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Komatsu Ltd. (KMTUY)
OTHER OTC:KMTUY
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Komatsu
(OTC:KMTUY)
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Rating:68Neutral
Price Target:
$49.00
â–²(48.44% Upside)
Action:DowngradedDate:02/14/26
The score is primarily supported by solid financial performance—strong profitability and a generally stable balance sheet—tempered by weaker cash-flow conversion. Technicals add some caution due to extremely overbought momentum signals despite an uptrend, while valuation is reasonable with a moderate dividend yield.
Positive Factors
Profitability & Scale
Komatsu's large revenue base and materially above-average margins indicate durable operating scale and improved operating leverage. Sustained mid-teens operating margins and near-10% net margins support reinvestment, R&D and aftermarket expansion, helping resilience across cycles and funding strategic initiatives.
Stable balance sheet & returns
Moderate leverage coupled with equity growth and roughly 13% ROE reflects financial stability and disciplined capital allocation. This balance provides flexibility to fund capex, sustain dividends and absorb cyclical shocks without excessive refinancing risk, supporting medium-term strategic execution.
Positive cash generation
Meaningful positive operating cash flow and improving free cash flow demonstrate the business can internally fund investments and shareholder returns. Even with mixed conversion, persistent FCF provides a structural cushion for capex, technology investments and aftermarket service expansion.
Negative Factors
Weak cash conversion
Free cash flow materially below accounting earnings and low operating cash coverage suggest working-capital swings or heavy reinvestment needs. Over time this can constrain discretionary spending, increase financing dependence in downturns and make meeting payout targets harder if revenues soften.
Leverage trend risk
A rising leverage trajectory reduces balance-sheet flexibility and raises refinancing and interest-rate exposure. If cyclical demand weakens, higher leverage amplifies earnings sensitivity and can force more conservative capital allocation, limiting strategic M&A or R&D investment when needed most.
Cyclical end-market exposure
Heavy dependence on construction and mining capex creates structural revenue cyclicality tied to commodity cycles and infrastructure spending. This can produce multi-quarter swings in orders, press margins and complicate capacity planning, requiring conservative buffers and strong aftermarket service businesses.
Komatsu (KMTUY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$40.79B
Dividend Yield4.03%
Average Volume (3M)4.95K
Price to Earnings (P/E)11.7
Beta (1Y)0.78
Revenue Growth0.99%
EPS Growth9.08%
CountryUS
Employees65,738
SectorIndustrials
Sector Strength72
IndustryAgricultural - Machinery
Share Statistics
EPS (TTM)0.67
Shares Outstanding930,340,640
10 Day Avg. Volume0
30 Day Avg. Volume4,950
Financial Highlights & Ratios
PEG Ratio0.67
Price to Book (P/B)1.27
Price to Sales (P/S)0.99
P/FCF Ratio12.99
Enterprise Value/Market Cap171.73
Enterprise Value/Revenue1.71
Enterprise Value/Gross Profit11.17
Enterprise Value/Ebitda8.89
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)2.6
Revenue Forecast (FY)$26.05B
Komatsu Business Overview & Revenue Model
Company DescriptionKomatsu Ltd. (KMTUY) is a multinational corporation based in Japan, specializing in the manufacturing of construction, mining, and utility equipment. The company operates in several sectors, including construction machinery, mining equipment, and industrial machinery, providing a wide range of products such as excavators, bulldozers, and dump trucks. Komatsu is also involved in the development of advanced technology solutions, including autonomous and electric vehicles, enhancing operational efficiency in various industries.
How the Company Makes MoneyKomatsu generates revenue primarily through the sale of heavy machinery and equipment to the construction and mining sectors. Key revenue streams include the sale of new equipment, aftermarket parts and services, and rental services. The company also benefits from long-term contracts for large-scale projects, providing a steady income. Additionally, Komatsu has established partnerships with various companies and governmental agencies, allowing it to secure significant contracts and enhance its market presence. The company's investments in technological advancements, such as automation and sustainability initiatives, also contribute to its financial growth by meeting the evolving needs of customers.
Komatsu Earnings Call Summary
Earnings Call Date:Jan 30, 2026
(Q3-2025)
| % Change Since: |
Next Earnings Date:Apr 24, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with record high net sales and income, growth in Retail Finance and Industrial Machinery & Others, and new product introductions. However, challenges included profit declines in the Construction, Mining & Utility Equipment segment, decreased demand in key markets, and higher production costs.Q3-2025 Updates
Positive Updates
Record High Net Sales and Income
Net sales increased by 5.8% year-on-year to ¥2,957.3 billion, and net income increased by 1.9% to ¥310.1 billion, marking record highs for Q3 on a cumulative basis.
Retail Finance Growth
Retail Finance sales increased by 23.2% year-on-year to ¥92 billion, and segment profit increased by 16.6% to ¥21.8 billion.
Industrial Machinery & Others Surge
Net sales increased by 11.6% year-on-year to ¥146.7 billion, and segment profit increased approximately 2.6 times year-on-year to ¥15.1 billion.
Introduction of New PC200i-12 Excavator
Launch of a new generation model PC200i-12 with industry-first features and improved fuel efficiency.
Positive Performance in Southeast Asia
Demand in Q3 of fiscal 2024 increased by 16% year-on-year, with strong performance in Indonesia and coal prices remaining firm.
Negative Updates
Construction, Mining & Utility Equipment Profit Decline
Segment profit decreased by 1.1% to ¥425 billion, and the segment profit ratio decreased by 0.9 points to 15.5%.
Decreased Demand in Key Markets
Demand in Europe and Japan decreased significantly, with Europe down 20% year-on-year and Japan revising full-year demand down to 0% to minus 5%.
Higher Production Costs
Production costs increased by ¥16.2 billion due to rising steel and rubber prices and increased labor costs.
Demand Decline in North America
Full-year demand forecast for fiscal 2024 in North America revised down to minus 5% to minus 10% year-on-year.
Weak Performance in Construction Equipment
Net sales in the Construction, Mining & Utility Equipment segment saw shortfalls, particularly in Europe and Japan.
Company Guidance
In the fiscal 2024 Q3 call, Komatsu reported a 4% increase in operating income to ¥162.6 billion, with a 0.3-point rise in the operating income ratio to 16.4%. Net sales reached ¥989.2 billion, marking a 1.8% year-on-year growth, while net income surged by 9.7% to ¥108.3 billion. The Construction, Mining & Utility Equipment segment saw net sales of ¥918.2 billion, with a slight segment profit decrease of 1.4% to ¥147 billion. Retail Finance and Industrial Machinery & Others showed robust growth, with sales increases of 11.1% and 7.5%, respectively. The yen strengthened against the dollar but weakened against the euro and Australian dollar, influencing financial outcomes. The company completed a ¥100 billion treasury stock acquisition and canceled 22,857,500 shares. Looking forward, fiscal 2024 demand projections remained aligned with October forecasts, while fiscal 2024 Q3 demand for major products decreased by 2% year-on-year, with full-year demand expected to drop by 5% to 10%.Komatsu Financial Statement Overview
Summary
Income statement strength (solid scale and improving margins; Income Statement Score 78) and a stable balance sheet with moderate leverage and ~13% ROE (Balance Sheet Score 74) are partially offset by weaker cash-flow quality and mixed cash conversion versus earnings (Cash Flow Score 64).Income Statement
Profitability and scale are solid, with TTM (Trailing-Twelve-Months) revenue of ~4.10T and healthy margins (gross ~31.5%, operating ~15.3%, net ~9.8%). The multi-year trajectory is favorable: revenue rose meaningfully from 2022–2025 and margins improved versus earlier years, indicating better operating leverage. The main watchout is that the latest revenue growth in the annual series has cooled (mid-single-digit recently), and TTM revenue growth appears unusually high versus the annual pattern, suggesting potential volatility or timing effects.78
Positive
Balance Sheet
The balance sheet looks stable with moderate leverage: TTM debt-to-equity is ~0.47 (annual 2025 ~0.38), and equity has grown alongside assets. Returns are respectable for the industry, with return on equity around ~13% in both TTM and recent annual periods. The key risk is leverage drifting higher in the TTM snapshot versus the most recent annual report, which can reduce flexibility if the cycle weakens.74
Positive
Cash Flow
Cash generation is positive, with TTM (Trailing-Twelve-Months) operating cash flow ~469.5B and free cash flow ~247.4B, and free cash flow has generally improved versus the weaker 2023 level. However, cash conversion is somewhat mixed: TTM free cash flow is only ~55% of net income, and operating cash flow coverage is relatively low (TTM ~0.25; 2025 annual ~0.31), implying working-capital swings or higher reinvestment needs that can pressure near-term cash consistency.64
Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.10T | 4.10T | 3.87T | 3.54T | 2.80T | 2.19T |
| Gross Profit | 627.11B | 1.32T | 1.21T | 1.04T | 779.58B | 581.05B |
| EBITDA | 787.97B | 825.44B | 787.00B | 658.49B | 473.14B | 309.67B |
| Net Income | 402.41B | 439.61B | 393.43B | 326.40B | 224.93B | 106.24B |
Balance Sheet | ||||||
| Total Assets | 6.31T | 5.77T | 5.64T | 4.88T | 4.35T | 3.78T |
| Cash, Cash Equivalents and Short-Term Investments | 429.03B | 385.57B | 403.18B | 294.46B | 316.67B | 243.13B |
| Total Debt | 1.58T | 1.22T | 1.27T | 1.12T | 1.01T | 965.85B |
| Total Liabilities | 2.76T | 2.43T | 2.44T | 2.20T | 1.99T | 1.77T |
| Stockholders Equity | 3.36T | 3.17T | 3.03T | 2.54T | 2.23T | 1.91T |
Cash Flow | ||||||
| Free Cash Flow | 247.37B | 311.31B | 231.83B | 22.94B | 138.01B | 172.58B |
| Operating Cash Flow | 469.53B | 517.17B | 434.78B | 206.47B | 300.97B | 354.13B |
| Investing Cash Flow | -95.95B | -210.67B | -204.42B | -169.52B | -143.57B | -163.06B |
| Financing Cash Flow | -171.79B | -321.42B | -122.04B | -66.61B | -93.87B | -199.67B |
Komatsu Technical Analysis
Neutral
33.01
Price Trends
40.46
Positive
37.07
Positive
35.14
Positive
Market Momentum
1.35
Positive
51.54
Neutral
10.96
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KMTUY, the sentiment is Neutral. The current price of 33.01 is below the 20-day moving average (MA) of 47.97, below the 50-day MA of 40.46, and below the 200-day MA of 35.14, indicating a neutral trend. The MACD of 1.35 indicates Positive momentum. The RSI at 51.54 is Neutral, neither overbought nor oversold. The STOCH value of 10.96 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KMTUY.
Komatsu Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $316.81B | 30.12 | 45.10% | 0.98% | -1.51% | -9.69% | |
73 Outperform | $159.30B | 54.83 | 19.74% | 1.34% | -11.66% | -27.80% | |
72 Outperform | $63.33B | 24.25 | 12.57% | 3.83% | -15.29% | -42.93% | |
68 Neutral | $40.79B | 11.75 | 12.42% | 4.03% | 0.99% | 9.08% | |
66 Neutral | $8.97B | 10.68 | 17.36% | 1.10% | -20.09% | 121.28% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
59 Neutral | $13.84B | 22.56 | 6.58% | 2.67% | -18.10% | -65.24% |
* Industrials Sector Average
KMTUY
Komatsu
45.52
15.57
51.98%
AGCO
Agco
123.88
22.30
21.96%
CAT
Caterpillar
680.90
340.38
99.96%
CNH
CNH Industrial
11.15
-2.14
-16.10%
DE
Deere
589.77
105.92
21.89%
PCAR
Paccar
120.43
12.64
11.72%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.