operating loss of ¥100 billion, a net loss of ¥85 billion and a 5.6% revenue decline, while still planning to pay a reduced total annual dividend of ¥40 per share and streamlining its scope of consolidation by excluding Nikon Metrology NV and another subsidiary, signaling pressure on profitability and capital allocation but a continued commitment to shareholder returns.

The most recent analyst rating on (JP:7731) stock is a Hold with a Yen1852.00 price target. To see the full list of analyst forecasts on Nikon stock, see the JP:7731 Stock Forecast page.