Eidai Kako Co., Ltd. (7877) AI Stock Analysis

• Market Cap: ¥3.04B
• Dividend Yield: 2.85%
• Average Volume (3M): 776.00
• Price to Earnings (P/E): 9.3
• Beta (1Y): 0.20
• Revenue Growth: -1.81%
• EPS Growth: 144.79%
• Country: JP
• Employees: 493
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 103.99
• Shares Outstanding: 1,460,000
• 10 Day Avg. Volume: 830
• 30 Day Avg. Volume: 776
• PEG Ratio: 2.38
• Price to Book (P/B): 0.27
• Price to Sales (P/S): 0.22
• P/FCF Ratio: 2.70
• 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: 73 Outperform
• Price Target: ¥2,486.00 ▲(38.11% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by solid financial performance (strong cash flow and low leverage) and attractive valuation (low P/E with a dividend). These positives are tempered by technical overbought conditions (very high RSI and elevated Stoch), which raise near-term downside risk, and by declining revenue growth.

Positive Factors

Robust free cash flow generation

A 334% jump in free cash flow and an operating cash flow to net income ratio of 4.79 show the company converts accounting profits into cash exceptionally well. Durable cash generation supports capex, dividends, debt service and strategic flexibility over multiple years.

Conservative balance sheet and low leverage

A debt-to-equity of 0.16 and equity ratio of 73.1% indicate limited financial leverage and strong capitalization. This conservatism reduces refinancing and solvency risk, preserving capacity to fund downturns, investments or opportunistic M&A over the medium term.

Healthy gross margin and return to profitability

A ~21.7% gross margin implies structural cost competitiveness in manufacturing, while a return to a positive net margin reflects operational recovery. Sustained mid-teens+ gross margins give room to absorb cost volatility while improving operating leverage over time.

Negative Factors

Declining revenue trend

A 2.5% revenue decline signals pressure on underlying demand or market share. Without durable revenue growth, fixed-cost absorption, reinvestment and margin expansion become harder, constraining long-term earnings growth and the ability to scale operations sustainably.

Modest operating and net margins

EBIT of 3.3% and net margin of 2.1% leave limited buffer against input cost inflation or pricing pressure. Low operating profitability constrains internal reinvestment, reduces resilience in downturns, and makes achieving high returns on incremental investment more difficult.

Low return on equity (capital efficiency)

An ROE of 2.6% indicates the company generates modest returns on shareholder capital. Persistently low ROE suggests limited capital efficiency, which can limit shareholder value creation unless management improves margins, growth or reallocates capital more effectively.

Eidai Kako Co., Ltd. Business Overview & Revenue Model

Company Description

Eidai Kako Co.,Ltd. manufactures and sells synthetic resin sheets and molded products. The company offers synthetic resin deformed molded products, including interior/exterior parts for home appliances, building materials for homes, and office furniture products; and floor mats for vehicles and bath lids. It also provides semiconductor-related parts, which include magazine sticks used for transporting and storing IC devices and various electronic components; laboratory benches and partition parts for office furniture parts; industrial parts that are used in the field of terminal block covers, LED lighting covers, aircraft parts, and escalator sliding parts; and sewer pipe rehabilitation materials, concrete block flexible joints, landscape material bamboo panels, etc.; and various home appliances related products and car accessories. The company also imports and exports various products. Eidai Kako Co.,Ltd. was founded in 1949 and is headquartered in Osaka, Japan.

How the Company Makes Money

Eidai Kako generates revenue through the production and sale of its industrial materials and components to various industries. The company's revenue model is primarily based on direct sales to manufacturers in sectors such as automotive and electronics, as well as through long-term contracts with major clients. Key revenue streams include the sale of precision parts, customized solutions tailored to client specifications, and recurring orders from established partnerships. Additionally, strategic collaborations with technology firms and investments in research and development contribute to the company's growth and profitability by enabling the introduction of new products that meet evolving market demands.

Eidai Kako Co., Ltd. Financial Statement Overview

Summary

Financials are solid overall: strong cash flow (free cash flow growth of 334% and high cash conversion vs. net income) and a conservative balance sheet (debt-to-equity 0.16, equity ratio 73.1%). Offsetting factors include modest profitability (net margin 2.1%, EBIT margin 3.3%) and a 2.5% revenue decline from 2024 to 2025.

Income Statement

Eidai Kako Co., Ltd. shows a solid gross profit margin of approximately 21.7% in 2025, indicating efficient cost management. The net profit margin improved to 2.1% from previous periods, reflecting a return to profitability. However, revenue has shown a declining trend by 2.5% from 2024 to 2025, and the EBIT margin, though positive, remains modest at 3.3%. Overall, the company demonstrates profitability recovery but faces challenges in revenue growth.

Balance Sheet

The company's balance sheet appears strong with a low debt-to-equity ratio of 0.16, indicating conservative leverage usage. The equity ratio is high at 73.1%, suggesting a solid asset base funded by equity. Return on equity stands at 2.6%, which is an improvement but still modest. The company maintains a healthy financial position with significant equity, though ROE could be improved further.

Cash Flow

Eidai Kako Co., Ltd. exhibits robust cash flow management with a significant free cash flow growth rate of 334% from 2024 to 2025, driven by increased operating cash flow. The operating cash flow to net income ratio is 4.79, reflecting strong cash generation relative to earnings. The free cash flow to net income ratio of 3.95 further supports efficient cash utilization. Overall, the cash flow position is strong, significantly enhancing financial flexibility.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	8.91B	8.86B	9.09B	8.30B	8.29B	7.70B
Gross Profit	2.06B	1.92B	1.80B	1.42B	1.78B	1.77B
EBITDA	705.17M	607.17M	561.74M	35.16M	539.91M	515.00M
Net Income	209.35M	185.23M	179.66M	-238.25M	160.53M	161.71M
Balance Sheet
Total Assets	9.59B	9.85B	9.58B	9.67B	9.76B	9.59B
Cash, Cash Equivalents and Short-Term Investments	2.06B	2.38B	1.70B	1.70B	1.63B	2.33B
Total Debt	1.06B	1.12B	1.11B	1.33B	669.45M	826.10M
Total Liabilities	2.45B	2.65B	2.58B	2.94B	2.76B	2.69B
Stockholders Equity	7.14B	7.20B	7.00B	6.72B	7.00B	6.89B
Cash Flow
Free Cash Flow	0.00	731.40M	168.44M	-504.27M	-342.43M	430.50M
Operating Cash Flow	0.00	888.54M	402.77M	-69.69M	-57.81M	598.94M
Investing Cash Flow	0.00	-152.16M	-160.83M	-425.93M	-398.97M	-197.57M
Financing Cash Flow	0.00	-84.88M	-280.95M	519.03M	-287.10M	-217.56M

Eidai Kako Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1800.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7877, the sentiment is Positive. The current price of 1800 is below the 20-day moving average (MA) of 2111.05, below the 50-day MA of 1937.56, and above the 200-day MA of 1723.92, indicating a bullish trend. The MACD of 115.46 indicates Negative momentum. The RSI at 82.68 is Negative, neither overbought nor oversold. The STOCH value of 52.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7877.

Eidai Kako Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4247	75 Outperform	¥3.90B	17.69	―	2.98%	7.64%	37.45%
7877	73 Outperform	¥3.04B	9.29	―	2.85%	-1.81%	144.79%
4120	71 Outperform	¥3.26B	17.49	―	3.15%	1.14%	50.47%
4243	69 Neutral	¥2.12B	9.72	―	2.53%	0.37%	6.53%
4361	68 Neutral	¥1.96B	6.65	―	4.20%	-0.77%	-29.54%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4616	51 Neutral	¥2.00B	27.74	―	2.34%	-2.27%	-12.76%

Eidai Kako Co., Ltd. Corporate Events

Eidai Kako Posts Strong Profit Growth on Modest Sales Rise, Maintains Solid Balance Sheet

Eidai Kako Co., Ltd. reported consolidated net sales of ¥6,949 million for the third quarter ended December 2025, a 3.4% year-on-year increase, with operating profit surging 85.6% to ¥398 million and profit attributable to owners of parent rising 86.0% to ¥273 million. The company’s financial position remained solid with total assets of ¥9,771 million, net assets of ¥7,241 million, and a capital adequacy ratio of 74.1%, although it continued its policy of paying no interim dividends for the second quarter of the fiscal year ending March 2026.

Basic earnings per share nearly doubled to ¥215.88 from ¥112.18 a year earlier, reflecting significantly improved profitability despite only modest sales growth. This combination of strong earnings momentum, stable balance sheet metrics, and a conservative dividend stance underscores management’s focus on strengthening internal reserves and financial resilience, which may support future strategic flexibility and reinforce the company’s positioning within its market segment.

The most recent analyst rating on (JP:7877) stock is a Buy with a Yen2193.00 price target. To see the full list of analyst forecasts on Eidai Kako Co., Ltd. stock, see the JP:7877 Stock Forecast page.