Hikari Tsushin, Inc. (9435) AI Stock Analysis

• Market Cap: ¥1.90T
• Dividend Yield: 1.59%
• Average Volume (3M): 69.76K
• Price to Earnings (P/E): 15.2
• Beta (1Y): 0.92
• Revenue Growth: 14.45%
• EPS Growth: 29.21%
• Country: JP
• Employees: 4,149
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): N/A
• Shares Outstanding: 43,989,643
• 10 Day Avg. Volume: 74,800
• 30 Day Avg. Volume: 69,756
• PEG Ratio: -4.82
• Price to Book (P/B): 1.85
• Price to Sales (P/S): 2.47
• P/FCF Ratio: 26.80
• 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: 66 Neutral
• Price Target: ¥45,025.00 ▲(4.76% Upside)
• Action: Downgraded Date: 02/18/26
• Date: Action: Downgraded 02/18/26

The score is driven primarily by strong profitability and improved leverage, supported by a reasonable P/E and modest dividend yield. These positives are tempered by weak technical momentum (below key moving averages with negative MACD) and recent free-cash-flow contraction/volatility.

Positive Factors

High profitability and margins

Sustained high margins across gross, operating and net lines indicate strong pricing, cost control and product mix. These margins provide durable earnings cushion, support reinvestment and shareholder returns, and make the business resilient to modest revenue swings over months.

Improving leverage and larger equity base

A sub-1.0x debt/equity ratio and growing equity reduce default and refinancing risk relative to prior years. Improved balance-sheet flexibility supports capital allocation, dividend/security purchases and selective investment, strengthening the firm's structural financial position.

Recurring revenue via direct sales and partner network

A distribution-led model that generates recurring contract revenue from SMBs creates predictable cash flows and retention opportunities. The large direct and partner sales network enables cross-sell, steady commission income and lasting client relationships over quarters to years.

Negative Factors

Weakened free cash flow and cash conversion

FFO conversion below 100% and a near-15% recent FCF decline show earnings do not fully translate into cash. That raises sensitivity to working-capital swings, constrains organic reinvestment, and increases reliance on external funding for growth or payouts.

Revenue and profitability volatility

Uneven top-line trends and prior annual declines point to cyclicality in SMB sales and sensitivity to market conditions. This volatility hampers long-term revenue visibility, complicates capacity planning and can pressure margins if the company must discount or increase acquisition spend.

Sizable absolute debt increases funding sensitivity

Even with manageable leverage, notable absolute debt levels leave the company exposed to tighter credit or rising rates. That structural sensitivity can increase interest costs and limit strategic options (M&A, buybacks, capex) if financing conditions worsen over the medium term.

Hikari Tsushin, Inc. Business Overview & Revenue Model

Company Description

Hikari Tsushin, Inc. (9435) is a prominent telecommunications and information technology company based in Japan. The company operates primarily in the telecommunications sector, providing a wide range of services including mobile communications, broadband internet, and various IT solutions. Hikari Tsushin also offers cloud services, data center services, and consulting, catering to both individual consumers and businesses. With a focus on enhancing connectivity and digital transformation, the company leverages advanced technologies to deliver innovative solutions to its clients.

How the Company Makes Money

Hikari Tsushin generates revenue through multiple streams, primarily by offering telecommunications services, including mobile and fixed-line voice services, broadband internet, and data services. The company also earns significant income from its IT solutions and consulting services, which include cloud computing and data center operations. Additionally, Hikari Tsushin benefits from partnerships with various businesses, enhancing its service offerings and expanding its customer base. The combination of subscription fees from telecommunications services, project-based revenue from IT consulting, and recurring revenue from cloud services contributes to the overall profitability of the company.

Hikari Tsushin, Inc. Financial Statement Overview

Summary

Strong profitability and margins (TTM gross ~49.5%, operating ~25.0%, net ~19.3%) and improving, manageable leverage (~0.92x debt/equity) support a solid profile. The main offset is weaker and more volatile cash generation, with free cash flow down ~14.9% and only ~76% of net income in TTM.

Income Statement

TTM (Trailing-Twelve-Months) revenue is up ~7.6% versus the latest annual period, while profitability remains strong with roughly ~49.5% gross margin, ~25.0% operating margin, and ~19.3% net margin. Over the last several years, profits have generally expanded alongside solid margins, though growth has been somewhat uneven (including a revenue decline in FY2024), and the most recent period shows a modest pullback in gross margin versus prior annual levels.

Balance Sheet

Leverage looks manageable with debt at ~0.92x equity in TTM (Trailing-Twelve-Months), an improvement versus prior years that were closer to or above ~1.0x. Equity has grown meaningfully over time, supporting a larger asset base, and shareholder returns remain healthy (roughly mid-teens). The main watch item is that absolute debt is sizable, so results remain more sensitive to funding conditions than a low-leverage balance sheet.

Cash Flow

Cash generation is positive, with TTM (Trailing-Twelve-Months) free cash flow covering about ~76% of net income, indicating earnings convert reasonably well into cash. However, free cash flow has contracted meaningfully in the latest period (about -14.9% growth), and operating cash flow relative to reported profits is low in the provided data, pointing to potentially higher working-capital or timing swings that can pressure near-term cash consistency.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2021
Income Statement
Total Revenue	730.24B	686.55B	601.95B	643.98B	573.03B	559.43B
Gross Profit	362.15B	343.30B	315.17B	297.33B	300.01B	295.55B
EBITDA	158.07B	162.51B	172.55B	128.21B	121.37B	101.23B
Net Income	127.41B	117.52B	122.22B	91.34B	87.54B	54.61B
Balance Sheet
Total Assets	2.72T	2.37T	2.08T	1.69T	1.45T	1.26T
Cash, Cash Equivalents and Short-Term Investments	388.54B	470.27B	547.05B	409.57B	349.15B	329.08B
Total Debt	1.03T	934.32B	822.49B	721.77B	612.62B	514.13B
Total Liabilities	1.55T	1.43T	1.26T	1.09T	952.36B	827.81B
Stockholders Equity	1.13T	914.77B	790.48B	571.01B	467.39B	393.44B
Cash Flow
Free Cash Flow	49.95B	63.28B	111.92B	36.46B	33.04B	42.80B
Operating Cash Flow	65.91B	84.84B	130.20B	54.80B	51.03B	58.12B
Investing Cash Flow	-199.36B	-176.44B	-94.72B	-79.35B	-95.99B	-96.64B
Financing Cash Flow	94.13B	66.72B	55.32B	69.22B	50.09B	89.81B

Hikari Tsushin, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 42980.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9435, the sentiment is Positive. The current price of 42980 is above the 20-day moving average (MA) of 42894.50, below the 50-day MA of 43533.67, and above the 200-day MA of 41614.90, indicating a bullish trend. The MACD of -300.94 indicates Negative momentum. The RSI at 58.13 is Neutral, neither overbought nor oversold. The STOCH value of 66.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9435.

Hikari Tsushin, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8015	70 Outperform	¥7.41T	19.85	13.49%	2.10%	5.32%	9.73%
8053	69 Neutral	$8.06T	14.51	12.86%	2.48%	3.19%	72.26%
3167	68 Neutral	¥158.76B	14.27	―	3.17%	3.99%	20.63%
9418	67 Neutral	¥335.68B	18.28	―	0.82%	19.48%	19.77%
9435	66 Neutral	¥1.90T	15.23	―	1.59%	14.45%	29.21%
2768	65 Neutral	¥1.35T	12.91	11.17%	3.24%	2.12%	18.93%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Hikari Tsushin, Inc. Corporate Events

Hikari Tsushin Raises Q3 Dividend and Ups Full-Year Payout Forecast

Hikari Tsushin, Inc. has approved a third quarter-end dividend of 190 yen per share for the period with a record date of December 31, 2025, up from 167 yen a year earlier, bringing total payouts for this distribution to 8,342 million yen. The dividend will be sourced from retained earnings and become effective on March 13, 2026, reflecting the company’s confidence in its steady performance and ongoing cash-generation capacity.

The company also lifted its dividend forecast for the fiscal year ending March 2026, raising both the third quarter and year-end dividends by 5 yen from prior guidance to 190 yen per share each. As a result, the total annual dividend is now expected to reach 746 yen per share, up 10 yen from the previous forecast and significantly higher than the prior year’s 661 yen, underscoring management’s commitment to progressively returning profits to shareholders.

The most recent analyst rating on (JP:9435) stock is a Buy with a Yen47841.00 price target. To see the full list of analyst forecasts on Hikari Tsushin, Inc. stock, see the JP:9435 Stock Forecast page.

Hikari Tsushin Lifts Full-Year Profit Forecast on FX Gains

Hikari Tsushin has revised its full-year consolidated earnings forecast for the fiscal year ending March 2026, maintaining expected revenue at ¥760 billion and operating profit at ¥115 billion while raising profit attributable to owners of the parent from ¥115 billion to ¥120 billion. The upgrade reflects higher-than-anticipated foreign exchange gains driven by a weaker yen, lifting projected basic earnings per share to ¥2,733.04 and signaling a modest improvement in profitability compared with the prior forecast and the previous fiscal year.

This revision underscores the company’s sensitivity to currency movements and highlights FX gains as a supportive factor for earnings in the current fiscal year. While operational assumptions remain unchanged, the enhanced profit outlook may positively influence investor sentiment by demonstrating resilience in bottom-line performance despite stable top-line expectations.

The most recent analyst rating on (JP:9435) stock is a Buy with a Yen47841.00 price target. To see the full list of analyst forecasts on Hikari Tsushin, Inc. stock, see the JP:9435 Stock Forecast page.

Hikari Tsushin Raises Full-Year Net Profit Forecast for FY26/3

Hikari Tsushin, Inc. reported updated guidance for the fiscal year ending March 2026, keeping its revenue and operating profit forecasts unchanged at 760.0 billion yen and 115.0 billion yen, respectively, implying year-on-year growth of about 10% and 9%. The company raised its full-year net profit forecast attributable to owners of the parent from 115.0 billion yen to 120.0 billion yen, a 5 billion yen upward revision that translates to 2% growth year-on-year, reflecting stronger profitability expectations despite an updated foreign exchange assumption of 150 yen to the U.S. dollar.

The most recent analyst rating on (JP:9435) stock is a Buy with a Yen47841.00 price target. To see the full list of analyst forecasts on Hikari Tsushin, Inc. stock, see the JP:9435 Stock Forecast page.

Hikari Tsushin Lifts FY2026 Outlook as Profits and Equity Base Grow

Hikari Tsushin reported consolidated revenue of ¥542.5 billion for the nine months ended December 31, 2025, up 8.8% year on year, with operating profit rising 2.2% to ¥88.5 billion and profit attributable to owners of the parent climbing 9.6% to ¥112.7 billion. Total assets expanded to ¥2.72 trillion and the equity ratio improved to 41.7%, signaling a strengthened balance sheet and solid profitability despite a moderation in operating profit growth.

The company raised its full-year earnings and dividend forecasts, now projecting revenue of ¥760 billion and profit attributable to owners of the parent of ¥120 billion for the year ending March 31, 2026, alongside a planned total annual dividend of ¥746 per share. The higher payout and continued profit growth underline management’s confidence in cash generation and capital efficiency, supported by share buybacks that reduced the average number of shares outstanding and potentially enhance shareholder returns.

The most recent analyst rating on (JP:9435) stock is a Buy with a Yen47841.00 price target. To see the full list of analyst forecasts on Hikari Tsushin, Inc. stock, see the JP:9435 Stock Forecast page.

Hikari Tsushin Reports Progress on Ongoing Share Buyback Programme

Hikari Tsushin, Inc. has disclosed the latest progress in its share buyback program authorized by its board on November 11, 2025, under the provisions of Japan’s Companies Act, acquiring 32,300 common shares for approximately ¥1.43 billion via market purchases on the Tokyo Stock Exchange between January 1 and January 31, 2026. Cumulatively, the company has repurchased 82,800 shares for about ¥3.58 billion under this authorization, which permits buybacks of up to 350,000 shares or ¥10 billion by June 30, 2026, signaling an ongoing capital allocation policy that could support shareholder returns and potentially bolster earnings per share by reducing the number of shares outstanding.

The most recent analyst rating on (JP:9435) stock is a Buy with a Yen47841.00 price target. To see the full list of analyst forecasts on Hikari Tsushin, Inc. stock, see the JP:9435 Stock Forecast page.

Hikari Tsushin Reports Progress on ¥10 Billion Share Buyback Program

Hikari Tsushin, Inc. has reported the progress of its ongoing share buyback program authorized by the board on November 11, 2025, under provisions of the Companies Act of Japan. Between December 1 and December 31, 2025, the company repurchased 30,400 of its common shares on the Tokyo Stock Exchange for a total of ¥1,292,312,000, bringing cumulative buybacks under this mandate to 50,500 shares at a cost of ¥2,159,446,000. The current authorization allows purchases of up to 350,000 shares, or 0.79% of issued shares excluding treasury stock, for a maximum of ¥10 billion through June 30, 2026, indicating an ongoing capital allocation strategy that may support shareholder returns and share price stability.

The most recent analyst rating on (JP:9435) stock is a Buy with a Yen48789.00 price target. To see the full list of analyst forecasts on Hikari Tsushin, Inc. stock, see the JP:9435 Stock Forecast page.

Hikari Tsushin Subsidiary Sues Over Disallowed Tax Losses After Audit Ruling

Hikari Tsushin, Inc. has disclosed that a consolidated subsidiary has filed a tax lawsuit with the Tokyo District Court after Japan’s tax authorities disallowed part of Intea Holdings, Inc.’s tax loss carryforwards related to past corporate reorganization transactions, leading to the payment of approximately JPY 2.1 billion in additional taxes. Following the dismissal of its appeal by the National Tax Tribunal, the group is now seeking judicial revocation of the tax correction, maintaining that its reorganizations and tax treatments were lawful and properly advised, while also rejecting media allegations of abusing the consolidated taxation system and emphasizing its continued commitment to legal compliance and appropriate tax payment.

The most recent analyst rating on (JP:9435) stock is a Buy with a Yen48789.00 price target. To see the full list of analyst forecasts on Hikari Tsushin, Inc. stock, see the JP:9435 Stock Forecast page.

Hikari Tsushin Announces Share Buyback Strategy

Hikari Tsushin, Inc. announced the acquisition of 20,100 shares of its own common stock, amounting to 867,134,000 yen, as part of a resolution made by its Board of Directors. This strategic move, conducted through open market trading on the Tokyo Stock Exchange, is part of a larger plan to acquire up to 350,000 shares by June 2026, potentially impacting the company’s market positioning and shareholder value.

The most recent analyst rating on (JP:9435) stock is a Hold with a Yen43867.00 price target. To see the full list of analyst forecasts on Hikari Tsushin, Inc. stock, see the JP:9435 Stock Forecast page.