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

• Market Cap: ¥2.35B
• Dividend Yield: 3.72%
• Average Volume (3M): 2.86K
• Price to Earnings (P/E): 17.4
• Beta (1Y): 0.24
• 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 margin stability

Consistent gross margins near 28-30% indicate durable cost discipline and pricing power in the core business. Stable gross margins support underlying profitability even if top-line growth is uneven, helping sustain operating margins and cash generation over the next several months.

Strong equity position

An equity ratio above 50% and moderate leverage provide financial flexibility, reduce solvency risk, and allow the company to fund operations, capex, or dividends without relying heavily on external financing. This balance sheet resilience matters over a multi-month horizon.

Recent free cash flow recovery

A recovery in free cash flow in 2025 signals an improving ability to convert earnings into cash, enabling debt reduction, reinvestment, or shareholder returns. While historical volatility exists, renewed FCF supports operational stability and strategic choices over coming quarters.

Negative Factors

Declining net income & ROE

A multi-year decline in net income and falling ROE point to weakening bottom-line efficiency and shareholder returns. If trends persist, lower profitability will constrain reinvestment capacity, reduce strategic optionality, and pressure margins and cash generation over the next several months.

Cash flow volatility

Repeated negative FCF in past years and inconsistent OCF-to-net-income ratios indicate unreliable cash generation. Volatile cash flow increases refinancing and liquidity risk and makes sustaining dividends, capex, or debt repayments more difficult across a 2-6 month horizon if volatility reoccurs.

Inconsistent revenue and EPS decline

Inconsistent top-line growth combined with a material negative EPS growth rate signals pressure on core demand or margin conversion. Declining EPS constrains retained earnings and could limit investment and dividend stability if earnings do not recover sustainably over coming quarters.

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

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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	1.68B	1.75B	1.69B	1.58B
EBITDA	420.66M	402.50M	452.23M	445.01M	328.33M
Net Income	175.03M	183.94M	252.48M	186.20M	321.56M
Balance Sheet
Total Assets	5.56B	5.77B	6.07B	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	2.62B	3.05B	2.91B	3.20B
Stockholders Equity	3.27B	3.15B	3.01B	2.81B	2.65B
Cash Flow
Free Cash Flow	392.75M	-408.60M	-299.18M	202.92M	233.96M
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: Negative

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 626.90, below the 50-day MA of 613.20, and above the 200-day MA of 563.71, indicating a bullish trend. The MACD of 4.12 indicates Positive momentum. The RSI at 55.44 is Neutral, neither overbought nor oversold. The STOCH value of 89.58 is Negative, 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
3958	70 Outperform	¥3.24B	5.78	―	3.30%	-3.41%	-24.95%
7914	68 Neutral	¥41.47B	7.42	―	3.71%	-0.04%	93.95%
7919	66 Neutral	¥3.62B	6.84	―	3.69%	0.62%	-24.08%
7939	64 Neutral	¥2.35B	17.41	―	3.72%	9.08%	40.91%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7916	61 Neutral	¥5.59B	-22.35	―	2.72%	-1.30%	―
3948	53 Neutral	¥6.76B	45.76	―	2.94%	-2.81%	57.37%