Makita (MKTAY) AI Stock Analysis

• Market Cap: $10.45B
• Dividend Yield: 1.58%
• Average Volume (3M): 509.00
• Price to Earnings (P/E): 20.6
• Beta (1Y): 0.53
• Revenue Growth: -0.88%
• EPS Growth: 32.73%
• Country: US
• Employees: 17,641
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 0.48
• Shares Outstanding: 280,017,550
• 10 Day Avg. Volume: 907
• 30 Day Avg. Volume: 509
• PEG Ratio: 0.21
• Price to Book (P/B): 1.45
• Price to Sales (P/S): 1.78
• P/FCF Ratio: 10.31
• Enterprise Value/Market Cap: 122.74
• Enterprise Value/Revenue: 1.69
• Enterprise Value/Gross Profit: 4.59
• Enterprise Value/Ebitda: 9.27
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 1.83
• Revenue Forecast (FY): $4.93B

• Rating: 75 Outperform
• Price Target: $43.00 ▲(41.54% Upside)
• Action: Reiterated Date: 01/31/26
• Date: Action: Reiterated 01/31/26

The score is driven primarily by strong financial performance—especially very low leverage and improved profitability—partly offset by historical earnings/cash-flow variability and weakening recent free-cash-flow growth. Technicals are supportive due to an uptrend above key moving averages, but elevated RSI suggests near-term downside risk. Valuation is fair with a modest dividend yield, neither strongly boosting nor detracting from the overall score.

Positive Factors

Conservative balance sheet

Makita's extremely low leverage (debt-to-equity ~0.03) and large equity base provide durable financial flexibility. This lowers refinancing and insolvency risk across cycles, supports working-capital swings, funds strategic capex or M&A, and preserves investment optionality in downturns.

Strong margins and operating profitability

Sustained gross and operating margins indicate pricing power and manufacturing efficiency in Makita's tools business. Higher margins underpin cash generation, enable reinvestment in cordless platform development and product quality, and help cushion margin pressure from commodity cost moves.

Solid absolute cash generation

Meaningful operating cash flow and FCF, with FCF roughly 81% of net income, show the business converts profits into cash. That supports sustainable capex, after-sales service investments and modest shareholder returns without relying on external financing in normal conditions.

Negative Factors

Negative FCF growth / uneven conversion

Despite strong absolute FCF, the latest TTM shows negative FCF growth and historical cash-conversion swings. Persistent variability in cash generation can limit multi-year investment planning, make dividend or buyback policy less predictable, and reduce buffer during cyclical downturns.

Modest revenue growth / mature market

Top-line growth appears subdued (~1.6% and a prior decline), suggesting Makita operates in a mature tools market. Long-term upside will likely rely on increasing share within professional channels, accessory attach rates or new platform adoption rather than sustained high organic revenue growth.

Historical earnings volatility

Makita's profitability has swung materially in the past (very low margins in 2023), reflecting exposure to cyclical demand, input-cost swings, or working-capital effects. This volatility complicates capital allocation, forecasting, and may pressure returns during adverse cycles.

Makita Business Overview & Revenue Model

Company Description

Makita Corporation (MKTAY) is a leading global manufacturer of power tools and outdoor power equipment based in Japan. Established in 1915, the company operates primarily in the industrial and consumer sectors, offering a diverse range of products including cordless and electric power tools, garden tools, and accessories. Makita is renowned for its innovation and quality, serving professionals in construction, woodworking, and landscaping, as well as DIY enthusiasts.

How the Company Makes Money

Makita generates revenue primarily through the sale of its power tools and outdoor equipment, which includes a wide array of products such as drills, saws, grinders, and lawn care tools. The company's revenue model is built on both direct sales to retailers and distributors, as well as online sales through various platforms. Key revenue streams include the sales of new tools, replacement parts, and accessories, which contribute significantly to recurring revenues. Additionally, Makita benefits from strategic partnerships with distributors and retailers worldwide, enabling them to expand their market reach. The company also invests in research and development to innovate and improve its product offerings, which helps maintain a competitive edge and drives sales growth. Factors such as brand loyalty, high demand for electric and cordless tools, and expansion into emerging markets further contribute to Makita's earnings.

Makita Financial Statement Overview

Summary

Financial quality is strong overall, led by a very conservative balance sheet (debt-to-equity ~0.03) and a clear profitability recovery (TTM net margin ~10.0%, EBIT margin ~14.1%). Offsetting factors are modest recent revenue growth (~1.6%) and historical earnings/cash-flow volatility, including uneven cash conversion and negative TTM free-cash-flow growth.

Income Statement

Profitability has strengthened materially versus the weaker 2023 period: TTM (Trailing-Twelve-Months) gross margin is ~36.6% and net margin is ~10.0%, with solid operating profitability (EBIT margin ~14.1%). Revenue growth is modest in the latest annual period (~1.6%) after a decline in 2024, indicating a more mature/steady top-line profile rather than high growth. Key watch-out is the historical volatility in earnings power (notably very low margins in 2023), which suggests results can swing with cycle/inputs or demand conditions.

Balance Sheet

Balance sheet looks very conservative. TTM (Trailing-Twelve-Months) leverage is low (debt-to-equity ~0.03), supported by a large equity base, which provides meaningful financial flexibility in a cyclical manufacturing business. Returns on equity are healthy (TTM ~7.9%) and improved from the very low 2023 level, though still below the higher levels seen in some prior years—suggesting profitability has recovered but is not consistently at peak.

Cash Flow

Cash generation is generally solid with positive TTM (Trailing-Twelve-Months) operating cash flow (~107.1B) and free cash flow (~86.7B). Free cash flow is reasonably supported by earnings (TTM free cash flow is ~81% of net income). However, free cash flow growth is negative in the latest TTM period, and cash conversion has been uneven historically (including a year with negative operating and free cash flow), implying working-capital swings or reinvestment cycles can pressure near-term cash results.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	758.90B	753.13B	741.39B	764.70B	739.26B	608.33B
Gross Profit	279.40B	271.43B	223.94B	188.75B	228.32B	203.05B
EBITDA	138.32B	144.25B	99.74B	57.45B	114.67B	106.77B
Net Income	78.76B	79.34B	43.69B	11.71B	64.77B	62.02B
Balance Sheet
Total Assets	1.20T	1.11T	1.06T	1.10T	1.01T	812.88B
Cash, Cash Equivalents and Short-Term Investments	285.31B	292.94B	215.21B	162.72B	71.06B	148.64B
Total Debt	34.96B	10.15B	19.89B	186.39B	79.67B	2.61B
Total Liabilities	181.54B	174.03B	180.60B	323.65B	254.97B	149.55B
Stockholders Equity	1.01T	926.01B	868.16B	769.25B	746.34B	657.86B
Cash Flow
Free Cash Flow	86.71B	129.87B	219.24B	5.34B	-163.60B	14.68B
Operating Cash Flow	107.13B	129.87B	237.09B	44.43B	-103.66B	64.54B
Investing Cash Flow	-25.04B	-37.87B	-25.62B	-37.68B	-27.89B	-42.91B
Financing Cash Flow	-24.11B	-33.55B	-191.28B	80.97B	52.63B	-23.04B

Makita Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 30.38
• 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 MKTAY, the sentiment is Positive. The current price of 30.38 is below the 20-day moving average (MA) of 38.25, below the 50-day MA of 33.83, and below the 200-day MA of 31.96, indicating a bullish trend. The MACD of 1.43 indicates Positive momentum. The RSI at 62.99 is Neutral, neither overbought nor oversold. The STOCH value of 31.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MKTAY.

Makita Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNA	78 Outperform	$20.22B	20.08	17.96%	2.52%	0.24%	-1.85%
MKTAY	75 Outperform	$10.45B	20.58	9.22%	1.58%	-0.88%	32.73%
LECO	72 Outperform	$15.73B	30.81	37.22%	1.22%	3.27%	10.89%
TKR	72 Outperform	$7.65B	26.39	9.60%	1.61%	-1.01%	-12.13%
TTC	70 Outperform	$9.81B	31.21	21.04%	1.95%	-1.53%	-21.19%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
SWK	62 Neutral	$13.03B	32.68	4.52%	4.42%	-1.40%	―