Wood One Co., Ltd. (7898) AI Stock Analysis

• Market Cap: ¥8.38B
• Dividend Yield: 2.79%
• Average Volume (3M): 14.07K
• Price to Earnings (P/E): 3.5
• Beta (1Y): 0.70
• Revenue Growth: 1.11%
• EPS Growth: N/A
• Country: JP
• Employees: 2,222
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): 44.47
• Shares Outstanding: 9,841,969
• 10 Day Avg. Volume: 9,930
• 30 Day Avg. Volume: 14,066
• PEG Ratio: -0.03
• Price to Book (P/B): 0.19
• Price to Sales (P/S): 0.13
• P/FCF Ratio: -19.78
• 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: 66 Neutral
• Price Target: ¥929.00 ▲(3.34% Upside)

The overall stock score is driven by a strong valuation, indicating potential undervaluation, and a solid financial performance with improved profitability. However, technical indicators suggest a lack of strong momentum, and negative free cash flow remains a concern.

Positive Factors

Sustainability and Innovation

Wood One's focus on sustainability and innovation positions it well in the growing market for eco-friendly building materials, providing a competitive edge and aligning with long-term industry trends.

Stable Financial Position

A stable financial position with a strong equity ratio ensures resilience against economic fluctuations and supports long-term operational stability.

Improved Profitability

Improved profitability through better cost management enhances the company's ability to reinvest in growth opportunities and withstand competitive pressures.

Negative Factors

Negative Free Cash Flow

Negative free cash flow due to high capital expenditures can strain financial resources, limiting the company's ability to invest in new projects or weather economic downturns.

Earnings Volatility

Earnings volatility can create uncertainty for investors and may impact the company's ability to plan long-term strategic initiatives effectively.

Debt Monitoring

While leverage is balanced, ongoing debt monitoring is crucial to prevent financial strain and ensure sustainable growth, especially in fluctuating market conditions.

Wood One Co., Ltd. Business Overview & Revenue Model

Company Description

Wood One Co., Ltd. (7898) is a Japanese company primarily engaged in the manufacturing and sale of wooden building materials and products. The company operates in the construction and housing sectors, providing high-quality wooden components, including structural lumber, flooring, and interior finishes. Wood One is known for its commitment to sustainability and innovation in wood processing technology, catering to both residential and commercial construction markets.

How the Company Makes Money

Wood One Co., Ltd. generates revenue through the sale of its wooden building materials and related products. The company's primary revenue streams include the direct sale of lumber and engineered wood products to construction companies, wholesalers, and retailers. Additionally, Wood One offers value-added services such as custom milling and design solutions, which further enhance its profitability. The company also engages in strategic partnerships with construction firms and real estate developers, allowing it to secure long-term contracts and stabilize its revenue base. Seasonal demand fluctuations in the construction industry and the growing trend towards eco-friendly building materials contribute to its earnings.

Wood One Co., Ltd. Financial Statement Overview

Summary

Wood One Co., Ltd. shows a commendable recovery in profitability and operational efficiency, with improved margins and a stable balance sheet. However, negative free cash flow and historical volatility in earnings highlight areas needing attention.

Income Statement

The company has shown resilience with a modest revenue growth of 0.58% in the latest year after a previous decline. Gross profit margin improved to 27.12%, indicating better cost management, although net profit margin significantly recovered from -3.57% to 2.73%, showing a return to profitability. The EBIT and EBITDA margins also improved, reflecting operational efficiency. However, the volatility in net income over the years suggests potential risks.

Balance Sheet

The company maintains a stable financial position with an equity ratio of 43.8%, providing a solid buffer against liabilities. The debt-to-equity ratio is 0.89, indicating balanced leverage. Return on equity improved to 3.98%, reflecting better profitability. Despite this, the company should continue to monitor its debt levels to maintain financial stability.

Cash Flow

The company's cash flow management shows mixed results. Operating cash flow is positive, yet the free cash flow remains negative, reflecting high capital expenditures. The operating cash flow to net income ratio improved, suggesting better cash conversion efficiency, but the negative free cash flow stresses the need for effective capital allocation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	65.04B	65.16B	64.78B	65.83B	66.58B	59.08B
Gross Profit	17.85B	17.68B	15.72B	17.46B	19.27B	18.06B
EBITDA	6.74B	6.85B	1.55B	4.21B	5.58B	5.33B
Net Income	2.04B	1.78B	-2.31B	365.00M	1.31B	1.17B
Balance Sheet
Total Assets	103.16B	102.11B	101.75B	97.02B	95.06B	91.14B
Cash, Cash Equivalents and Short-Term Investments	4.55B	5.44B	5.16B	4.55B	5.48B	8.38B
Total Debt	40.71B	39.93B	39.72B	36.60B	33.64B	35.62B
Total Liabilities	57.24B	56.49B	57.04B	52.62B	50.88B	50.02B
Stockholders Equity	44.98B	44.71B	43.86B	43.35B	43.15B	40.23B
Cash Flow
Free Cash Flow	0.00	-440.00M	-933.00M	-3.34B	940.00M	-960.00M
Operating Cash Flow	0.00	3.98B	4.03B	109.00M	4.60B	4.09B
Investing Cash Flow	0.00	-3.63B	-5.07B	-2.94B	-3.92B	-5.27B
Financing Cash Flow	0.00	71.00M	1.53B	1.94B	-3.80B	2.83B

Wood One Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 899.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7898, the sentiment is Positive. The current price of 899 is above the 20-day moving average (MA) of 881.60, above the 50-day MA of 872.51, and above the 200-day MA of 862.77, indicating a bullish trend. The MACD of 7.78 indicates Negative momentum. The RSI at 62.04 is Neutral, neither overbought nor oversold. The STOCH value of 88.99 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7898.

Wood One Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7955	80 Outperform	¥29.70B	11.76	―	3.98%	3.03%	160.39%
7887	80 Outperform	¥7.28B	13.60	―	1.94%	8.56%	2690.35%
8119	75 Outperform	¥7.92B	18.15	―	4.59%	-9.68%	-61.01%
7898	66 Neutral	¥8.38B	3.51	―	2.79%	1.11%	―
9827	66 Neutral	¥7.92B	66,391.75	―	5.06%	-4.68%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7822	46 Neutral	¥10.16B	32.17	―	4.35%	2.78%	-88.37%