Nitto Denko (NDEKY) AI Stock Analysis

• Market Cap: $16.06B
• Dividend Yield: 1.5%
• Average Volume (3M): 1.71K
• Price to Earnings (P/E): 19.3
• Beta (1Y): 0.70
• Revenue Growth: 2.70%
• EPS Growth: -5.59%
• Country: US
• Employees: 25,300
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 0.37
• Shares Outstanding: 678,659,700
• 10 Day Avg. Volume: 2,129
• 30 Day Avg. Volume: 1,708
• PEG Ratio: -0.89
• Price to Book (P/B): 3.73
• Price to Sales (P/S): 3.84
• P/FCF Ratio: 34.83
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 0.02
• Enterprise Value/Gross Profit: 0.05
• Enterprise Value/Ebitda: 0.08
• 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: 63 Neutral
• Price Target: $25.00 ▲(5.71% Upside)

Nitto Denko's financial health is supported by strong profitability and low leverage, but the decline in revenue and cash flow growth is concerning. Technical indicators show weak momentum, and the stock is oversold, suggesting potential for recovery. Valuation is reasonable, providing a balanced risk-reward profile.

Positive Factors

Strong Profitability Margins

High gross profit margins indicate efficient production and cost management, supporting long-term profitability and competitive positioning.

Low Leverage

Minimal leverage reduces financial risk and enhances stability, providing the company with greater flexibility to invest in growth opportunities.

Strategic Partnerships

The collaboration with Codexis could lead to licensing and adoption of innovative manufacturing processes, potentially enhancing product offerings and market reach.

Negative Factors

Declining Revenue Growth

A substantial decline in revenue growth poses risks to future profitability and may indicate challenges in maintaining market share or adapting to industry changes.

Decline in Free Cash Flow Growth

Reduced free cash flow growth limits the company's ability to reinvest in business operations, potentially hindering future expansion and innovation.

Earnings Decline

Negative EPS growth reflects declining profitability, which can impact investor confidence and limit the company's ability to fund new initiatives.

Nitto Denko Business Overview & Revenue Model

Company Description

Nitto Denko Corporation, commonly known as Nitto Denko, is a global leader in the manufacturing of advanced materials and industrial products. Founded in Japan, the company operates in several sectors, including automotive, electronics, medical, and construction. Nitto Denko is renowned for its diverse product portfolio that includes adhesive tapes, optical films, and automotive sealing materials, as well as specialty materials for semiconductor and display technologies.

How the Company Makes Money

Nitto Denko generates revenue primarily through the sale of its wide range of products across various industries. The company's revenue model is driven by several key streams, including the sale of adhesive products, electronic materials, and medical supplies. A significant portion of its earnings comes from long-term contracts and partnerships with major manufacturers in the automotive and electronics sectors, which provide stable revenue. Additionally, Nitto Denko invests in research and development to innovate and expand its product offerings, allowing it to cater to evolving market needs and maintain a competitive edge. The company's commitment to sustainability and high-quality products further enhances its market position, contributing to its overall profitability.

Nitto Denko Financial Statement Overview

Summary

Nitto Denko demonstrates strong profitability and a robust balance sheet with minimal leverage. However, the significant revenue decline and reduced free cash flow growth in the TTM period pose potential risks. The company maintains operational efficiency and a solid capital structure, positioning it well for future growth if revenue challenges are addressed.

Income Statement

Nitto Denko's income statement shows strong profitability with a consistent gross profit margin around 38.5% and a net profit margin of 13.1% in the TTM period. However, the company experienced a revenue decline of 30.8% in the TTM, indicating potential challenges in maintaining growth. Despite this, EBIT and EBITDA margins remain robust at 17.7% and 24.3%, respectively, showcasing operational efficiency.

Balance Sheet

The balance sheet is very strong with a negligible debt-to-equity ratio of 0.0005, indicating minimal leverage and financial risk. The return on equity is healthy at 12.8%, reflecting efficient use of equity to generate profits. The equity ratio stands at 79.6%, highlighting a solid capital structure with a significant portion of assets financed by equity.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 19.8% in the TTM, which could be a concern. However, the operating cash flow to net income ratio is nearly 1, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 43.9%, suggesting a reasonable conversion of net income into free cash flow.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	740.16B	1.01T	915.14B	929.04B	853.45B	761.32B
Gross Profit	279.54B	395.51B	330.86B	337.44B	302.39B	243.45B
EBITDA	169.57B	254.06B	202.17B	206.14B	177.20B	139.07B
Net Income	88.82B	137.24B	102.68B	109.17B	97.13B	70.23B
Balance Sheet
Total Assets	8.98B	1.32T	1.25T	1.15T	1.09T	965.90B
Cash, Cash Equivalents and Short-Term Investments	2.05B	371.08B	347.49B	332.11B	366.99B	302.29B
Total Debt	18.75M	455.00M	345.00M	272.00M	241.00M	545.00M
Total Liabilities	1.88B	276.81B	266.04B	250.45B	272.36B	249.22B
Stockholders Equity	7.10B	1.04T	984.02B	902.21B	821.19B	715.87B
Cash Flow
Free Cash Flow	49.25B	111.91B	87.75B	115.78B	85.53B	58.59B
Operating Cash Flow	130.22B	217.91B	155.52B	181.70B	144.49B	116.31B
Investing Cash Flow	-48.17B	-115.11B	-67.93B	-159.91B	-57.59B	-57.54B
Financing Cash Flow	-42.82B	-78.89B	-90.78B	-57.63B	-36.64B	-68.30B

Nitto Denko Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 23.65
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NDEKY, the sentiment is Neutral. The current price of 23.65 is below the 20-day moving average (MA) of 24.26, below the 50-day MA of 24.72, and above the 200-day MA of 21.19, indicating a neutral trend. The MACD of -0.15 indicates Positive momentum. The RSI at 41.89 is Neutral, neither overbought nor oversold. The STOCH value of 7.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NDEKY.

Nitto Denko Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RPM	71 Outperform	$13.86B	20.18	24.05%	1.91%	3.09%	12.25%
NDEKY	63 Neutral	$16.06B	19.32	13.21%	1.50%	2.70%	-5.59%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
IFF	61 Neutral	$16.81B	-40.39	-2.84%	2.44%	-3.01%	82.30%
ALB	58 Neutral	$15.86B	-87.98	-0.21%	1.15%	-23.92%	90.47%
LYB	52 Neutral	$14.09B	-11.45	-10.44%	12.66%	-19.65%	-157.13%
WLK	52 Neutral	$9.49B	-10.07	-9.48%	2.82%	-5.32%	-1108.29%