Endo Manufacturing Co., Ltd. (7841) AI Stock Analysis

• Market Cap: ¥11.06B
• Dividend Yield: 3.31%
• Average Volume (3M): 18.53K
• Price to Earnings (P/E): 18.5
• Beta (1Y): 0.61
• Revenue Growth: 3.14%
• EPS Growth: -40.34%
• Country: JP
• Employees: 1,214
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Leisure
• EPS (TTM): -4.02
• Shares Outstanding: 9,441,800
• 10 Day Avg. Volume: 18,030
• 30 Day Avg. Volume: 18,533
• PEG Ratio: -0.37
• Price to Book (P/B): 0.45
• Price to Sales (P/S): 0.57
• P/FCF Ratio: -65.22
• 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: 62 Neutral
• Price Target: ¥1,278.00 ▲(0.95% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily supported by a very strong, low-debt balance sheet and reasonable income-based valuation with a solid dividend yield. Offsetting this are weakening profitability and volatile/negative latest-year free cash flow, alongside weak technicals with the price below key moving averages.

Positive Factors

Very low leverage / strong balance sheet

Extremely low leverage and rising equity give durable financial flexibility. This reduces default risk during auto-cycle downturns, allows funding of capex or working-capital needs internally, and supports dividends or selective investments without reliance on external financing.

Consistent revenue growth (2021–2025)

Multi-year top-line growth indicates stable demand and execution on vehicle programs. Sustained revenue expansion supports scale economies, better fixed-cost absorption, and positions the company to recover margins if cost pressures ease, underpinning medium-term operating resilience.

Operating cash flow generally positive

The company has historically converted profits into operating cash, giving it the ability to self-fund routine capex and support dividends in normal years. Positive OCF is a structural strength, even if recent volatility requires monitoring of consistency.

Negative Factors

Margin compression and earnings decline

Material margin compression and a sharp net-income drop in 2025 signal weakening profitability. Persistent margin erosion undermines sustainable earnings power, limits reinvestment or payout capacity, and increases sensitivity to raw-material or pricing pressure in the auto supply chain.

Free cash flow turned negative in 2025

A swing to negative free cash flow and weaker cash conversion reduces financial flexibility despite low debt. It can force external financing or cuts to capex/dividends, and highlights operational or working-capital strains that could persist absent margin or efficiency improvements.

Declining returns on equity

ROE trending down indicates falling capital efficiency: the company is generating less profit per unit of equity. Over time this reduces shareholder return potential and suggests existing assets or pricing power are less capable of delivering prior profitability levels without structural fixes.

Endo Manufacturing Co., Ltd. Business Overview & Revenue Model

Company Description

Endo Manufacturing Co., Ltd. (7841) is a prominent player in the manufacturing sector, specializing in the production of high-quality electronic components and equipment. The company operates primarily in the sectors of industrial automation and consumer electronics, providing innovative solutions that cater to a diverse range of applications across various industries. Endo Manufacturing is known for its commitment to technological advancement and quality assurance, offering products that include sensors, control systems, and automation tools that enhance operational efficiency for its clients.

How the Company Makes Money

Endo Manufacturing Co., Ltd. generates revenue through multiple streams primarily focused on the sale of its core electronic components and systems. The company's revenue model is largely based on direct sales to manufacturers and distributors in the industrial automation and consumer electronics sectors. Key revenue streams include the sale of proprietary sensors and control systems, which are essential for automation processes in various industries. Additionally, Endo Manufacturing benefits from long-term contracts and partnerships with key industry players, providing them with a stable source of income. The company's investment in research and development enables it to innovate continuously, thereby attracting new clients and retaining existing ones, which further contributes to its earnings.

Endo Manufacturing Co., Ltd. Financial Statement Overview

Summary

Strong balance sheet with extremely low leverage and rising equity supports resilience, but earnings quality has weakened: margins compressed, net income fell sharply in 2025 vs 2024, and free cash flow turned negative in 2025.

Income Statement

Revenue has grown consistently from 2021–2025 (with strong growth in 2021 and continued gains thereafter), indicating improving demand and scale. However, profitability has deteriorated meaningfully: gross, operating, and net margins have compressed versus earlier years, and net income fell sharply in 2025 versus 2024. The business is profitable overall in recent years, but the trend suggests cost pressure and weaker earnings quality than the top-line growth implies.

Balance Sheet

The balance sheet is a clear strength: leverage is extremely low with debt-to-equity consistently near zero in recent years, and equity has steadily increased, supporting financial flexibility. Returns on equity are positive but modest and have trended down from prior peaks, reflecting weaker profitability rather than balance-sheet strain. Overall, the company appears very conservatively financed with ample capacity to absorb cyclical swings.

Cash Flow

Operating cash flow remains positive across the period shown, but cash generation has become less consistent: operating cash flow declined in 2024–2025 versus 2023, and free cash flow swung from strong positives (2022–2024) to negative in 2025. Cash conversion also looks weaker recently, with operating cash flow covering a smaller portion of net income in 2025 versus earlier years. The main positive is that the company can generate cash in normal years, but the latest year highlights volatility and reinvestment/working-capital pressure.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	18.04B	18.24B	17.42B	15.71B	14.58B	12.59B
Gross Profit	3.38B	3.00B	3.48B	2.76B	3.73B	3.56B
EBITDA	2.68B	2.17B	2.72B	2.16B	2.82B	2.74B
Net Income	944.92M	600.99M	1.12B	762.90M	796.80M	1.60B
Balance Sheet
Total Assets	26.61B	27.98B	26.48B	24.02B	21.87B	20.48B
Cash, Cash Equivalents and Short-Term Investments	8.51B	8.39B	9.86B	9.04B	7.26B	6.83B
Total Debt	147.75M	95.55M	175.00M	275.00M	375.00M	1.07B
Total Liabilities	4.67B	4.68B	4.28B	4.05B	3.50B	3.74B
Stockholders Equity	21.94B	23.30B	22.20B	19.97B	18.37B	16.73B
Cash Flow
Free Cash Flow	0.00	-159.45M	354.93M	1.58B	889.84M	709.06M
Operating Cash Flow	0.00	1.46B	1.76B	2.40B	1.93B	1.58B
Investing Cash Flow	0.00	-2.30B	-1.31B	-606.68M	-1.03B	-1.41B
Financing Cash Flow	0.00	-904.99M	-287.29M	-298.36M	-868.55M	231.35M

Endo Manufacturing Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1266.00
• 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:7841, the sentiment is Positive. The current price of 1266 is above the 20-day moving average (MA) of 1265.65, above the 50-day MA of 1249.88, and above the 200-day MA of 1165.46, indicating a neutral trend. The MACD of -8.33 indicates Positive momentum. The RSI at 52.36 is Neutral, neither overbought nor oversold. The STOCH value of 74.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7841.

Endo Manufacturing Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7608	82 Outperform	¥15.50B	12.42	―	2.37%	―	―
8135	81 Outperform	¥12.02B	12.52	―	3.96%	7.77%	247.26%
7847	75 Outperform	¥4.22B	23.25	―	4.78%	-11.24%	-48.52%
7809	70 Outperform	¥11.93B	8.49	―	2.70%	9.10%	27.73%
7841	62 Neutral	¥11.06B	18.47	―	3.31%	3.14%	-40.34%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7865	42 Neutral	¥1.63B	203.92	―	―	―	―