Kensoh Co., Ltd. (7939) AI Stock Analysis

• Market Cap: ¥2.36B
• Dividend Yield: 3.72%
• Average Volume (3M): 2.86K
• Price to Earnings (P/E): 13.6
• Beta (1Y): 0.25
• Revenue Growth: 9.08%
• EPS Growth: 40.91%
• Country: JP
• Employees: 204
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 8.17
• Shares Outstanding: 4,022,774
• 10 Day Avg. Volume: 3,290
• 30 Day Avg. Volume: 2,863
• PEG Ratio: -2.29
• Price to Book (P/B): 0.63
• Price to Sales (P/S): 0.35
• P/FCF Ratio: 5.24
• 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: 64 Neutral
• Price Target: ¥674.00 ▲(18.45% Upside)
• Action: Reiterated Date: 10/30/25
• Date: Action: Reiterated 10/30/25

Kensoh Co., Ltd. has a stable financial foundation with strong gross profit margins and a healthy balance sheet. However, declining net income and inconsistent revenue growth pose challenges to future profitability. Technical indicators suggest weak market momentum, but the stock's valuation is attractive due to a reasonable P/E ratio and a solid dividend yield. Overall, while financially stable, the company faces challenges in growth and market sentiment.

Positive Factors

Gross Profit Margins

Consistent gross margins near 28-30% indicate durable cost control and pricing stability versus peers. Sustained gross margin supports long-term operating profitability, provides a buffer against input cost swings, and underpins predictable EBITDA generation.

Balance Sheet Strength

An equity ratio above 50% and moderate leverage signal financial resilience and low solvency risk. This balance sheet strength provides lasting flexibility to fund capex, absorb shocks, maintain dividends, or pursue strategic initiatives without heavy refinancing stress.

Free Cash Flow Recovery

A recovery in free cash flow in 2025 demonstrates the business can convert operating performance into cash when conditions allow. Sustainable cash generation supports reinvestment, deleveraging or shareholder returns and is critical for multi-quarter financial stability.

Negative Factors

Declining Net Income

A material decline in net income over multiple years reduces retained earnings and return on equity, limiting internal funding for growth. Persisting net income erosion can pressure margins, weaken investor confidence, and constrain strategic investments over months to years.

Inconsistent Revenue Growth

Unsteady top-line growth and a recent slight decline hinder economies of scale and make long-term planning harder. Structural or demand-side weakness could limit sustainable margin expansion and impede durable improvements in profitability and cash flow.

Volatile Cash Generation

Repeated negative free cash flow in past years signals cash conversion volatility and potential working-capital or operational issues. Such volatility increases reliance on external financing and raises execution risk for multi-quarter investment or dividend strategies.

Kensoh Co., Ltd. Business Overview & Revenue Model

Company Description

Kensoh Co.,Ltd. engages in the manufacture and sale of sheet metal processed parts, and metal signs and related products in Japan. It offers letter signs, LED units, order products, exterior and interior signs, digital signs, and barrier-free related signs, as well as related documents. Kensoh Co.,Ltd. was Incorporated in 1971 and is headquartered in Hiroshima, Japan.

How the Company Makes Money

Kensoh Co., Ltd. generates revenue through multiple key streams, primarily focusing on the sale of precision machinery and components to various industries. The company earns money by selling its products directly to manufacturers in the medical, automotive, and industrial sectors through long-term contracts and agreements. Additionally, Kensoh benefits from partnerships with other technology firms, which allow for collaborative development projects and access to new markets. The company's commitment to research and development also positions it to capitalize on emerging trends, thus driving future growth and revenue potential.

Kensoh Co., Ltd. Financial Statement Overview

Summary

Kensoh Co., Ltd. demonstrates stable gross profit margins and a strong equity position, indicating solid cost management and financial stability. However, declining net income and inconsistent revenue growth raise concerns about future profitability. The balance sheet remains robust, but cash flow volatility suggests potential challenges in cash management.

Income Statement

Kensoh Co., Ltd. shows stable gross profit margins around 28-30% over the years, indicating consistent cost management. However, net profit margins have been declining, with a notable drop in net income from 2021 to 2025. Revenue growth has been inconsistent, with a slight decline in recent years, which could be a concern for future profitability. The EBIT and EBITDA margins are relatively stable, but the downward trend in net income suggests potential challenges in maintaining profitability.

Balance Sheet

The company maintains a healthy equity ratio of over 50%, indicating strong financial stability. The debt-to-equity ratio is moderate, suggesting manageable leverage. Return on equity has decreased over the years, reflecting the decline in net income. Overall, the balance sheet shows a stable financial position, but the declining ROE could be a concern if the trend continues.

Cash Flow

Kensoh Co., Ltd. has experienced fluctuations in free cash flow, with negative free cash flow in several years, indicating potential cash management issues. The operating cash flow to net income ratio is inconsistent, reflecting volatility in cash generation relative to earnings. While there was a recovery in free cash flow in 2025, the historical volatility suggests potential challenges in sustaining positive cash flow.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	5.87B	5.89B	6.02B	5.40B	5.12B
Gross Profit	1.68B	1.74B	1.80B	1.74B	1.61B
EBITDA	426.71M	421.45M	475.55M	432.50M	499.29M
Net Income	175.03M	183.94M	252.48M	186.20M	321.56M
Balance Sheet
Total Assets	5.55B	5.76B	6.06B	5.72B	5.85B
Cash, Cash Equivalents and Short-Term Investments	575.44M	610.60M	640.08M	594.97M	816.98M
Total Debt	1.40B	1.74B	1.34B	904.61M	1.23B
Total Liabilities	2.29B	2.61B	3.05B	2.91B	3.19B
Stockholders Equity	3.27B	3.15B	3.01B	2.81B	2.65B
Cash Flow
Free Cash Flow	392.75M	-440.08M	-306.78M	169.04M	194.70M
Operating Cash Flow	485.17M	-223.25M	-213.87M	269.30M	344.15M
Investing Cash Flow	-124.80M	-144.39M	-125.43M	-128.59M	207.71M
Financing Cash Flow	-405.53M	338.15M	384.41M	-362.72M	-219.19M

Kensoh Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 569.00
• 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:7939, the sentiment is Positive. The current price of 569 is below the 20-day moving average (MA) of 618.05, below the 50-day MA of 596.56, and above the 200-day MA of 555.02, indicating a bullish trend. The MACD of 9.95 indicates Positive momentum. The RSI at 64.35 is Neutral, neither overbought nor oversold. The STOCH value of 58.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7939.

Kensoh Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7946	72 Outperform	¥1.89B	20.96	―	1.68%	3.07%	-32.45%
7914	68 Neutral	¥43.71B	12.47	―	3.71%	-0.04%	93.95%
7919	66 Neutral	¥3.61B	10.48	―	3.69%	0.62%	-24.08%
7939	64 Neutral	¥2.36B	13.56	―	3.72%	9.08%	40.91%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7916	61 Neutral	¥5.64B	19.43	―	2.72%	-1.30%	―
3948	53 Neutral	¥7.03B	43.99	―	2.94%	-2.81%	57.37%