LEC INC (7874) AI Stock Analysis

• Market Cap: ¥41.79B
• Dividend Yield: 1.9%
• Average Volume (3M): 44.43K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 0.49
• Revenue Growth: 6.70%
• EPS Growth: 53.04%
• Country: JP
• Employees: 946
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): 32.65
• Shares Outstanding: 38,165,340
• 10 Day Avg. Volume: 47,380
• 30 Day Avg. Volume: 44,430
• PEG Ratio: 0.17
• Price to Book (P/B): 1.12
• Price to Sales (P/S): 0.59
• P/FCF Ratio: 14.29
• 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: 63 Neutral
• Price Target: ¥1,083.00 ▼(-1.28% Downside)
• Action: Reiterated Date: 11/22/25
• Date: Action: Reiterated 11/22/25

LEC INC's overall stock score is driven by strong financial performance, despite low profitability and rising debt levels. Technical indicators suggest bearish momentum with overbought conditions. The valuation is moderate, offering some dividend yield but not significantly high.

Positive Factors

Diversified revenue streams & strategic partnerships

LEC's business model spans automotive OEM sales, telecommunications contracts, licensing and strategic partnerships. This multi-channel revenue mix and ongoing R&D create structural resilience versus a single end market, reducing cyclical exposure and supporting stable demand over months.

Consistent revenue growth and stable gross margins

The company has delivered steady top-line growth with stable gross margins and improving EBIT/EBITDA trends, including a notable revenue uptick from 2024 to 2025. Persistent demand and controlled COGS point to sustainable operating leverage and reinvestment capacity over the medium term.

Healthy operating cash generation relative to income

A healthy operating cash flow to net income ratio indicates the business converts reported profits into cash reliably. The 2025 free cash flow recovery demonstrates cash generation resilience, supporting capex, licensing activities and R&D without immediate equity or debt raises in the medium term.

Negative Factors

Rising total debt levels

Total debt has increased over time despite a moderate debt-to-equity ratio. Higher absolute leverage raises interest and refinancing risk, which can constrain capital allocation, limit strategic flexibility, and magnify shocks to earnings and cash flow if industry conditions deteriorate.

Low net profit margin

Despite solid revenue growth, low net margins indicate limited conversion of sales into bottom-line profits. This constrains retained earnings, weakens buffer against cost inflation, and reduces the firm's ability to self-fund expansions or absorb margin pressure from competitive pricing over the coming months.

Volatile free cash flow history

Free cash flow variability and prior declines signal uneven cash conversion cycles. Even with a 2025 recovery, inconsistent FCF complicates planning for capex, R&D and debt service, increasing the risk that future investments or debt maturities could require external financing under less favorable terms.

LEC INC Business Overview & Revenue Model

Company Description

LEC INC (7874) is a diversified technology company specializing in advanced electronics and communication systems. The company operates primarily in the telecommunications and automotive sectors, offering a range of products including high-performance sensors, communication devices, and integrated circuit solutions. LEC INC is known for its innovation in developing cutting-edge technologies that enhance connectivity and efficiency in various applications.

How the Company Makes Money

LEC INC generates revenue through multiple streams, primarily from the sale of its electronic and communication products. Key revenue streams include direct sales to original equipment manufacturers (OEMs) in the automotive industry, as well as contracts with telecommunications companies for infrastructure solutions. The company also benefits from licensing its proprietary technologies to third-party manufacturers, creating additional income. Strategic partnerships with major industry players enhance its market reach and contribute to revenue growth, while ongoing investments in research and development ensure a steady pipeline of new products that meet evolving market demands.

LEC INC Financial Statement Overview

Summary

LEC INC shows strong revenue growth and operational efficiency with stable gross profit margins. However, the net profit margin is low, and rising debt levels pose a risk. Cash flow management is variable, indicating a need for consistent free cash flow generation.

Income Statement

LEC INC has demonstrated consistent revenue growth with a notable increase from 2024 to 2025. The gross profit margin remains stable, indicating efficient cost management. However, the net profit margin is relatively low, suggesting room for improvement in profitability. EBIT and EBITDA margins show a positive trend, reflecting operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is moderate, indicating a balanced approach to leveraging. Return on Equity (ROE) has shown improvement, highlighting effective use of equity capital. The equity ratio is stable, suggesting a solid financial structure. However, the increase in total debt over the years poses a potential risk if not managed carefully.

Cash Flow

LEC INC's free cash flow has shown fluctuations, with a decline in recent years but a recovery in 2025. The operating cash flow to net income ratio is healthy, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio suggests variability in cash flow management, which could impact future investments.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	67.53B	66.30B	60.78B	55.46B	51.42B	49.68B
Gross Profit	18.45B	17.45B	16.19B	14.60B	16.72B	18.23B
EBITDA	6.30B	6.08B	6.36B	6.80B	7.30B	8.11B
Net Income	1.59B	1.73B	796.00M	942.00M	2.28B	4.17B
Balance Sheet
Total Assets	91.24B	89.42B	89.24B	84.32B	74.60B	68.59B
Cash, Cash Equivalents and Short-Term Investments	31.93B	30.25B	33.47B	28.31B	21.21B	23.65B
Total Debt	45.15B	46.34B	44.28B	41.29B	32.39B	27.62B
Total Liabilities	54.72B	53.37B	51.65B	48.04B	38.85B	34.36B
Stockholders Equity	35.10B	34.64B	35.76B	34.64B	34.18B	32.77B
Cash Flow
Free Cash Flow	0.00	2.72B	3.16B	654.00M	-5.33B	-2.96B
Operating Cash Flow	0.00	4.21B	5.94B	3.37B	3.35B	5.61B
Investing Cash Flow	0.00	-10.76B	-2.25B	-7.42B	-9.59B	-4.17B
Financing Cash Flow	0.00	-251.00M	2.25B	6.85B	3.55B	-2.31B

LEC INC Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1097.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7874, the sentiment is Positive. The current price of 1097 is below the 20-day moving average (MA) of 1103.20, above the 50-day MA of 1064.76, and below the 200-day MA of 1121.29, indicating a bullish trend. The MACD of 42.89 indicates Negative momentum. The RSI at 67.53 is Neutral, neither overbought nor oversold. The STOCH value of 79.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7874.

LEC INC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7989	77 Outperform	¥55.38B	16.29	―	2.52%	2.47%	6.88%
7887	76 Outperform	¥11.66B	10.09	―	1.66%	8.56%	2690.35%
7840	75 Outperform	¥47.27B	17.00	―	2.97%	0.89%	-14.25%
7955	75 Outperform	¥38.40B	12.06	―	3.56%	3.03%	160.39%
7898	66 Neutral	¥10.09B	4.26	―	2.65%	1.11%	―
7874	63 Neutral	¥41.79B	15.03	―	1.90%	6.70%	53.04%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

LEC INC Corporate Events

LEC, Inc. Revises Financial Forecasts Upward for FY 2026

LEC, Inc. has revised its financial forecasts for the fiscal year ending March 31, 2026, indicating an expected increase in operating profit, ordinary profit, and profit attributable to owners of the parent. This positive revision is attributed to the successful launch of new products and effective cost-reduction measures, suggesting a strong market position and potential benefits for stakeholders.

The most recent analyst rating on (JP:7874) stock is a Hold with a Yen1061.00 price target. To see the full list of analyst forecasts on LEC INC stock, see the JP:7874 Stock Forecast page.

LEC INC. Reports Strong First Half Financial Results for 2025

LEC INC. reported its consolidated financial results for the six months ended September 30, 2025, showing significant growth in operating profit by 103.5% and ordinary profit by 60.3% compared to the previous year. The company’s net sales increased by 5.4%, indicating a strong performance in the first half of the fiscal year, which could positively impact its market position and stakeholder confidence.

The most recent analyst rating on (JP:7874) stock is a Hold with a Yen1061.00 price target. To see the full list of analyst forecasts on LEC INC stock, see the JP:7874 Stock Forecast page.