Makita (MKTAY) AI Stock Analysis

• Market Cap: $9.39B
• Dividend Yield: 1.58%
• Average Volume (3M): 509.00
• Price to Earnings (P/E): 16.1
• Beta (1Y): 0.54
• 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: 124.10
• Enterprise Value/Revenue: 1.54
• Enterprise Value/Gross Profit: 4.17
• Enterprise Value/Ebitda: 8.42
• 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: 75 Outperform
• Price Target: $39.00 ▲(28.37% Upside)

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

Very low leverage

Makita's extremely low leverage (debt/equity ~0.03) provides durable financial flexibility in a cyclical manufacturing business. It reduces refinancing risk, supports countercyclical capex and R&D spending, and preserves the ability to sustain distributor support and strategic investments over months.

Improved profitability

Sustained margins (TTM net ~10%, EBIT ~14.1%) indicate stronger pricing power and cost control in core power-tool and outdoor segments. Higher operating profitability supports reinvestment in product development and distribution, enhancing the firm's resilience to input-cost cycles over the medium term.

Positive cash generation

Consistent positive operating and free cash flow shows the business converts earnings into cash, supporting dividends, steady R&D and inventory funding. Reliable cash generation underpins durable capital allocation decisions and buffers the company through cyclical swings over coming quarters.

Negative Factors

Stagnant revenue growth

Revenue growth is muted (~1.6%) with a prior-year decline, reflecting a mature product portfolio and limited secular expansion. Over a 2–6 month horizon, weak top-line momentum constrains operating leverage benefits and means meaningful earnings improvement will likely require new products or market expansion.

Earnings and cash volatility

Past volatility in earnings and cash conversion — including a period of negative operating and free cash flow and recent negative FCF growth — signals sensitivity to working-capital swings, input costs and demand cycles. This reduces predictability of cash available for investments and payouts.

Moderate return on equity

ROE (~7.9%) has recovered from weak levels but remains below historical peaks, suggesting capital is not yet deployed as efficiently as before. In a cyclical manufacturing industry this may cap long-term shareholder return without structural gains in pricing, mix or operational efficiency.

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

Makita demonstrates strong profitability and a solid balance sheet with minimal leverage, providing financial stability. However, the significant revenue decline and reduced cash flow generation in the TTM pose challenges that need to be addressed to sustain growth and liquidity in the future.

Income Statement

Makita's income statement shows strong profitability with a Gross Profit Margin of 37.19% and a Net Profit Margin of 10.73% for the TTM. However, the company experienced a significant revenue decline of 25.68% in the TTM, indicating potential challenges in maintaining growth. Despite this, the EBIT and EBITDA margins remain healthy at 14.87% and 18.82% respectively, showcasing operational efficiency.

Balance Sheet

The balance sheet is robust with a very low Debt-to-Equity Ratio of 0.0033, indicating minimal leverage and financial risk. The Return on Equity is solid at 8.62%, reflecting effective use of equity to generate profits. The Equity Ratio stands at 83.92%, highlighting a strong equity base relative to total assets.

Cash Flow

Cash flow analysis reveals a decline in Free Cash Flow by 33.45% in the TTM, which could impact future liquidity. The Operating Cash Flow to Net Income Ratio is 0.73, suggesting that cash generation from operations is lower than net income. However, the Free Cash Flow to Net Income Ratio of 0.81 indicates a reasonable conversion of net income into free cash flow.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	753.13B	741.39B	764.70B	739.26B	608.33B
Gross Profit	271.43B	223.94B	188.75B	228.32B	203.05B
EBITDA	144.25B	99.74B	57.45B	114.67B	106.77B
Net Income	79.34B	43.69B	11.71B	64.77B	62.02B
Balance Sheet
Total Assets	1.11T	1.06T	1.10T	1.01T	812.88B
Cash, Cash Equivalents and Short-Term Investments	292.94B	215.21B	162.72B	71.06B	148.64B
Total Debt	10.15B	19.89B	186.39B	79.67B	2.61B
Total Liabilities	174.03B	180.60B	323.65B	254.97B	149.55B
Stockholders Equity	926.01B	868.16B	769.25B	746.34B	657.86B
Cash Flow
Free Cash Flow	129.87B	219.24B	5.34B	-163.60B	14.68B
Operating Cash Flow	129.87B	237.09B	44.43B	-103.66B	64.54B
Investing Cash Flow	-37.87B	-25.62B	-37.68B	-27.89B	-42.91B
Financing Cash Flow	-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: Negative
• RSI: Negative
• 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 31.17, above the 50-day MA of 30.13, and below the 200-day MA of 31.09, indicating a bullish trend. The MACD of 0.39 indicates Negative momentum. The RSI at 73.59 is Negative, neither overbought nor oversold. The STOCH value of 35.85 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	$19.04B	19.22	17.96%	2.52%	0.24%	-1.85%
LECO	77 Outperform	$14.60B	28.69	38.11%	1.22%	3.27%	10.89%
TKR	76 Outperform	$6.49B	22.27	9.80%	1.61%	-1.01%	-12.13%
MKTAY	75 Outperform	$9.39B	16.15	9.22%	1.58%	-0.88%	32.73%
TTC	69 Neutral	$8.95B	28.96	21.04%	1.95%	-1.53%	-21.19%
SWK	66 Neutral	$12.18B	27.37	4.92%	4.42%	-1.40%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%