NIHON ISK Co., Ltd. (7986) AI Stock Analysis

• Market Cap: ¥3.41B
• Dividend Yield: 1.69%
• Average Volume (3M): 1.89K
• Price to Earnings (P/E): 7.3
• Beta (1Y): 0.20
• Revenue Growth: 1.09%
• EPS Growth: 2.37%
• Country: JP
• Employees: 281
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): 62.45
• Shares Outstanding: 1,776,000
• 10 Day Avg. Volume: 2,740
• 30 Day Avg. Volume: 1,886
• PEG Ratio: 10.59
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 0.45
• P/FCF Ratio: 7.76
• 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: 78 Outperform
• Price Target: ¥2,133.00 ▲(19.70% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by strong financial strength (notably a debt-free balance sheet) and improved profitability, supported by an attractive low P/E. The main offsets are historically uneven cash-flow generation and technically overbought signals despite a strong uptrend.

Positive Factors

Balance sheet strength

A debt-free balance sheet with steadily growing equity materially lowers insolvency and refinancing risk. This structural strength gives management durable financial flexibility to fund capex, absorb demand shocks, pursue opportunistic M&A, and sustain operations through cyclical steel-market downturns.

Improving profitability and margins

Sharply higher 2025 revenue and materially improved margins point to stronger pricing, mix, or cost control versus the 2022 trough. If sustained, these improvements enhance operating leverage, boost returns on equity, and create durable cash generation capacity available for reinvestment or shareholder returns.

Recovering cash generation

Recent sequential improvement to positive operating and free cash flow (FCF near net income at ~0.88–0.94x) suggests the company can internally fund more of its needs. Persistently positive FCF supports sustainable capex, modest dividends, and reduces reliance on external financing over the medium term.

Negative Factors

Cash-flow volatility

Historic swings between negative and positive cash flows indicate working-capital sensitivity and uneven conversion of earnings to cash. That instability can force ad hoc financing, restrict consistent reinvestment, and reduce predictability of shareholder distributions during weaker cycles.

Earnings and revenue cyclicality

The company's results show meaningful cycle exposure: revenue and margins fell in 2022 and margins fluctuated thereafter. In a capital‑intensive steel industry, cyclical demand and price swings can materially compress margins and returns, complicating long-term planning and requiring conservative financial buffers.

Concentrated 2025 growth

A single-year revenue step-up raises sustainability questions: if growth reflects one-off contracts, inventory timing, or transient market factors, baseline revenue could revert. Reliance on concentrated year-over-year jumps increases forecasting risk and could leave margins exposed if volumes or pricing normalize.

NIHON ISK Co., Ltd. Business Overview & Revenue Model

Company Description

Nihon Isk Co.,Ltd. manufactures and sells fireproof and anti-theft vaults for commercial and households in Japan. It also manufactures and sells dental equipment and steel furniture. The company was formerly known as King Industrial Co., Ltd. and changed its name to Nihon Isk Co.,Ltd. in April 2014. Nihon Isk Co.,Ltd. was founded in 1919 and is headquartered in Tsukuba, Japan.

How the Company Makes Money

Nihon ISK Co., Ltd. generates revenue through the sale of its industrial valves and equipment to businesses across multiple sectors. The company's primary revenue streams include direct sales to industrial clients, partnerships with distributors, and long-term supply agreements with key customers. Its earnings are significantly bolstered by its reputation for producing durable and efficient products, which leads to repeat business and customer loyalty. Additionally, Nihon ISK may engage in strategic collaborations or joint ventures that enhance its market reach and product offerings.

NIHON ISK Co., Ltd. Financial Statement Overview

Summary

Strong balance sheet with zero debt and growing equity supports resilience (Balance Sheet Score: 90). Profitability and growth improved meaningfully with a major 2025 revenue step-up and healthier margins (Income Statement Score: 78). The main risk is cash-flow inconsistency, including negative operating/free cash flow in 2022–2023 despite improvement in 2024–2025 (Cash Flow Score: 63).

Income Statement

Profitability and growth are solid. Revenue rose steadily from 2023–2025, with a sharp acceleration in 2025 (about +76% vs. 2024). Margins also improved versus the weaker 2022 year: 2025 gross margin ~30.6% and net margin ~6.9%, with EBIT margin ~9.8%. The main offset is volatility across the cycle (notably the 2022 dip in margins and revenue), and net margin eased slightly in 2025 versus 2024 despite strong top-line growth.

Balance Sheet

Balance sheet strength stands out with zero reported debt across all years and a growing equity base (equity rising from ~3.29B in 2020 to ~4.63B in 2025). Returns on equity have been consistently positive and generally healthy (~9–10% in most years), though they dipped meaningfully in 2022 (~5%) and eased in 2025 (~9%) versus 2024 (~10%). Overall, low leverage reduces financial risk and supports resilience through downturns.

Cash Flow

Cash generation is positive recently but uneven. Operating cash flow improved in 2024–2025 (about 329M to 401M) and free cash flow was solidly positive in 2024–2025 (~311M to ~353M), with free cash flow running close to net income in those years (~0.88–0.94x). However, cash flow quality is mixed over the period: operating cash flow was negative in 2022 and free cash flow turned negative in 2022 and 2023, indicating periods of higher cash investment needs and/or working-capital swings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	6.02B	6.06B	5.90B	5.71B	5.25B	5.52B
Gross Profit	1.76B	1.86B	1.73B	1.67B	1.35B	1.65B
EBITDA	576.24M	670.09M	597.00M	645.20M	217.77M	520.73M
Net Income	386.20M	418.69M	433.58M	375.18M	181.37M	332.47M
Balance Sheet
Total Assets	6.24B	6.57B	6.21B	5.88B	5.44B	5.52B
Cash, Cash Equivalents and Short-Term Investments	1.07B	1.41B	1.17B	979.75M	1.22B	1.49B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	1.75B	1.86B	1.85B	1.87B	1.73B	1.88B
Stockholders Equity	4.42B	4.63B	4.28B	3.94B	3.66B	3.58B
Cash Flow
Free Cash Flow	0.00	353.35M	310.94M	-186.97M	-164.60M	63.44M
Operating Cash Flow	0.00	400.65M	329.33M	378.64M	-30.53M	84.77M
Investing Cash Flow	0.00	-54.00M	-22.67M	-501.20M	-138.88M	-24.94M
Financing Cash Flow	0.00	-105.81M	-116.18M	-113.58M	-108.67M	-55.82M

NIHON ISK Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1782.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7986, the sentiment is Positive. The current price of 1782 is below the 20-day moving average (MA) of 1856.50, below the 50-day MA of 1807.20, and above the 200-day MA of 1681.33, indicating a bullish trend. The MACD of 47.48 indicates Negative momentum. The RSI at 71.38 is Negative, neither overbought nor oversold. The STOCH value of 79.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7986.

NIHON ISK Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5697	79 Outperform	¥4.83B	8.48	―	2.84%	4.52%	82.92%
7986	78 Outperform	¥3.41B	7.31	―	1.69%	1.09%	2.37%
5458	64 Neutral	¥3.22B	11.82	―	4.03%	-1.76%	-28.08%
5609	63 Neutral	¥4.18B	11.89	―	3.62%	-4.20%	-11.70%
5986	63 Neutral	¥5.29B	9.02	―	2.11%	-1.86%	7.29%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
5973	56 Neutral	¥3.90B	28.39	―	2.96%	6.61%	13.49%