LEC INC (7874) AI Stock Analysis

• Market Cap: ¥41.89B
• Dividend Yield: 1.65%
• Average Volume (3M): 50.63K
• Price to Earnings (P/E): 24.5
• Beta (1Y): 0.51
• Revenue Growth: 8.88%
• EPS Growth: 36.87%
• Country: JP
• Employees: 946
• Sector: Consumer Cyclical
• Sector Strength: 78
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): 20.61
• Shares Outstanding: 38,165,340
• 10 Day Avg. Volume: 35,750
• 30 Day Avg. Volume: 50,630
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥1,293.00
• Price Target Upside: 5.98% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 66 Neutral
• Price Target: ¥1,293.00 ▲(5.98% Upside)

LEC INC's strong financial performance, particularly in revenue growth and operational efficiency, is a significant strength. Technical indicators show stability with a positive momentum. The valuation is reasonable, though rising debt levels and variable cash flow management are areas to watch.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for LEC INC's products, enhancing its market position and supporting long-term business expansion.

Operational Efficiency

Stable gross profit margins reflect effective cost control, which can lead to sustained profitability and competitive pricing strategies.

Product Innovation

Ongoing investment in R&D fosters innovation, helping LEC INC maintain a competitive edge and adapt to technological advancements.

Negative Factors

Rising Debt Levels

Increasing debt levels can strain financial resources, potentially limiting future investment opportunities and increasing financial risk.

Variable Cash Flow Management

Inconsistent cash flow management may hinder LEC INC's ability to fund new projects or handle economic downturns, impacting long-term growth.

Low Net Profit Margin

A low net profit margin indicates potential inefficiencies in cost structure or pricing strategy, which could affect long-term profitability.

LEC INC Business Overview & Revenue Model

Company Description

LEC INC (7874) is a company specializing in the development and manufacturing of advanced electronic components and systems. Operating primarily in the technology sector, LEC INC provides a range of products including semiconductors, circuit boards, and integrated systems that serve various industries such as telecommunications, automotive, and consumer electronics.

How the Company Makes Money

LEC INC generates revenue through multiple key streams, primarily from the sale of its electronic components and systems to original equipment manufacturers (OEMs) and other businesses in need of advanced technology solutions. The company also engages in long-term contracts and partnerships with major players in the technology and automotive sectors, which provide a steady income through recurring orders. Additionally, LEC INC invests in research and development to innovate and enhance its product offerings, allowing it to maintain a competitive edge and command premium pricing. The company may also earn revenue from licensing its technologies and intellectual property to other firms, further diversifying its income sources.

LEC INC Financial Statement Overview

Summary

LEC INC shows strong revenue growth and operational efficiency with stable gross profit margins. The balance sheet is balanced but rising debt levels need attention. 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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	66.30B	66.30B	60.78B	55.46B	51.42B	49.68B
Gross Profit	17.45B	17.45B	16.19B	14.60B	16.72B	18.23B
EBITDA	6.17B	6.08B	6.36B	6.80B	7.30B	8.11B
Net Income	1.73B	1.73B	796.00M	942.00M	2.28B	4.17B
Balance Sheet
Total Assets	89.42B	89.42B	89.24B	84.32B	74.60B	68.59B
Cash, Cash Equivalents and Short-Term Investments	30.25B	30.25B	33.47B	28.31B	21.21B	23.65B
Total Debt	46.34B	46.34B	44.28B	41.29B	32.39B	27.62B
Total Liabilities	53.37B	53.37B	51.65B	48.04B	38.85B	34.36B
Stockholders Equity	34.64B	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: 1220.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 1220 is above the 20-day moving average (MA) of 1200.30, above the 50-day MA of 1170.98, and above the 200-day MA of 1217.83, indicating a neutral trend. The MACD of 11.21 indicates Negative momentum. The RSI at 58.11 is Neutral, neither overbought nor oversold. The STOCH value of 59.79 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
7840	75 Outperform	¥44.72B	16.09		3.01%	0.19%	-9.79%
7955	75 Outperform	¥28.66B	14.11		3.99%	2.12%	56.08%
7898	74 Outperform	¥8.49B	4.14		2.65%	0.90%	―
7989	73 Outperform	¥40.10B	12.44		2.59%	2.31%	2.20%
7887	72 Outperform	¥7.11B	12.48		2.02%	7.48%	10.02%
7874	66 Neutral	¥41.89B	24.55		1.65%	8.88%	36.87%
Sector *	61 Neutral	$18.08B	12.82	-2.51%	3.03%	1.45%	-15.68%

LEC INC Corporate Events

LEC, Inc. Announces Treasury Stock Disposal for Executive Compensation

LEC, Inc. has announced the disposal of 158,000 shares of its treasury stock as restricted stock compensation to its directors and executive officers. This move is part of a plan to motivate these individuals to enhance corporate value and align their interests with shareholders by tying compensation to stock performance.