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

• Market Cap: ¥9.51B
• Dividend Yield: 2.65%
• Average Volume (3M): 14.07K
• Price to Earnings (P/E): 3.2
• Beta (1Y): 0.75
• 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: ¥1,099.00 ▲(14.12% 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

Margin recovery

Sustained improvement in gross and net margins reflects better cost control and pricing power in core wood and interior products. Higher margins provide a structural buffer against cyclical housing demand, improve cash generation potential per sale and support reinvestment or deleveraging over time.

Stable balance sheet

A near-44% equity ratio and sub-1.0 debt/equity indicate moderate leverage and a solid capital base. This durability grants the company flexibility to fund capital spending, withstand residential cycles, and access credit if needed without creating acute solvency risk during multi-quarter downturns.

Positive operating cash flow

Consistent positive operating cash flow and improved cash conversion point to healthy core business economics and collection/working-capital control. Over months this supports ongoing operations, servicing of moderate debt and targeted capex, strengthening long-term cash resilience.

Negative Factors

Negative free cash flow

Persistent negative free cash flow driven by elevated capex constrains the company's ability to fund growth internally, return capital to shareholders, or build cash buffers. Over several quarters this can force external financing or deferment of strategic initiatives if returns on capex lag.

Earnings volatility

Historical swings in net income indicate earnings are sensitive to input costs, demand cycles and mix. Such volatility complicates long-range planning, raises refinancing and budgeting risk, and can undermine sustained investment in product development or distribution expansion.

Modest revenue growth

Very low top-line growth suggests limited market expansion or pricing-driven gains. Over the medium term, slow revenue trends make it harder to scale fixed-cost absorption and to justify high capex, increasing pressure on margins and returns unless market share or product mix improves.

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 generates revenue primarily by manufacturing and selling wood-based building materials and interior products to customers involved in homebuilding and renovation (e.g., builders, contractors, housing companies, distributors/wholesalers, and retail/home-improvement channels). Key revenue streams typically include (1) product sales of interior materials and components (such as flooring and interior doors) and (2) sales of other housing-related materials/products and associated services tied to specification, delivery, and installation support where applicable. Earnings are influenced by the volume and mix of residential construction and renovation demand, pricing of finished products, and input costs (notably timber/wood materials and logistics). Specific details on segment revenue breakdowns, major customer/partner names, and contract structures are null.

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	43.26B	43.28B	39.83B	37.08B	38.08B
Total Liabilities	57.24B	56.49B	57.03B	52.61B	50.87B	50.01B
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: Negative
• Last Price: 963.00
• 50DMA: Negative
• 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 Negative. The current price of 963 is below the 20-day moving average (MA) of 1065.55, below the 50-day MA of 1040.70, and above the 200-day MA of 909.83, indicating a neutral trend. The MACD of -1.85 indicates Positive momentum. The RSI at 42.64 is Neutral, neither overbought nor oversold. The STOCH value of 23.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥10.63B	3.04	―	1.66%	8.56%	2690.35%
8130	76 Outperform	¥181.90B	11.81	―	4.91%	6.35%	14.05%
7840	75 Outperform	¥44.92B	13.60	―	2.97%	0.89%	-14.25%
7955	75 Outperform	¥34.53B	3.81	―	3.56%	3.03%	160.39%
7981	72 Outperform	¥176.24B	8.20	―	3.41%	6.17%	61.39%
7898	66 Neutral	¥9.51B	3.19	―	2.65%	1.11%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%