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

• Market Cap: ¥2.55B
• Dividend Yield: 2.85%
• Average Volume (3M): 776.00
• Price to Earnings (P/E): 8.2
• Beta (1Y): 0.17
• Revenue Growth: -1.81%
• EPS Growth: 144.79%
• Country: JP
• Employees: 493
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 56.61
• 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: 74 Outperform
• Price Target: ¥2,096.00 ▲(16.44% Upside)

Eidai Kako Co., Ltd. scores well due to its strong financial performance, particularly in cash flow management and profitability recovery. The valuation is attractive with a fair P/E ratio and a good dividend yield. However, technical indicators suggest some short-term weakness, which slightly tempers the overall score.

Positive Factors

Strong cash generation

A 334% jump in free cash flow and operating cash flow roughly 4.8x reported net income indicate sustainably strong cash conversion. This durable cash generation supports capex, dividends, working capital and deleveraging, enhancing financial flexibility across cycles.

Conservative balance sheet

Very low leverage and a high equity ratio signal a conservative capital structure that reduces refinancing and solvency risk. This provides long-term optionality for investment, cyclical downturns and strategic moves without jeopardizing financial stability.

Recovering profitability and healthy gross margin

A solid ~21.7% gross margin combined with a return to net profitability shows effective cost control in manufacturing. Sustained mid-20% gross margins underpin durable earnings potential and resilience to input price swings in the plastics business.

Negative Factors

Declining revenue trend

Consecutive revenue contraction limits operating leverage and constrains long-term growth prospects. Persistent top-line weakness can erode market position, reduce scale benefits in manufacturing, and make margin improvement harder to sustain over time.

Low return on equity

A 2.6% ROE implies the company generates limited returns on shareholders' capital, restricting capacity to fund expansion or meaningful dividend growth from reinvested earnings. Over the medium term this can dampen shareholder value creation.

Modest operating margins

An EBIT margin near 3.3% leaves little buffer against raw material cost swings or volume declines common in plastics manufacturing. Persistently thin operating margins increase earnings volatility and limit reinvestment capacity for product development or efficiency gains.

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

Eidai Kako Co., Ltd. demonstrates solid financial performance with strong cash flow management and profitability recovery. The balance sheet is robust with low leverage and high equity levels. However, challenges in revenue growth could impact future profitability.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: Positive
• RSI: Neutral
• 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 1843.85, above the 50-day MA of 1791.42, and above the 200-day MA of 1663.80, indicating a bullish trend. The MACD of 25.56 indicates Positive momentum. The RSI at 62.97 is Neutral, neither overbought nor oversold. The STOCH value of 56.61 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	¥3.68B	20.07	―	2.98%	7.64%	37.45%
7877	74 Outperform	¥2.55B	8.25	―	2.85%	-1.81%	144.79%
4120	71 Outperform	¥3.32B	6.78	―	3.15%	1.14%	50.47%
4243	69 Neutral	¥1.93B	9.94	―	2.53%	0.37%	6.53%
4361	68 Neutral	¥1.83B	6.12	―	4.20%	-0.77%	-29.54%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
4616	51 Neutral	¥1.94B	26.87	―	2.34%	-2.27%	-12.76%

Eidai Kako Co., Ltd. Corporate Events

Eidai Kako Co., Ltd. Reports Strong Q2 Financial Performance

Eidai Kako Co., Ltd. reported a notable increase in its financial performance for the second quarter of the fiscal year ending March 2026. The company achieved a 3.3% rise in net sales and a significant 180% increase in operating profit compared to the same period last year. This improvement in financial results highlights the company’s strengthened position in its market and suggests positive implications for its stakeholders.

The most recent analyst rating on (JP:7877) stock is a Buy with a Yen1902.00 price target. To see the full list of analyst forecasts on Eidai Kako Co., Ltd. stock, see the JP:7877 Stock Forecast page.