Muto Seiko Co. (7927) AI Stock Analysis

• Market Cap: ¥17.82B
• Dividend Yield: 5.18%
• Average Volume (3M): 17.93K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.79
• Revenue Growth: 4.04%
• EPS Growth: 12.46%
• Country: JP
• Employees: 3,126
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 81.71
• Shares Outstanding: 7,739,548
• 10 Day Avg. Volume: 18,020
• 30 Day Avg. Volume: 17,933
• PEG Ratio: -0.51
• Price to Book (P/B): 0.60
• Price to Sales (P/S): 0.40
• P/FCF Ratio: -28.54
• 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: 78 Outperform
• Price Target: ¥2,777.00 ▲(37.34% Upside)
• Action: Reiterated Date: 02/13/26
• Date: Action: Reiterated 02/13/26

The score is driven primarily by solid financial health (notably low leverage and a strong equity base) alongside an attractive valuation (low P/E and high dividend yield). Technicals support the uptrend, but overbought signals (high RSI/Stoch) and the recent negative free cash flow temper the overall rating.

Positive Factors

Conservative balance sheet

Low leverage and a ~59% equity ratio provide durable financial resilience. This conservative capital structure supports investment for growth, cushions cyclicality in automotive/industrial end markets, and preserves borrowing capacity for multi‑quarter strategic needs.

Stable revenue trend and OEM exposure

Consistent revenue growth, driven by precision plastic parts for automotive and industrial OEMs, reflects sticky customer relationships and product integration. Structural OEM demand and diversified end markets support predictable order streams over the next several quarters.

Operating cash generation

Positive operating cash flow and an OCF/Net Income ratio of 1.5 indicate the core manufacturing business converts reported earnings into cash. That durability supports working capital, ongoing capex programs, and operational continuity despite cyclical pressures.

Negative Factors

Negative free cash flow in 2025

Negative FCF driven by significant capex weakens near‑term financial flexibility. Over 2–6 months this may force careful capex phasing, external funding, or constrain discretionary returns, making capital allocation and investment timing a key structural risk.

Declining net income

A YoY drop in net income suggests margin pressure or rising expenses. If sustained, lower profitability reduces retained earnings and reinvestment capacity, potentially slowing product development or competitiveness in capital‑intensive molding business lines.

Modest profitability margins

Margins are moderate for a component manufacturer, limiting room for error against raw material or pricing pressure. Sustained single‑digit net margins constrain ROE improvement and make long‑term earnings sensitive to cost inflation or reduced OEM pricing power.

Muto Seiko Co. Business Overview & Revenue Model

Company Description

Muto Seiko Co. manufactures and sells plastic parts worldwide. It offers plastic parts for digital home appliances, such as digital and video cameras; and center panel units, including car navigation systems, air conditioners, audio, and automobile-related parts, as well as molds for injection molding and presses. The company was founded in 1956 and is headquartered in Kakamigahara, Japan.

How the Company Makes Money

Muto Seiko generates revenue primarily through the sale of its precision watch movements and components to various watch manufacturers. The company has established long-term partnerships with several well-known luxury watch brands, which contribute significantly to its earnings. Additionally, Muto Seiko may also engage in contract manufacturing and offer custom engineering solutions, providing tailored products to meet specific client needs. The combination of high-quality production, strategic partnerships, and a reputation for precision helps secure a consistent revenue stream for the company.

Muto Seiko Co. Financial Statement Overview

Summary

Strong overall fundamentals supported by solid revenue growth and a healthy balance sheet (low leverage and a strong equity base). The main offset is weaker cash conversion, with free cash flow turning negative in 2025 and net income declining versus the prior year.

Income Statement

Muto Seiko Co. has shown a positive revenue growth trend over the years, with a noticeable increase from 2024 to 2025. The gross profit margin for 2025 was approximately 19.65%, and the net profit margin for the same year was around 5.48%. The EBIT and EBITDA margins were 7.42% and 13.17%, respectively, indicating solid profitability and operational efficiency. However, the decline in net income from the previous year suggests potential challenges in cost management or other expenses.

Balance Sheet

The company maintains a healthy balance sheet with a debt-to-equity ratio of approximately 0.36 in 2025, indicating a conservative leverage position. The return on equity (ROE) was about 8.22%, reflecting moderate profitability for shareholders. The equity ratio was 59.2%, which showcases a strong equity base relative to total assets, signifying financial stability.

Cash Flow

The cash flow statement shows challenges in free cash flow, which turned negative in 2025 compared to positive free cash flow in prior years. The operating cash flow remained positive, but the significant capital expenditures resulted in negative free cash flow growth. The operating cash flow to net income ratio was 1.5, which suggests effective cash generation from operations relative to net income.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	28.10B	27.57B	26.32B	26.17B	20.23B	19.23B
Gross Profit	5.65B	5.55B	5.28B	5.01B	3.46B	3.67B
EBITDA	3.77B	3.63B	3.89B	3.26B	2.12B	1.84B
Net Income	1.45B	1.51B	1.77B	1.30B	521.26M	288.41M
Balance Sheet
Total Assets	30.89B	31.03B	29.48B	25.94B	24.57B	23.14B
Cash, Cash Equivalents and Short-Term Investments	9.91B	10.37B	10.26B	8.76B	7.97B	8.11B
Total Debt	6.98B	6.65B	5.25B	4.86B	5.28B	6.08B
Total Liabilities	12.24B	11.72B	10.57B	9.72B	10.17B	10.39B
Stockholders Equity	17.71B	18.37B	17.96B	15.34B	13.74B	12.01B
Cash Flow
Free Cash Flow	0.00	-388.72M	1.06B	1.21B	99.29M	1.08B
Operating Cash Flow	0.00	2.27B	3.86B	2.59B	1.43B	1.99B
Investing Cash Flow	0.00	-2.50B	-4.00B	-918.48M	-1.23B	-1.59B
Financing Cash Flow	0.00	379.51M	-237.03M	-746.61M	-1.04B	-175.13M

Muto Seiko Co. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2022.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7927, the sentiment is Positive. The current price of 2022 is below the 20-day moving average (MA) of 2361.60, below the 50-day MA of 2213.92, and above the 200-day MA of 1786.39, indicating a bullish trend. The MACD of 63.72 indicates Negative momentum. The RSI at 71.47 is Negative, neither overbought nor oversold. The STOCH value of 86.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7927.

Muto Seiko Co. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7927	78 Outperform	¥17.82B	9.80	―	5.18%	4.04%	12.46%
6658	76 Outperform	¥12.77B	6.79	―	4.44%	1.68%	15.79%
6928	69 Neutral	¥22.85B	21.34	―	2.92%	9.64%	163.46%
7908	69 Neutral	¥14.15B	17.15	―	3.17%	0.30%	4.85%
6919	66 Neutral	¥11.86B	52.79	―	5.75%	-0.23%	-32.32%
6772	62 Neutral	¥9.88B	49.02	―	1.78%	-1.17%	-42.36%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%