Shofu Inc. (7979) AI Stock Analysis

• Market Cap: ¥60.27B
• Dividend Yield: 2.83%
• Average Volume (3M): 91.33K
• Price to Earnings (P/E): 19.9
• Beta (1Y): 0.66
• Revenue Growth: 3.69%
• EPS Growth: 1.86%
• Country: JP
• Employees: 1,369
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 22.90
• 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): 121
• Revenue Forecast (FY): ¥40.04B

• Rating: 69 Neutral
• Price Target: ¥2,079.00 ▲(11.18% Upside)
• Action: Downgraded Date: 10/29/25
• Date: Action: Downgraded 10/29/25

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

Recurring consumables business model

Shofu’s mix of recurring consumables (dental materials) plus equipment sales creates stable, repeatable revenue streams tied to ongoing dental procedures. This business model supports predictable demand, retention via distributor/clinic relationships, and steady cash flow over multi-quarter horizons.

Robust revenue growth and margins

A 45.7% revenue jump alongside high gross (59.4%) and healthy net (11.2%) margins indicates durable product pricing power and operational efficiency. These margin levels suggest the company can sustain profitability through cost structure advantages and product mix even as volumes normalize.

Strong balance sheet and low leverage

An equity ratio of 85.3% and minimal leverage provide financial flexibility for R&D, capex, or M&A without pressuring cash flows. Low financial risk supports resilience to industry cycles and preserves capacity to invest in product development and international expansion over the next several quarters.

Negative Factors

Free cash flow growth sustainability

The headline FCF growth is inflated by a low base, signaling potential mean reversion risk. If future cash conversion normalizes, growth in available cash for dividends, buybacks or reinvestment could slow, constraining strategic initiatives and reducing margin of safety over several quarters.

Modest return on equity

ROE around 10% is respectable but modest relative to high-growth peers; this suggests limited leverage of equity to generate returns. Without improvements in asset turnover, margin expansion, or capital allocation, shareholder returns may lag competitors over a multi-quarter horizon.

Negative EPS growth trend

A negative EPS growth rate indicates earnings per share have contracted recently, signaling pressure on profitability after accounting for shares. Persistent EPS decline can erode investor confidence and limit reinvestment or dividend capacity unless reversed by sustained margin or volume improvements.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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	457.00M	1.34B	1.60B	1.95B
Total Liabilities	7.51B	7.26B	8.48B	8.21B	7.77B	7.61B
Stockholders Equity	42.58B	42.66B	41.53B	35.44B	32.88B	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: 1870.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 1870 is above the 20-day moving average (MA) of 1808.35, above the 50-day MA of 1825.44, and below the 200-day MA of 1904.10, indicating a bearish trend. The MACD of -24.37 indicates Positive momentum. The RSI at 32.73 is Neutral, neither overbought nor oversold. The STOCH value of 11.49 is Positive, 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
7980	82 Outperform	¥7.22B	6.06	―	1.93%	4.41%	-16.07%
9340	77 Outperform	¥6.72B	13.64	―	2.95%	7.84%	11.34%
7730	71 Outperform	¥148.57B	18.72	―	2.73%	5.10%	-26.13%
7813	69 Neutral	¥2.84B	8.44	―	2.21%	20.58%	221.52%
7979	69 Neutral	¥60.27B	19.92	―	2.83%	3.69%	1.86%
7716	63 Neutral	¥234.08B	-69.02	-2.06%	2.66%	5.43%	-20.67%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Shofu Inc. Corporate Events

Shofu Reshapes Executive and General Affairs Leadership

Shofu Inc. announced that its board of directors has approved changes to its senior management structure, effective April 1, 2026, focusing on the Human Resources and General Affairs functions. Managing Executive Officer Shinya Teramoto will step down from his concurrent role as General Manager of the General Affairs Department to concentrate on overseeing Human Resources and General Affairs at the executive level.

In conjunction with this shift, Hideki Imaoka, previously serving as Senior Staff on Special Assignment in the General Affairs Department, will be promoted to General Manager of the General Affairs Department. The reorganization is expected to clarify responsibilities, strengthen administrative governance, and support the company’s internal operations as it pursues its strategic and organizational goals.

The most recent analyst rating on (JP:7979) stock is a Hold with a Yen2060.00 price target. To see the full list of analyst forecasts on Shofu Inc. stock, see the JP:7979 Stock Forecast page.

Shofu Reshapes Organization and Leadership, Elevates IT to Department Level

Shofu Inc. has approved a series of organizational and personnel changes effective April 1, 2026, centered on the creation of a dedicated Information Technology Department by upgrading its existing Information Systems Section from within the Finance Department, reflecting the growing strategic importance of digitalization and information security for the group. Alongside this structural shift, the company is realigning its management ranks, including expanding the portfolio of Representative Director and Senior Managing Executive Officer Takahiro Umeda to cover Information Technology in addition to Finance and the Nail Business, and reassigning executive officers and general managers across internal audit, finance, human resources, sales, international operations, and R&D, in an effort to strengthen governance, operational oversight, and support for future digital and international expansion.

The most recent analyst rating on (JP:7979) stock is a Hold with a Yen2060.00 price target. To see the full list of analyst forecasts on Shofu Inc. stock, see the JP:7979 Stock Forecast page.

Shofu’s Margins Lag Despite Modest Sales Growth in Nine-Month Results

While consolidated nine-month sales edged up 0.9% to ¥29.1 billion on steady dental demand, operating income slipped 11% as softer machinery and cement volumes and rising R&D spending weighed on margins even though R&D intensity rose to 5.6%. Management still targets full-year revenue of ¥40.9 billion, suggesting confidence that stronger chemical products and disciplined cost controls can offset weak equipment sales, but investors must watch whether the rebound in profitability materializes given the higher operating leverage embedded in the plan.

The most recent analyst rating on (JP:7979) stock is a Hold with a Yen2060.00 price target. To see the full list of analyst forecasts on Shofu Inc. stock, see the JP:7979 Stock Forecast page.

Shofu Posts Flat Nine-Month Profit as Margins Tighten but Keeps Full-Year Outlook and Dividend Plan

Shofu Inc. reported marginally higher consolidated net sales of ¥29.1 billion for the nine months to 31 December 2025, up 0.9% year on year, but saw profitability weaken, with operating income down 11.4% and profit attributable to owners of parent slipping 2.1% to ¥3.4 billion, leading to a slight decline in earnings per share despite a stronger comprehensive income figure. The balance sheet remains robust, with total assets rising to ¥53.3 billion, an equity ratio above 85% and net assets per share increasing, while the company kept its full-year earnings forecast unchanged—expecting 5.6% sales growth but a modest decline in operating and ordinary income—alongside a planned full-year dividend of ¥53 per share following its recent two-for-one stock split, underscoring a continued commitment to shareholder returns despite near-term profit pressure.

The most recent analyst rating on (JP:7979) stock is a Hold with a Yen2060.00 price target. To see the full list of analyst forecasts on Shofu Inc. stock, see the JP:7979 Stock Forecast page.

Shofu Streamlines Shareholder Benefits and Adjusts Discounted Product Pricing

Shofu Inc. has announced partial amendments to its shareholder benefits plan, primarily to streamline operations and align logistics, by unifying the shipment period for complimentary company products to late June each year. The company is also revising the preferential pricing within the shareholder plan for its medicated liquid toothpaste “Hapica Ace” in line with a broader price revision, while maintaining the range of eligible shareholders and the core lineup of dental care products offered at discounted rates, a move aimed at improving administrative efficiency and sustaining the attractiveness of its benefits program for investors.

The most recent analyst rating on (JP:7979) stock is a Hold with a Yen2079.00 price target. To see the full list of analyst forecasts on Shofu Inc. stock, see the JP:7979 Stock Forecast page.