Nikken Kogaku Co., Ltd. (9767) AI Stock Analysis

• Market Cap: ¥3.09B
• Dividend Yield: 2.13%
• Average Volume (3M): 1.72K
• Price to Earnings (P/E): 9.9
• Beta (1Y): 0.18
• Revenue Growth: 4.48%
• EPS Growth: 5.88%
• Country: JP
• Employees: 147
• Sector: Industrials
• Sector Strength: 72
• Industry: Construction Materials
• EPS (TTM): 95.33
• Shares Outstanding: 1,862,254
• 10 Day Avg. Volume: 1,640
• 30 Day Avg. Volume: 1,723
• PEG Ratio: -57.42
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.45
• P/FCF Ratio: 69.70
• 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: 70 Outperform
• Price Target: ¥1,867.00 ▲(28.05% Upside)
• Action: Upgraded Date: 01/20/26
• Date: Action: Upgraded 01/20/26

Overall score is driven primarily by solid financial stability from a very strong balance sheet, partially offset by declining revenue and sharply weaker free cash flow. Technically, the stock is in an uptrend but appears overextended (very high RSI), while a moderate P/E and modest dividend yield provide valuation support.

Positive Factors

Balance sheet strength / very low leverage

Extremely low financial leverage and a high equity ratio provide durable financial flexibility. This conservatism supports investment in R&D, absorbs cyclical downturns, allows opportunistic capex or M&A, and reduces refinancing risk over the next several months to years.

Margin resilience via cost management

Maintaining ~30% gross margin while improving operating margins shows structural cost discipline. Sustained margin recovery from efficiency gains supports profitability even if top-line growth remains muted, helping preserve cash flow and funding for strategic initiatives.

Diversified end-markets and R&D focus

Exposure to healthcare, electronics and scientific markets plus R&D orientation creates multiple durable revenue streams. Medical device and electronics demand tends to be structural, and partnerships broaden market access, reducing dependency on any single cyclical sector.

Negative Factors

Declining revenue trend

Consecutive year revenue decline signals weakening market traction or lost volumes. Persistent top-line contraction pressures operating leverage, can erode pricing power, and makes sustaining investment and growth initiatives harder absent clear demand recovery or new product wins.

Sharp deterioration in free cash flow

A collapse in FCF markedly reduces internal funding for capex, R&D, and dividends. Lower cash conversion increases reliance on liquidity buffers, restricts strategic optionality, and heightens vulnerability to shocks if slower sales persist over the medium term.

Modest scale / limited organizational resources

Small employee base and modest operational scale limit capacity to pursue large global contracts, accelerate new product rollouts, or absorb market share loss. This constrains long-term competitiveness versus larger optical suppliers in capital intensity and sales reach.

Nikken Kogaku Co., Ltd. Business Overview & Revenue Model

Company Description

Nikken Kogaku Co., Ltd. manufactures and sells wave-absorbing blocks in Japan. The company offers wave dissipating and coastal revetment blocks. It also provides coastal protection blocks, and riverbank disaster-prevention and environment protection blocks. In addition, the company offers natural stones and geosynthetics products. It serves infrastructure, transport, tourism, civil engineering, as well as government and construction consultants. Nikken Kogaku Co., Ltd. was incorporated in 1950 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nikken Kogaku generates revenue primarily through the sale of its optical products and systems. The company has several key revenue streams, including sales from precision optics for medical devices, such as endoscopes, and other imaging systems used in healthcare. Additionally, they provide optical components for the electronics sector, including lenses for cameras and smartphones. Significant partnerships with healthcare providers and electronics manufacturers enhance their market reach, allowing for steady demand for their products. The company also invests in research and development to innovate and improve existing products, further contributing to its revenue growth.

Nikken Kogaku Co., Ltd. Financial Statement Overview

Summary

Financials are mixed: a strong, low-leverage balance sheet (Debt-to-Equity 0.07; Equity Ratio 70.3%) supports stability, but revenue declined (5.52B JPY in 2025 vs 6.19B JPY in 2024) and cash generation weakened sharply (FCF down from 527M JPY to 36M JPY), raising near-term performance risk despite some margin improvement from cost control.

Income Statement

Nikken Kogaku experienced a decline in revenue over recent years, with a Total Revenue of 5.52 billion JPY in 2025 compared to 6.19 billion JPY in 2024. Despite this, the company maintained a stable Gross Profit Margin of around 30% and improved its EBIT and EBITDA margins in 2025 due to cost management. However, the net profit margin slightly decreased, indicating challenges in maintaining profitability amidst declining sales.

Balance Sheet

The company's balance sheet is robust, with a strong equity position and a low Debt-to-Equity Ratio of 0.07, reflecting low financial leverage. The Equity Ratio stands at 70.3%, highlighting substantial equity financing. Return on Equity (ROE) was stable, despite slight fluctuations in net income, indicating effective equity utilization.

Cash Flow

Nikken Kogaku's cash flow from operations decreased significantly from 2024 to 2025, impacting the Free Cash Flow, which fell from 527 million JPY to 36 million JPY. The Operating Cash Flow to Net Income ratio dropped, suggesting less efficient conversion of profits to cash. The Free Cash Flow to Net Income ratio also decreased, indicating potential constraints in generating free cash flow.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	5.78B	5.52B	6.19B	6.25B	8.32B	10.59B
Gross Profit	1.72B	1.70B	1.69B	1.66B	2.16B	2.62B
EBITDA	569.81M	548.67M	592.52M	649.73M	1.12B	1.58B
Net Income	297.51M	283.50M	284.65M	280.64M	662.09M	1.01B
Balance Sheet
Total Assets	6.22B	6.53B	7.20B	6.93B	7.30B	7.67B
Cash, Cash Equivalents and Short-Term Investments	2.54B	2.74B	2.93B	2.88B	2.72B	2.52B
Total Debt	308.87M	323.68M	513.46M	809.06M	733.77M	909.00M
Total Liabilities	1.68B	1.93B	2.80B	2.85B	3.48B	4.43B
Stockholders Equity	4.53B	4.59B	4.40B	4.08B	3.82B	3.23B
Cash Flow
Free Cash Flow	0.00	35.98M	527.45M	422.62M	685.48M	1.82B
Operating Cash Flow	0.00	94.80M	658.51M	632.64M	795.02M	2.10B
Investing Cash Flow	0.00	-24.54M	-322.63M	-401.11M	-333.14M	-131.36M
Financing Cash Flow	0.00	-269.70M	-286.87M	-77.86M	-263.50M	-771.48M

Nikken Kogaku Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1458.00
• 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:9767, the sentiment is Positive. The current price of 1458 is below the 20-day moving average (MA) of 1619.40, below the 50-day MA of 1556.66, and below the 200-day MA of 1486.35, indicating a bullish trend. The MACD of 15.55 indicates Positive momentum. The RSI at 66.87 is Neutral, neither overbought nor oversold. The STOCH value of 60.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9767.

Nikken Kogaku Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9767	70 Outperform	¥3.09B	9.87	―	2.13%	4.48%	5.88%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7896	60 Neutral	¥2.45B	-87.52	―	3.86%	2.13%	156.83%
5386	58 Neutral	¥2.99B	18.61	―	1.59%	-4.01%	-41.29%
5271	54 Neutral	¥3.11B	28.88	―	3.85%	0.29%	-45.50%
5928	51 Neutral	¥3.38B	17.20	―	2.96%	-8.43%	135.83%
6173	41 Neutral	¥1.46B	-1.45	―	―	-41.75%	-116.16%