Valqua Ltd. (7995) AI Stock Analysis

• Market Cap: ¥94.96B
• Dividend Yield: 3.77%
• Average Volume (3M): 39.90K
• Price to Earnings (P/E): 17.3
• Beta (1Y): 0.95
• Revenue Growth: -5.87%
• EPS Growth: 24.10%
• Country: JP
• Employees: 1,670
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 59.47
• Shares Outstanding: 18,688,732
• 10 Day Avg. Volume: 35,670
• 30 Day Avg. Volume: 39,903
• PEG Ratio: -2.39
• Price to Book (P/B): 1.08
• Price to Sales (P/S): 0.91
• P/FCF Ratio: -35.04
• 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): 283
• Revenue Forecast (FY): ¥57.83B

• Rating: 67 Neutral
• Price Target: ¥5,413.00 ▲(48.91% Upside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is driven primarily by mixed financial performance: solid margins and a strong equity base are offset by declining revenue, weakening EBIT/ROE, and negative free cash flow. Technicals support an uptrend but overbought signals raise near-term risk, while valuation and dividend yield are relatively supportive.

Positive Factors

High gross margins

Valqua's 39.66% gross margin indicates durable product-level pricing power from engineered sealing solutions. High gross margins provide a structural buffer against raw-material and input cost volatility, support reinvestment in product development, and sustain profitability through cycles.

Strong equity base

A 64.88% equity ratio reflects conservative capitalization and balance-sheet resilience. This financial strength supports capital allocation flexibility, tolerates cyclical downturns, and lowers refinancing risk, enabling steady investment in R&D, service capability and customer support over the medium term.

Recurring aftermarket demand

Valqua's revenue mix is anchored in recurring maintenance replacement and capital project demand across chemicals, energy and heavy industry. This structural customer need for leakage prevention and reliability creates predictable baseline volumes and long-term customer relationships, supporting revenue durability.

Negative Factors

Declining revenue trend

A falling top line and -5.08% revenue growth signal weakening end-market demand or lost share. Sustained revenue contraction reduces operating leverage, pressures margins and limits ability to invest in innovation or expand service footprint, risking longer-term competitiveness if not reversed.

Negative free cash flow

Persistent negative free cash flow despite healthy operating cash conversion indicates capital spending or working capital drains. Over time this can constrain reinvestment, force external financing or cutbacks to dividends, reducing strategic flexibility and slowing structural growth initiatives.

Margin and ROE pressure

A declining EBIT margin and lower ROE point to eroding operating efficiency or pricing pressure. Persisting margin compression harms the firm’s ability to generate attractive shareholder returns, weakens cash generation per unit revenue, and may necessitate cost restructuring for durable recovery.

Valqua Ltd. Business Overview & Revenue Model

Company Description

Valqua Ltd. (7995) is a leading manufacturer and supplier of sealing solutions, gaskets, and other fluid control products, primarily catering to the industrial, automotive, and energy sectors. The company focuses on providing high-quality, durable products that meet stringent industry standards, thereby ensuring safety and operational efficiency for its clients. Valqua's core product offerings include various types of seals, packing materials, and fluid control systems designed to withstand extreme conditions.

How the Company Makes Money

Valqua Ltd. generates revenue primarily through the sale of its sealing products and fluid control solutions to various industries, including manufacturing, automotive, and energy. The company utilizes a direct sales model, supplemented by a network of distributors, to reach its customer base. Key revenue streams include custom sealing solutions tailored to specific client needs, standard product sales, and long-term supply agreements with major industrial players. Additionally, Valqua benefits from strategic partnerships with other manufacturing firms, enhancing its product offerings and market reach, which further contributes to its earnings.

Valqua Ltd. Financial Statement Overview

Summary

Profitability remains solid (gross margin 39.66%; net margin 7.78%), but revenue declined from 2024 to 2025 and EBIT margin fell to 9.43%. Balance sheet strength (equity ratio 64.88%) is tempered by rising leverage (debt-to-equity 0.29) and lower ROE (9.26%). Cash flow is the key drag with negative free cash flow in 2025 despite healthy operating cash flow conversion (OCF/net income 1.04).

Income Statement

Valqua Ltd. demonstrated strong gross profit margins over the years, with a recent figure of 39.66% for 2025. However, a declining revenue trend from 2024 to 2025, and a decrease in EBIT margin to 9.43% in 2025, indicate challenges in maintaining operational efficiency. The net profit margin slightly decreased to 7.78% in 2025, reflecting pressure on profitability.

Balance Sheet

The company's balance sheet shows a stable equity base with an equity ratio of 64.88% in 2025, indicating financial stability. However, the increase in debt levels, leading to a debt-to-equity ratio of 0.29 in 2025, suggests rising leverage. The return on equity declined to 9.26% in 2025, which could impact shareholder returns.

Cash Flow

Valqua Ltd.'s cash flow statements reveal challenges with free cash flow, which remained negative in 2025. Despite a strong operating cash flow to net income ratio of 1.04, the inability to convert earnings into positive free cash flow indicates potential liquidity and investment constraints.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	58.83B	60.11B	61.74B	62.18B	53.17B	44.72B
Gross Profit	23.81B	23.84B	25.31B	25.74B	21.50B	17.52B
EBITDA	8.95B	9.23B	9.90B	11.55B	9.68B	7.04B
Net Income	4.64B	4.68B	4.91B	6.75B	4.84B	3.09B
Balance Sheet
Total Assets	77.02B	77.82B	74.49B	68.51B	60.20B	52.69B
Cash, Cash Equivalents and Short-Term Investments	7.26B	7.97B	6.39B	8.19B	8.14B	8.10B
Total Debt	13.54B	14.51B	11.01B	6.72B	5.67B	4.68B
Total Liabilities	27.39B	27.30B	25.76B	22.83B	19.22B	15.42B
Stockholders Equity	49.59B	50.49B	48.22B	45.19B	39.73B	35.65B
Cash Flow
Free Cash Flow	0.00	-1.56B	-3.06B	1.72B	2.08B	907.00M
Operating Cash Flow	0.00	4.87B	1.76B	4.40B	5.23B	4.59B
Investing Cash Flow	0.00	-4.89B	-4.75B	-1.33B	-3.69B	-2.32B
Financing Cash Flow	0.00	1.57B	923.00M	-3.40B	-1.81B	-803.00M

Valqua Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3635.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7995, the sentiment is Positive. The current price of 3635 is below the 20-day moving average (MA) of 4754.75, below the 50-day MA of 4430.90, and below the 200-day MA of 3724.08, indicating a bullish trend. The MACD of 233.85 indicates Negative momentum. The RSI at 82.89 is Negative, neither overbought nor oversold. The STOCH value of 86.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7995.

Valqua Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6490	76 Outperform	¥200.97B	22.58	―	2.50%	-2.46%	-10.72%
6363	70 Outperform	¥69.83B	14.83	―	3.09%	6.35%	-34.20%
6486	70 Outperform	¥168.25B	20.47	―	3.88%	1.70%	18.50%
6496	69 Neutral	¥26.93B	16.86	―	1.82%	34.70%	-8.44%
7995	67 Neutral	¥94.96B	17.28	―	3.77%	-5.87%	24.10%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
6469	62 Neutral	¥45.85B	51.68	―	0.45%	13.61%	94.37%

Valqua Ltd. Corporate Events

Valqua Trims Sales Outlook but Reaffirms Profit Targets for FY2026

Valqua cut its fiscal 2026 net sales outlook by 6.5% to ¥58 billion after softer-than-planned demand in its High Performance Plastics Products Business, though it kept operating, ordinary, and net income forecasts unchanged, indicating cost discipline and margin resilience. Management anticipates the plastics unit’s full recovery will slip to the following fiscal year while monitoring macro risks such as supply-chain disruptions, energy costs, and geopolitics, signaling cautious near-term revenue expectations despite stable profitability targets.

The most recent analyst rating on (JP:7995) stock is a Hold with a Yen4623.00 price target. To see the full list of analyst forecasts on Valqua Ltd. stock, see the JP:7995 Stock Forecast page.

Valqua lifts profits despite lower sales and reaffirms FY2025 outlook

For the nine months to 31 December 2025, Valqua’s net sales slipped 6% to ¥42.3 billion as weaker demand offset gains from a newly consolidated subsidiary, yet operating profit jumped 15.7% to ¥4.89 billion and net income climbed 28.3% to ¥3.60 billion thanks to better margins and lower SG&A, lifting EPS to ¥204.40. Management narrowed full-year guidance to ¥58 billion in revenue and ¥7 billion in operating profit while keeping a ¥150 dividend forecast, signaling confidence in cost controls, portfolio pruning, and the balance sheet’s 61.7% equity ratio despite soft top-line momentum.

The most recent analyst rating on (JP:7995) stock is a Hold with a Yen4623.00 price target. To see the full list of analyst forecasts on Valqua Ltd. stock, see the JP:7995 Stock Forecast page.