Kawai Musical Instruments Manufacturing Co., Ltd. (7952) AI Stock Analysis

• Market Cap: ¥25.29B
• Dividend Yield: 3.56%
• Average Volume (3M): 18.44K
• Price to Earnings (P/E): 31.7
• Beta (1Y): 0.68
• Revenue Growth: -5.25%
• EPS Growth: -4.95%
• Country: JP
• Employees: 2,895
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Leisure
• EPS (TTM): 18.18
• Shares Outstanding: 9,011,560
• 10 Day Avg. Volume: 21,160
• 30 Day Avg. Volume: 18,443
• PEG Ratio: -0.71
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.34
• P/FCF Ratio: -7.74
• 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: ¥2,798.00 ▲(7.00% Upside)

The overall stock score is primarily influenced by the company's challenging financial performance, characterized by declining revenues and profitability. Technical analysis indicates a bearish trend, further impacting the score. The valuation component provides some support due to a reasonable dividend yield, but the high P/E ratio suggests caution. The absence of earnings call and corporate events data means these factors do not influence the score.

Positive Factors

Strong Equity Base

A strong equity base with an improved equity ratio indicates financial stability and resilience, providing a buffer against economic downturns.

Conservative Leverage

Low leverage enhances financial flexibility and reduces risk, allowing the company to navigate economic challenges without excessive debt burden.

Global Distribution Network

A robust global distribution network supports revenue stability and growth by ensuring wide market reach and customer access.

Negative Factors

Declining Revenues

Declining revenues signal potential market share loss or demand issues, impacting long-term growth prospects and financial health.

Profitability Challenges

Reduced profitability margins indicate operational inefficiencies and cost management issues, threatening sustainable earnings.

Cash Flow Constraints

Negative operating cash flow highlights liquidity challenges, limiting the company's ability to invest in growth and manage obligations.

Kawai Musical Instruments Manufacturing Co., Ltd. Business Overview & Revenue Model

Company Description

Kawai Musical Instruments Manufacturing Co., Ltd. manufactures and sells musical instruments under the Kawai brand. It offers acoustic and digital piano instruments. The company also develops and sells computer music software, as well as software for small businesses; promotes music appreciation through lectures and concerts; and manufactures and sells precision metals, wood products, and electronic devices. In addition, it operates music and physical education schools; and learning centers in China, Taiwan, and Indonesia. Kawai Musical Instruments Manufacturing Co., Ltd. was founded in 1927 and is headquartered in Hamamatsu, Japan.

How the Company Makes Money

Kawai generates revenue primarily through the sale of its musical instruments, which include both acoustic and digital pianos. The company has a well-established distribution network that allows it to reach customers globally, including direct sales to retailers and partnerships with distributors. Key revenue streams include the sale of new instruments, replacement parts, and accessories. Additionally, Kawai benefits from service agreements and warranties offered on its products. The company also engages in strategic partnerships with music schools and educational institutions, which further enhances its reach and visibility in the market, contributing positively to its earnings.

Kawai Musical Instruments Manufacturing Co., Ltd. Financial Statement Overview

Summary

The company faces declining revenues and profitability, with a significant drop in net profit margin and negative cash flow. Despite a strong balance sheet with low leverage, operational inefficiencies and cash flow constraints pose risks.

Income Statement

The income statement shows a decline in total revenue over the past year, with the latest figure at ¥72.918 billion compared to ¥80.192 billion in the previous year, indicating a revenue decrease of approximately 9.06%. The gross profit margin remained relatively stable at around 25.1%, but the net profit margin significantly dropped from 3.47% to 0.56%, reflecting reduced profitability. EBIT and EBITDA margins also declined, illustrating decreased operational efficiency. The company faces challenges in maintaining profitability amidst declining revenues.

Balance Sheet

The balance sheet reveals a solid equity base, with the equity ratio improving to 60.2% from 58.4% last year, indicating financial stability. The debt-to-equity ratio is relatively low at 0.19, suggesting conservative leverage. However, the return on equity decreased to 0.91% from 6.48%, reflecting diminished profitability on shareholders' investments. Overall, the balance sheet remains strong but faces profitability challenges.

Cash Flow

The cash flow analysis highlights significant challenges, with operating cash flow turning negative at ¥-1.611 billion from a positive ¥1.442 billion, and free cash flow dropping to ¥-3.171 billion from ¥0.102 billion, reflecting cash flow constraints. The operating cash flow to net income ratio is negative, indicating difficulties in converting net income to cash. The free cash flow to net income ratio also turned negative, pointing to operational cash flow struggles and potential liquidity issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	73.11B	72.92B	80.19B	87.77B	85.70B	67.52B
Gross Profit	18.38B	18.30B	20.71B	22.82B	23.48B	18.10B
EBITDA	2.35B	2.28B	5.89B	7.35B	8.93B	4.82B
Net Income	518.00M	405.00M	2.78B	3.67B	5.05B	2.58B
Balance Sheet
Total Assets	74.43B	73.99B	73.54B	70.82B	68.39B	60.70B
Cash, Cash Equivalents and Short-Term Investments	13.55B	13.30B	18.23B	19.32B	22.66B	19.47B
Total Debt	10.21B	8.45B	8.12B	8.93B	10.29B	11.44B
Total Liabilities	31.99B	29.45B	30.40B	32.36B	34.84B	32.77B
Stockholders Equity	42.44B	44.54B	42.93B	38.26B	33.38B	27.82B
Cash Flow
Free Cash Flow	0.00	-3.17B	102.00M	-2.06B	4.02B	4.08B
Operating Cash Flow	0.00	-1.61B	1.44B	-613.00M	5.08B	4.94B
Investing Cash Flow	0.00	-2.37B	-943.00M	-1.36B	-877.00M	-899.00M
Financing Cash Flow	0.00	-1.03B	-1.84B	-2.27B	-1.80B	4.80B

Kawai Musical Instruments Manufacturing Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2615.00
• 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:7952, the sentiment is Positive. The current price of 2615 is below the 20-day moving average (MA) of 2675.20, above the 50-day MA of 2578.32, and below the 200-day MA of 2617.62, indicating a bullish trend. The MACD of 94.43 indicates Negative momentum. The RSI at 79.94 is Negative, neither overbought nor oversold. The STOCH value of 89.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7952.

Kawai Musical Instruments Manufacturing Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7944	75 Outperform	¥99.23B	14.30	―	4.78%	-1.25%	9.33%
7951	68 Neutral	¥543.98B	29.63	3.68%	2.35%	-4.47%	-4.52%
7952	64 Neutral	¥25.29B	31.72	―	3.56%	-5.25%	-4.95%
7906	62 Neutral	¥295.60B	25.28	15.93%	0.72%	20.06%	17.89%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7990	61 Neutral	¥48.21B	9.46	―	3.94%	0.74%	41.25%
7865	42 Neutral	¥1.61B	202.48	―	―	―	―

Kawai Musical Instruments Manufacturing Co., Ltd. Corporate Events

Kawai Musical Instruments Reports Decreased Sales but Anticipates Future Growth

Kawai Musical Instruments Manufacturing Co., Ltd. reported a decrease in net sales by 2.7% for the six months ending September 30, 2025, compared to the previous year. Despite a challenging financial performance, the company forecasts a positive turnaround for the fiscal year ending March 31, 2026, with expected increases in net sales and profits, indicating potential recovery and growth in the upcoming period.

The most recent analyst rating on (JP:7952) stock is a Hold with a Yen2634.00 price target. To see the full list of analyst forecasts on Kawai Musical Instruments Manufacturing Co., Ltd. stock, see the JP:7952 Stock Forecast page.