Shofu Inc. (7979) AI Stock Analysis

• Market Cap: ¥70.80B
• Dividend Yield: 2.68%
• Average Volume (3M): 76.04K
• Price to Earnings (P/E): 17.4
• Beta (1Y): 0.62
• Revenue Growth: 6.82%
• EPS Growth: -1.08%
• Country: JP
• Employees: 1,369
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 24.03
• Shares Outstanding: 35,788,177
• 10 Day Avg. Volume: 80,080
• 30 Day Avg. Volume: 76,043
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥2,156.00
• Price Target Upside: 11.02% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 72 Outperform
• Price Target: ¥2,156.00 ▲(11.02% Upside)

Shofu Inc. scores well due to its strong financial performance, characterized by robust revenue growth and profitability. The valuation is reasonable, offering a good balance of growth and income potential. Technical indicators suggest a neutral market sentiment, which slightly tempers the overall score.

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 materials. The company's key revenue streams include the direct sale of dental ceramics and composites to dental professionals and laboratories, as well as the provision of dental equipment. In addition to product sales, Shofu benefits from strategic partnerships and collaborations with dental institutions and professionals that enhance its market presence. The company also invests in research and development to innovate and expand its product offerings, which contributes to its competitive advantage and earnings growth.

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.

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	38.70B	38.70B	35.08B	31.68B	28.14B	24.68B
Gross Profit	22.99B	22.99B	21.00B	18.70B	16.17B	13.60B
EBITDA	7.08B	7.23B	6.47B	5.40B	4.12B	3.26B
Net Income	4.32B	4.32B	3.65B	3.13B	2.55B	1.67B
Balance Sheet
Total Assets	49.99B	49.99B	50.09B	43.73B	40.71B	37.81B
Cash, Cash Equivalents and Short-Term Investments	10.89B	10.89B	9.72B	9.58B	9.06B	6.94B
Total Debt	213.00M	213.00M	281.00M	1.19B	1.48B	1.87B
Total Liabilities	7.26B	7.26B	8.48B	8.21B	7.77B	7.62B
Stockholders Equity	42.66B	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: 1942.00
• 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 1942 is below the 20-day moving average (MA) of 1952.27, below the 50-day MA of 1973.01, and below the 200-day MA of 2033.94, indicating a bearish trend. The MACD of 1.55 indicates Negative momentum. The RSI at 45.07 is Neutral, neither overbought nor oversold. The STOCH value of 42.93 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	75 Outperform	¥53.03B	13.04	24.32%	2.93%	12.18%	34.17%
7730	73 Outperform	¥125.51B	22.99	12.01%	3.06%	5.82%	-20.09%
7979	72 Outperform	¥70.80B	17.41	―	2.68%	6.82%	-1.08%
7780	70 Outperform	¥86.50B	17.80	6.53%	2.46%	3.13%	2.91%
3593	69 Neutral	¥116.21B	94.61	2.05%	1.63%	-0.91%	-52.71%
7743	67 Neutral	¥16.28B	14.61	6.05%	2.81%	2.38%	-48.68%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Shofu Inc. Corporate Events

Shofu Inc. Reports Q1 Financial Results with Mixed Performance

Shofu Inc. reported its consolidated financial results for the first quarter ending June 30, 2025, showing a slight increase in net sales by 0.5% compared to the previous year. However, the company experienced declines in operating income, ordinary income, and net income attributable to owners, with decreases of 3.6%, 18.1%, and 23.7% respectively. The company’s financial position remains stable with a high equity ratio of 84.8%. Despite the challenges, Shofu Inc. maintains its forecast for the fiscal year ending March 31, 2026, with expected growth in net sales by 5.6%.

Shofu Inc. Completes Disposal of Treasury Stock for Compensation

Shofu Inc. announced the completion of a disposal of treasury stock as restricted stock compensation, following a resolution by its Board of Directors. The disposal involved 29,721 shares of common stock, with a total value of ¥61,344,144, allocated to directors and executive officers, potentially impacting the company’s financial structure and stakeholder interests.

Shofu Inc. Revises Corporate Governance Guidelines

Shofu Inc. has announced a revision to its Corporate Governance Guidelines following the abolition of its Takeover Response Policies. This change, approved at the Board of Directors meeting, signifies a shift in the company’s approach to corporate governance, potentially impacting its defense strategies and shareholder relations.

Shofu Inc. Announces Disposal of Treasury Stock for Executive Compensation

Shofu Inc. has announced a resolution to dispose of 29,721 shares of its treasury stock as restricted stock compensation for its directors and executive officers. This move is part of a plan to align the interests of its leadership with shareholders and promote sustainable corporate value growth. The restricted stock will have a 30-year transfer restriction period, emphasizing long-term value creation and retention of key personnel.