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

• Market Cap: ¥10.31B
• Dividend Yield: 2.65%
• Average Volume (3M): 14.07K
• Price to Earnings (P/E): 4.3
• Beta (1Y): 0.79
• 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): 75.44
• 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: ¥1,192.00 ▲(23.78% Upside)
• Action: Reiterated Date: 10/23/25
• Date: Action: Reiterated 10/23/25

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

Improving margins and return to profitability

Sustained gross margin expansion and a return to positive net margin indicate improved cost control and pricing power. Over the next several months this supports operating leverage, steadier earnings generation and a stronger base for reinvestment into products and distribution.

Stable balance sheet with moderate leverage

A near-44% equity ratio and sub-1.0 debt/equity imply manageable leverage and solvency buffer. This financial stability preserves strategic flexibility for capex, working capital or M&A and reduces refinancing risk, bolstering durability across business cycles.

Diversified channels and integrated product offering

A business model spanning manufacturing, product variety and multiple sales channels (builders, distributors, retail) spreads demand risk and supports consistent order flow. Vertical integration and service support help protect margins and customer relationships over time.

Negative Factors

Negative free cash flow driven by high capex

Persistent negative free cash flow from elevated capital spending reduces internal funding available for debt reduction, dividends or strategic initiatives. If sustained, it may force reliance on external financing or constrain flexibility during demand slowdowns.

Historical earnings volatility

Marked swings in net income undermine predictability of cash generation and complicate planning for capex and dividends. Earnings volatility often signals sensitivity to cost swings and demand, making long-term forecasting and investor confidence harder to maintain.

Cyclical exposure to housing demand and input costs

Revenue and margins are structurally tied to residential construction cycles and timber/logistics cost swings. Extended housing downturns or sustained input-price inflation can materially compress margins and volumes for months to quarters, limiting durability of results.

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

Company Description

Wood One Co.,Ltd. operates as a manufacturer and vendor of interior supplies for home and office use in Japan. The company's products include flooring, wall paneling, stairs, doors, storage and kitchen systems, etc. It also designs and plans timber structural materials for the home construction industry. The company was formerly known as Juken Sangyo Co., Ltd. and changed its name to Wood One Co.,Ltd. in October 2002. Wood One Co.,Ltd. was founded in 1935 and is headquartered in Hatsukaichi, Japan.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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: 963.00
• 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:7898, the sentiment is Positive. The current price of 963 is below the 20-day moving average (MA) of 1064.55, below the 50-day MA of 1012.60, and above the 200-day MA of 894.26, indicating a bullish trend. The MACD of 24.90 indicates Positive momentum. The RSI at 68.07 is Neutral, neither overbought nor oversold. The STOCH value of 50.85 is Neutral, 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
7887	76 Outperform	¥11.28B	10.09	―	1.66%	8.56%	2690.35%
7955	75 Outperform	¥38.48B	12.06	―	3.56%	3.03%	160.39%
8119	75 Outperform	¥8.84B	22.51	―	4.49%	-9.68%	-61.01%
7898	66 Neutral	¥10.31B	4.26	―	2.65%	1.11%	―
9827	64 Neutral	¥8.25B	15.97	―	4.95%	-4.68%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7822	46 Neutral	¥11.49B	25.72	―	4.41%	2.78%	-88.37%