Sailor Pen Co., Ltd. (7992) AI Stock Analysis

• Market Cap: ¥3.38B
• Dividend Yield: N/A
• Average Volume (3M): 37.38K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.13
• Revenue Growth: 4.11%
• EPS Growth: 33.06%
• Country: JP
• Employees: 212
• Sector: Industrials
• Sector Strength: 72
• Industry: Business Equipment & Supplies
• EPS (TTM): 0.09
• Shares Outstanding: 29,659,554
• 10 Day Avg. Volume: 48,530
• 30 Day Avg. Volume: 37,376
• PEG Ratio: 0.19
• Price to Book (P/B): 3.28
• Price to Sales (P/S): 0.79
• P/FCF Ratio: -100.24
• 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: 42 Neutral
• Price Target: ¥108.00 ▼(-0.92% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is held back primarily by weak financial fundamentals: ongoing operating losses, persistently negative free cash flow, and rising leverage despite improved margins and narrower losses. Technicals add only modest support with neutral RSI but negative MACD and price below the 200-day average. Valuation is difficult to assess because the company is loss-making and no dividend yield is provided.

Positive Factors

Improving profitability and gross margin

Material margin recovery and stronger gross margin indicate improved pricing, cost control or mix shifts. This durable improvement reduces the distance to breakeven, enhances operational resilience to revenue volatility, and provides a clearer path to sustainable profits if the trend continues.

Operating cash flow turned positive in 2025

A positive operating cash flow inflection signals improving core cash generation from operations rather than financing. If sustained, it supports working capital needs, reduces reliance on external funding for day-to-day operations, and underpins the company’s ability to stabilize investment and debt service over time.

Niche brand with consumables and manufacturing control

A recognized specialty brand plus ownership of consumables (inks, accessories) and manufacturing capability creates durable competitive advantages: customer loyalty, repeat-purchase revenue streams, and stronger margin control versus commodity producers, supporting steadier long-term revenue potential.

Negative Factors

Choppy and declining top-line

A declining and uneven revenue trend reduces operating leverage and raises uncertainty about demand for core products. Persistently shrinking sales make fixed-cost absorption harder, slow scale-driven margin gains, and lengthen the time required for the company to reach consistent profitability and self-sustaining growth.

Persistent negative free cash flow

Continued negative free cash flow despite an OCF inflection indicates the business still consumes cash after investment. Over the medium term this forces reliance on external financing or balance sheet draws, limits reinvestment capacity, and raises the risk that operational improvements won’t translate into durable, self-funded growth.

Rising leverage and shrinking equity base

An increasing debt-to-equity ratio with falling equity reduces financial flexibility and raises fixed obligations. In a turnaround that’s not yet complete, higher leverage amplifies risk from earnings volatility, limits capacity for opportunistic investment, and could pressure liquidity if margins or cash flows deteriorate.

Sailor Pen Co., Ltd. Business Overview & Revenue Model

Company Description

The Sailor Pen Co., Ltd. produces and sells writing instruments worldwide. The company offers fountain pens, ballpoint pens, mechanical pencils, puff pens, compound writing instruments, marking pens, fude pens, dip pen/inks, correction fluids, Dodoko sheets, other stationaries, and gift accessories, etc., as well as operates an online shop. It offers automatic take-out robots for plastic injection molded products; secondary and tertiary process automation equipment for plastic injection molded products, stock equipment, factory automation systems, and custom-made equipment; handling robots for semiconductors, metal presses, etc.; and prizes for the gaming industry. The company was founded in 1911 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Sailor Pen Co., Ltd. generates revenue primarily through the sale of its writing instruments, which includes a wide range of fountain pens, ballpoint pens, and accessories. The company employs a multi-channel distribution strategy, selling products through both retail partners and its own online platform. Key revenue streams include direct sales to consumers, wholesale to specialty shops and stationery stores, and limited edition releases that attract collectors. Additionally, Sailor has established partnerships with other brands for co-branded products, which contributes further to its earnings. Seasonal promotions and participation in stationery fairs also enhance visibility and sales, driving growth in both domestic and international markets.

Sailor Pen Co., Ltd. Financial Statement Overview

Summary

Profitability is improving (2025 net margin -5.2% vs. -24.5% in 2024) and gross margin strengthened (~32.6%), but revenue declined (2025 down 8.5% YoY) and operating profit remains negative. Cash flow is still a key weakness with negative free cash flow in 2025 (~-¥34m) despite slightly positive operating cash flow (~¥35m). Leverage is elevated and rising (debt ~1.84x equity) as equity trends down.

Income Statement

Revenue has been choppy and recently declined (2025 down 8.5% year over year), but profitability has improved materially versus the prior two years. Losses narrowed sharply in 2025 (net margin -5.2% vs. -24.5% in 2024 and -33.1% in 2023), and gross margin strengthened to ~32.6%. The key weakness remains that operating profit is still negative, indicating the turnaround is incomplete and earnings are not yet consistently sustainable.

Balance Sheet

Leverage has increased and is a notable risk: debt is about 1.84x equity in 2025 (up from ~1.53x in 2024), while equity has declined over time, consistent with continued losses. Total debt is relatively stable, but the higher debt-to-equity profile reduces financial flexibility. The balance sheet is not distressed on the data provided, but the direction of leverage and shrinking equity are clear negatives.

Cash Flow

Cash generation remains weak. Operating cash flow turned slightly positive in 2025 (~¥35m) after sizeable outflows in 2022–2024, which is a positive inflection, but free cash flow is still negative in every year shown (including 2025 at ~-¥34m). The company is therefore not yet consistently self-funding, and cash flow volatility remains a key concern.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.70B	4.30B	4.68B	4.56B	5.03B	5.39B
Gross Profit	1.52B	1.40B	1.35B	1.29B	1.60B	1.70B
EBITDA	8.13M	-163.03M	-947.09M	-1.31B	-39.09M	183.60M
Net Income	-1.03B	-221.72M	-1.15B	-1.51B	-193.93M	53.62M
Balance Sheet
Total Assets	4.44B	4.33B	4.76B	5.55B	7.22B	7.18B
Cash, Cash Equivalents and Short-Term Investments	601.44M	534.07M	579.83M	656.09M	1.18B	2.47B
Total Debt	1.98B	1.91B	1.93B	1.53B	1.22B	3.02B
Total Liabilities	3.32B	3.28B	3.50B	3.16B	3.30B	5.07B
Stockholders Equity	1.11B	1.04B	1.26B	2.39B	3.92B	2.11B
Cash Flow
Free Cash Flow	0.00	-34.01M	-480.80M	-866.29M	-1.46B	-405.82M
Operating Cash Flow	0.00	34.67M	-405.54M	-435.97M	-279.08M	166.79M
Investing Cash Flow	0.00	-75.10M	-68.75M	-385.50M	-1.18B	-586.50M
Financing Cash Flow	0.00	-12.63M	387.52M	291.07M	157.53M	-11.25M

Sailor Pen Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 109.00
• 50DMA: Negative
• 100DMA: Positive
• 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:7992, the sentiment is Negative. The current price of 109 is below the 20-day moving average (MA) of 113.50, below the 50-day MA of 113.50, and below the 200-day MA of 117.10, indicating a bearish trend. The MACD of -0.26 indicates Negative momentum. The RSI at 49.18 is Neutral, neither overbought nor oversold. The STOCH value of 53.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7992.

Sailor Pen Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7846	71 Outperform	¥191.55B	15.28	―	2.56%	-0.26%	3.35%
7976	71 Outperform	¥120.85B	19.93	―	2.09%	6.39%	-34.84%
7975	70 Neutral	¥4.52B	21.77	―	2.03%	3.24%	―
7984	67 Neutral	¥386.11B	18.54	8.83%	2.33%	6.29%	8.74%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7962	58 Neutral	¥23.41B	43.39	―	1.69%	-2.71%	―
7992	42 Neutral	¥3.38B	-15.24	―	―	4.11%	33.06%