Shofu Inc. (7979) AI Stock Analysis

• Market Cap: ¥64.52B
• Dividend Yield: 2.83%
• Average Volume (3M): 91.33K
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.63
• Revenue Growth: 3.69%
• EPS Growth: 1.86%
• Country: JP
• Employees: 1,369
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 48.99
• Shares Outstanding: 35,788,177
• 10 Day Avg. Volume: 72,670
• 30 Day Avg. Volume: 91,333
• PEG Ratio: 0.97
• Price to Book (P/B): 1.76
• Price to Sales (P/S): 1.94
• P/FCF Ratio: 33.82
• 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: 69 Neutral
• Price Target: ¥2,079.00 ▲(13.30% Upside)

Shofu Inc. demonstrates strong financial performance with robust revenue growth and profitability, contributing significantly to the overall score. However, technical analysis indicates a bearish trend, and the valuation is fair but not exceptional. The absence of earnings call data and corporate events limits further insights.

Positive Factors

Revenue Growth

The significant revenue growth indicates robust demand for Shofu's products, enhancing its market position and supporting long-term business expansion.

Balance Sheet Health

A strong balance sheet with low leverage reduces financial risk and provides flexibility for strategic investments and growth opportunities.

Profitability

High profitability margins reflect operational efficiency and pricing power, supporting sustainable earnings and competitive advantage.

Negative Factors

Earnings Growth

Negative EPS growth suggests challenges in translating revenue growth into earnings, potentially impacting investor confidence and valuation.

Free Cash Flow Sustainability

Unsustainable free cash flow growth could lead to future liquidity issues, affecting the company's ability to fund operations and investments.

Return on Equity

While ROE is positive, there is room for improvement to enhance shareholder returns and align with industry benchmarks.

Shofu Inc. Business Overview & Revenue Model

Company Description

Shofu Inc. manufactures and sells dental materials and equipment worldwide. Its products include artificial teeth, dental porcelains, dental abrasives and polishers, dental alloys, dental cements, restorative materials, dental waxes, dental investments/stones, orthodontic devices, and preventive infection control goods. The company was formerly known as Shofu Dental Mfg. Co., Ltd. and changed its name to Shofu Inc. in 1983. Shofu Inc. was founded in 1922 and is based in Kyoto, Japan.

How the Company Makes Money

Shofu Inc. generates revenue primarily through the sale of its dental products and equipment to dental clinics, laboratories, and distributors worldwide. The company's revenue model is based on direct sales, as well as partnerships with dental distributors who help market and sell its products. Key revenue streams include sales of restorative materials, orthodontic products, and dental imaging technologies. Additionally, Shofu invests in research and development to innovate new products, which can lead to higher demand and sales. Strategic partnerships with dental professionals and educational institutions also enhance its market presence and contribute to its earnings.

Shofu Inc. Financial Statement Overview

Summary

Shofu Inc. exhibits strong financial health with impressive revenue growth and profitability. The balance sheet is robust with low leverage, and cash flows are solid, though the sustainability of free cash flow growth should be watched. The company is well-positioned in the medical instruments and supplies industry, with a stable financial foundation and growth potential.

Income Statement

Shofu Inc. has demonstrated strong revenue growth with a 45.7% increase in the latest year, indicating robust demand for its products. The company maintains healthy profitability with a gross profit margin of 59.4% and a net profit margin of 11.2%. EBIT and EBITDA margins are also solid at 15.9% and 18.7%, respectively, showcasing operational efficiency. Overall, the income statement reflects a positive growth trajectory and strong profitability.

Balance Sheet

The balance sheet of Shofu Inc. is stable with a low debt-to-equity ratio, indicating minimal leverage and financial risk. The return on equity is 10.1%, reflecting effective use of shareholder funds to generate profits. The equity ratio stands at 85.3%, suggesting a strong capital structure. While the company is financially sound, the ROE could be improved to enhance shareholder returns.

Cash Flow

Shofu Inc. shows a strong operating cash flow to net income ratio of 0.66, indicating efficient cash generation from operations. The free cash flow to net income ratio is 0.64, reflecting good cash conversion. However, the free cash flow growth rate is extremely high due to a low base effect, which may not be sustainable. Overall, the cash flow position is healthy but requires monitoring for consistency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	38.75B	38.70B	35.08B	31.68B	28.14B	24.68B
Gross Profit	23.09B	22.99B	21.00B	18.70B	16.17B	13.60B
EBITDA	6.99B	7.23B	6.47B	5.40B	4.52B	3.26B
Net Income	4.05B	4.32B	3.65B	3.13B	2.55B	1.67B
Balance Sheet
Total Assets	50.18B	49.99B	50.09B	43.73B	40.71B	37.81B
Cash, Cash Equivalents and Short-Term Investments	9.96B	10.89B	9.72B	9.58B	9.06B	6.94B
Total Debt	1.87B	213.00M	281.00M	1.19B	1.48B	1.87B
Total Liabilities	7.51B	7.26B	8.48B	8.21B	7.77B	7.62B
Stockholders Equity	42.58B	42.66B	41.53B	35.44B	32.87B	30.14B
Cash Flow
Free Cash Flow	0.00	2.22B	1.38B	1.54B	2.67B	1.73B
Operating Cash Flow	0.00	3.45B	3.09B	3.17B	3.74B	2.83B
Investing Cash Flow	0.00	-914.00M	-1.29B	-1.29B	-1.29B	-4.08B
Financing Cash Flow	0.00	-1.78B	-2.10B	-1.46B	-1.07B	3.02B

Shofu Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1835.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7979, the sentiment is Negative. The current price of 1835 is above the 20-day moving average (MA) of 1829.30, below the 50-day MA of 1861.58, and below the 200-day MA of 1974.99, indicating a neutral trend. The MACD of -10.92 indicates Negative momentum. The RSI at 49.55 is Neutral, neither overbought nor oversold. The STOCH value of 69.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7979.

Shofu Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5889	79 Outperform	¥46.72B	11.38	―	3.21%	12.92%	29.48%
7780	74 Outperform	¥119.36B	23.11	5.97%	1.78%	3.17%	7.07%
7730	73 Outperform	¥146.30B	31.12	―	2.73%	5.10%	-26.13%
7979	69 Neutral	¥64.52B	14.34	―	2.83%	3.69%	1.86%
7743	67 Neutral	¥17.07B	12.46	―	2.65%	0.81%	-26.76%
3593	59 Neutral	¥144.02B	257.19	0.78%	1.31%	-2.06%	-79.17%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Shofu Inc. Corporate Events

Shofu Inc. Reports Modest Sales Growth Amid Increased R&D Investment

Shofu Inc. reported a slight increase in consolidated net sales for the first half of the fiscal year ending March 2026, with a 1.1% year-over-year growth. The dental business remains a major contributor to sales, although there was a minor decline in overseas sales. The company also noted a significant increase in R&D expenses, indicating a focus on innovation and product development.

Shofu Inc. Reports Mixed Financial Results for H1 2025

Shofu Inc. reported its consolidated financial results for the six months ending September 30, 2025, showing a slight increase in net sales by 1.1% to 19,095 million yen. However, operating income decreased by 7.5% compared to the previous year. The company experienced a significant rise in comprehensive income by 313.2% to 2,896 million yen, indicating improved profitability despite the decline in operating income. The company also noted a two-for-one stock split, affecting the calculation of earnings per share. The financial outlook for the fiscal year ending March 31, 2026, projects a 5.6% increase in net sales, with a slight decrease in operating and ordinary income, but an 8.9% increase in net income attributable to owners of the parent.

Shofu Inc. Revises Earnings Forecast Amid Market Challenges

Shofu Inc. has revised its earnings forecast for the first half of the fiscal year ending March 31, 2026, due to lower-than-expected demand in Japan and challenging overseas business conditions. Despite a decrease in net sales, the company anticipates higher operating and ordinary income due to deferred expenses and increased net income from the early sale of cross-shareholdings. The full-year earnings forecast remains unchanged, with the company aiming to maintain profitability while monitoring the business environment.