SONOCOM Co., Ltd. (7902) AI Stock Analysis

• Market Cap: ¥4.08B
• Dividend Yield: 1.32%
• Average Volume (3M): 1.69K
• Price to Earnings (P/E): 15.5
• Beta (1Y): 0.42
• Revenue Growth: 18.14%
• EPS Growth: 60.87%
• Country: JP
• Employees: 109
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 23.83
• Shares Outstanding: 5,000,000
• 10 Day Avg. Volume: 1,430
• 30 Day Avg. Volume: 1,693
• PEG Ratio: -1.14
• Price to Book (P/B): 0.35
• Price to Sales (P/S): 1.28
• P/FCF Ratio: -13.94
• 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: 68 Neutral
• Price Target: ¥1,308.00 ▲(41.10% Upside)
• Action: Reiterated Date: 02/10/26
• Date: Action: Reiterated 02/10/26

The score is driven primarily by strong balance-sheet safety but offset by weak and volatile cash generation (including negative operating/free cash flow despite profits). Technicals add support due to a clear uptrend and positive momentum, while valuation is neutral with a mid-range P/E and modest dividend yield.

Positive Factors

Very low leverage / strong balance sheet

Near-zero debt and equity ~¥8.9B vs assets ~¥9.5B provide durable financial flexibility. This conservative capital structure reduces insolvency risk, supports investment or buybacks, and allows the company to weather cyclical downturns without relying on external financing.

Rebound in operating profitability

A meaningful improvement in EBIT margin implies better cost control and operating leverage. Sustained higher operating profitability increases free cash generation potential (subject to working-capital), supports reinvestment, and strengthens competitive positioning over the medium term.

Healthy gross margins

Consistently strong gross margins suggest product or pricing advantages and cost structure discipline. Durable margin headroom cushions operating results against revenue volatility and supports reinvestment in R&D or customer service to maintain market share.

Negative Factors

Deteriorating cash flow conversion

The recent swing to negative operating and free cash flow signals working-capital or cash-conversion issues. If persistent, this undermines the balance-sheet strength by limiting internal funding for capex, dividends or acquisitions and raises reliance on external liquidity.

Uneven revenue trends and soft net margin

Top-line instability and a declining net margin reduce visibility into future earnings power. Structural demand variability or pricing pressure below the operating line can impair long-term profit growth and make capital allocation and forecasting more challenging for management.

Low returns on equity

A very conservative capital base with ROE near 2–3% indicates capital is not being deployed for high returns. Persistently low ROE limits shareholder value creation, constrains ability to justify retained earnings for growth, and may pressure future capital allocation choices.

SONOCOM Co., Ltd. Business Overview & Revenue Model

Company Description

SONOCOM Co., Ltd. (7902) is a Japanese company specializing in the manufacturing and distribution of electronic components and devices. The company operates in various sectors, including consumer electronics, industrial electronics, and communication equipment. SONOCOM is known for its innovative solutions and high-quality products that cater to a wide range of industries, providing essential components that enhance the performance and functionality of electronic devices.

How the Company Makes Money

SONOCOM Co., Ltd. generates revenue primarily through the sale of its electronic components and devices to manufacturers and industries in need of high-performance and reliable solutions. The company's key revenue streams include direct sales to consumer electronics companies, partnerships with industrial equipment manufacturers, and contracts with communication technology providers. SONOCOM's earnings are significantly influenced by its ability to innovate and maintain strong relationships with major players in the electronics and technology sectors. Additionally, the company may engage in strategic collaborations and joint ventures to expand its market reach and enhance its product offerings.

SONOCOM Co., Ltd. Financial Statement Overview

Summary

Strong balance-sheet position with essentially no leverage and substantial equity provides financial flexibility (high balance-sheet score). However, cash flow is a clear weakness: recent negative operating and free cash flow despite positive earnings raises near-term earnings-quality and predictability concerns, and revenue has been inconsistent despite improved 2025 operating results.

Income Statement

Revenue growth has been inconsistent (declines in 2020–2021 and 2023–2024, followed by a rebound in 2025), suggesting a choppy demand environment. Profitability is generally solid for the industry with healthy gross and operating margins, and 2025 shows a clear operating improvement versus 2024. However, net profit margin softened in 2025 versus 2024, indicating higher below-the-line costs (e.g., taxes/other items) or less favorable non-operating impacts despite stronger operating results.

Balance Sheet

The balance sheet is conservatively positioned with essentially no leverage (debt-to-equity near zero across all years, and total debt at or near zero in 2025). Equity is large relative to assets, supporting financial flexibility and downside protection. Returns on equity are positive but modest (low-to-mid single digits), which points to conservative capital structure but also suggests the business is not extracting high earnings power from its equity base.

Cash Flow

Cash generation is the key weak spot: operating cash flow and free cash flow swung negative in 2023 and again in 2025 after being positive in 2024 and 2022, indicating volatility in working capital and/or investment spending. In 2025, profits were positive while operating cash flow was negative, a quality-of-earnings concern in the near term. While prior years show the company can generate healthy cash (notably 2022 and 2024), the recent reversal raises execution and predictability risk.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.50B	2.42B	2.13B	2.24B	2.29B	1.98B
Gross Profit	761.23M	734.04M	611.29M	731.63M	806.21M	628.79M
EBITDA	470.60M	478.19M	290.00M	382.72M	472.83M	334.77M
Net Income	204.87M	210.72M	240.90M	167.82M	290.17M	111.35M
Balance Sheet
Total Assets	9.48B	9.53B	9.62B	9.13B	9.45B	8.97B
Cash, Cash Equivalents and Short-Term Investments	4.13B	4.06B	4.55B	4.63B	4.40B	4.34B
Total Debt	0.00	0.00	4.35M	43.68M	7.53M	6.87M
Total Liabilities	577.88M	614.99M	841.19M	647.90M	1.03B	865.67M
Stockholders Equity	8.90B	8.91B	8.78B	8.48B	8.42B	8.11B
Cash Flow
Free Cash Flow	0.00	-222.12M	221.83M	-327.18M	311.81M	90.75M
Operating Cash Flow	0.00	-79.40M	456.71M	-111.39M	415.90M	348.68M
Investing Cash Flow	0.00	-328.55M	-279.84M	-27.34M	-25.08M	-412.06M
Financing Cash Flow	0.00	-43.14M	-35.84M	-108.51M	-36.55M	-36.69M

SONOCOM Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 927.00
• 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:7902, the sentiment is Positive. The current price of 927 is below the 20-day moving average (MA) of 1110.60, below the 50-day MA of 1019.28, and above the 200-day MA of 917.27, indicating a bullish trend. The MACD of 29.05 indicates Positive momentum. The RSI at 56.42 is Neutral, neither overbought nor oversold. The STOCH value of 38.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7902.

SONOCOM Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6969	75 Outperform	¥2.91B	7.18	―	―	16.21%	3915.63%
7902	68 Neutral	¥4.08B	15.53	―	1.32%	18.14%	60.87%
7836	68 Neutral	¥2.99B	28.49	―	―	25.45%	83.12%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6666	54 Neutral	¥4.79B	-37.42	―	2.33%	7.71%	-215.42%
6867	52 Neutral	¥1.85B	-103.66	―	3.02%	-0.26%	―
6926	46 Neutral	¥4.45B	-2.48	―	―	-6.31%	-64.22%