Secom Co (9735) AI Stock Analysis

• Market Cap: ¥2.64T
• Dividend Yield: 1.77%
• Average Volume (3M): 1.24M
• Price to Earnings (P/E): 22.8
• Beta (1Y): 0.38
• Revenue Growth: 5.39%
• EPS Growth: 4.89%
• Country: JP
• Employees: 64,744
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 72.41
• Shares Outstanding: 466,599,800
• 10 Day Avg. Volume: 1,270,470
• 30 Day Avg. Volume: 1,239,516
• PEG Ratio: 2.49
• Price to Book (P/B): 1.67
• Price to Sales (P/S): 1.76
• P/FCF Ratio: 22.22
• 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): 265.73
• Revenue Forecast (FY): ¥1.26T

• Rating: 73 Outperform
• Price Target: ¥6,713.00 ▲(18.58% Upside)
• Action: Upgraded Date: 10/09/25
• Date: Action: Upgraded 10/09/25

Secom Co's strong financial performance is the primary driver of its stock score, supported by consistent revenue growth and solid cash flow management. The technical analysis presents a cautious outlook due to bearish momentum indicators, while the valuation suggests the stock is fairly priced. The absence of earnings call data and corporate events does not impact the score.

Positive Factors

Strong cash generation

Secom’s rising operating cash flow and a 33% jump in free cash flow show durable cash conversion from recurring services. High OCF-to-net income (1.60) and FCF-to-net income (0.88) support reinvestment, maintenance of service networks, and funding of organic growth without heavy external financing.

Conservative balance sheet

A very low debt-to-equity ratio and a high equity ratio provide structural financial resilience for Secom’s labor- and capital-intensive security operations. Low leverage preserves flexibility for capex, selective M&A, and withstands demand shocks while delivering improving ROE, supporting long-term stability.

Stable margins and recurring revenue

Robust gross and EBIT margins alongside steady revenue expansion reflect durable economics from recurring monitoring, contracts, and cross-sell services. High-margin monitoring and maintenance services create predictable revenue streams and support sustained profitability even with modest top-line growth.

Negative Factors

Modest revenue growth

Secom’s mid-single-digit revenue growth indicates a mature market position with limited organic expansion. In a capital-light services model, slower top-line growth constrains operating leverage and the pace at which the company can scale fixed-cost efficiencies and expand margins without acquisitions or new service lines.

Cost pressures affecting gross profit

The reported dip in gross profit versus the prior year suggests rising input or labor costs in a labor-heavy business. Persistent cost inflation in staffing or equipment leasing could erode gross margins and force price increases that may weaken competitiveness or retention in long-term contracts.

Slightly rising liabilities to monitor

Although leverage remains low, an uptick in liabilities could reflect growing operational obligations (e.g., deferred revenues, pension or lease liabilities). If liabilities continue rising, they may pressure working capital, reduce surplus cash for reinvestment, and limit strategic flexibility over the medium term.

Secom Co Business Overview & Revenue Model

Company Description

SECOM Co., Ltd. provides security services in Japan and internationally. The company's Security Services segment provides online security systems, static guard services, and armored car services. Its Fire Protection Services segment provides automatic fire alarm systems, fire extinguishing systems, other fire protection systems, and related maintenance services to office buildings, plants, tunnels, cultural properties, ships, and residences. The company's Medical Services segment offers home nursing, pharmaceutical dispensing, and other personal care services; support for affiliated medical institutions; operates the general hospital, pharmacies, and residences for seniors; provides electronic medical report systems; health and preventative care services; and sells medical equipment and pharmaceuticals. Its Insurance Services Segment provides fire insurance, automobile insurance, and cancer treatment insurance services. The company's Geospatial Information Services segment provides geospatial information services to public-sector entities, including national and local governments; private sector customers; and overseas government agencies. Its BPO and ICT Services segment offers data center services, disaster preparedness services, BCP and telework support services, information security services, cloud-based services, and business process outsourcing services. The Real Estate and Other Services segment provides real estate leasing, construction, installation, and home services. It also offers building management, real estate management, electrical engineering, general office, credit, clerical, and software development services; sells security and water-treatment equipment; operates PFI correctional facilities, and restaurants and shops at medical facilities; and provides lifestyle support and car maintenance services, as well as manufactures, sells, and maintains freight elevators. The company was incorporated in 1962 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Secom Co generates revenue primarily through the sale and installation of security systems, along with ongoing monitoring and maintenance services. The company has a recurring revenue model, as clients pay for continuous monitoring services, which provides a stable income stream. Key revenue streams include the installation of security systems in businesses and homes, monthly monitoring fees, and cash management solutions for financial institutions. Additionally, Secom collaborates with various partners, including technology providers, to enhance its service offerings and expand its market reach, which further contributes to its earnings.

Secom Co Financial Statement Overview

Summary

Secom Co exhibits strong financial health with consistent revenue growth, robust profitability margins, and solid cash flow management. The company maintains a low debt profile and a strong equity base, contributing to its stability. While cost pressures may slightly affect gross margins, the overall financial trajectory remains positive.

Income Statement

Secom Co has demonstrated consistent revenue growth with a 3.92% increase from 2024 to 2025 and a 4.85% increase from 2023 to 2024. The gross profit margin remains robust at approximately 29.33% for 2025. The company's EBIT margin of 12.02% and EBITDA margin of 21.13% for 2025 indicate strong operating efficiency. Net profit margin improved to 9.01% in 2025, showcasing enhanced profitability, although slightly lower gross profit compared to 2024 suggests potential cost pressures.

Balance Sheet

Secom Co maintains a strong equity position with an equity ratio of 59.23% in 2025, indicating financial stability. The debt-to-equity ratio is low at 0.06, suggesting conservative leverage. Return on equity improved to 8.51% in 2025, highlighting stronger profitability. The company’s low leverage and robust equity support its long-term stability, though the slightly increasing liabilities deserve monitoring.

Cash Flow

Operating cash flow increased by 4.21% in 2025, reflecting improved cash-generating efficiency. Free cash flow grew by 33.45% from the previous year, underscoring strong cash flow management. The operating cash flow to net income ratio of 1.60 and free cash flow to net income ratio of 0.88 indicate healthy cash flow relative to net earnings, supporting liquidity and potential for reinvestment.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	1.22T	1.20T	1.15T	1.10T	1.05T	1.04T
Gross Profit	377.08B	351.97B	357.28B	342.46B	337.67B	330.57B
EBITDA	246.17B	253.42B	236.61B	223.18B	220.31B	201.68B
Net Income	108.40B	108.11B	101.95B	96.08B	94.27B	74.68B
Balance Sheet
Total Assets	2.09T	2.15T	2.08T	1.99T	1.91T	1.86T
Cash, Cash Equivalents and Short-Term Investments	448.23B	584.63B	599.15B	684.18B	685.86B	659.72B
Total Debt	64.94B	77.57B	68.96B	64.28B	67.63B	66.17B
Total Liabilities	669.55B	697.84B	690.09B	673.02B	651.72B	634.36B
Stockholders Equity	1.25T	1.27T	1.22T	1.16T	1.12T	1.08T
Cash Flow
Free Cash Flow	0.00	95.20B	71.34B	85.09B	101.24B	123.82B
Operating Cash Flow	0.00	172.74B	165.76B	146.43B	164.91B	181.93B
Investing Cash Flow	0.00	-100.77B	-162.27B	-70.45B	-55.35B	-48.54B
Financing Cash Flow	0.00	-85.28B	-95.49B	-77.84B	-87.39B	-49.31B

Secom Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5661.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9735, the sentiment is Positive. The current price of 5661 is below the 20-day moving average (MA) of 5961.05, below the 50-day MA of 5799.94, and above the 200-day MA of 5473.15, indicating a bullish trend. The MACD of 56.41 indicates Positive momentum. The RSI at 57.63 is Neutral, neither overbought nor oversold. The STOCH value of 49.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9735.

Secom Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9740	80 Outperform	¥43.74B	13.86	―	1.95%	9.05%	14.38%
6744	76 Outperform	¥261.42B	22.05	―	2.42%	9.55%	9.52%
9735	73 Outperform	¥2.64T	22.80	8.35%	1.77%	5.39%	4.89%
7734	73 Outperform	¥161.23B	18.68	―	1.39%	11.23%	16.49%
2331	64 Neutral	¥606.43B	17.19	―	2.14%	7.73%	30.92%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7058	62 Neutral	¥4.38B	16.96	―	3.03%	6.87%	-1.10%

Secom Co Corporate Events

Secom posts higher sales and profit but keeps full-year outlook unchanged

Secom reported consolidated net sales of ¥909.8 billion for the nine months to 31 December 2025, up 5.2% year on year, with operating profit rising 10.4% to ¥110.7 billion, while ordinary profit and profit attributable to owners of parent each slipped 1.2%. Basic earnings per share edged up to ¥191.80 following a 2-for-1 stock split implemented in October 2024, as total assets remained broadly stable at ¥2.15 trillion and the equity ratio dipped slightly to 58.6%.

The company kept its full-year forecast unchanged, projecting net sales of ¥1.251 trillion and a 4.0% rise in operating profit, even as it expects ordinary profit and net profit to fall modestly, implying some margin pressure ahead. Secom plans total dividends of ¥100 per share for the fiscal year ending March 2026, signaling continued shareholder returns despite softer profit forecasts and an increase in treasury shares, which together may support per-share metrics and capital efficiency.

The most recent analyst rating on (JP:9735) stock is a Hold with a Yen6665.00 price target. To see the full list of analyst forecasts on Secom Co stock, see the JP:9735 Stock Forecast page.