NGK Spark Plug Co (NGKSY) AI Stock Analysis

• Market Cap: $9.39B
• Dividend Yield: 2.71%
• Average Volume (3M): 0.00
• Price to Earnings (P/E): 11.0
• Beta (1Y): 0.62
• Revenue Growth: 7.48%
• EPS Growth: 12.63%
• Country: US
• Employees: 15,980
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 0.49
• Shares Outstanding: 398,495,450
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: 0.68
• Price to Book (P/B): 1.29
• Price to Sales (P/S): 1.33
• P/FCF Ratio: 8.87
• Enterprise Value/Market Cap: 166.03
• Enterprise Value/Revenue: 2.23
• Enterprise Value/Gross Profit: 5.65
• Enterprise Value/Ebitda: 8.28
• 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: $27.00 ▲(25.58% Upside)
• Action: Upgraded Date: 02/01/26
• Date: Action: Upgraded 02/01/26

The score is driven primarily by strong profitability and improving margins with solid returns, tempered by recent cash-flow weakening and slower growth. Valuation is supportive with a modest P/E and dividend, while technicals are neutral-to-slightly positive due to the longer-term uptrend but softer near-term positioning.

Positive Factors

High margins and profitability

NGK reports persistently high TTM margins across gross, EBIT and net lines, reflecting cost control and pricing power in core consumable products. Durable margin levels support cash generation and resilience through cycles, underpinning sustained returns and reinvestment capacity.

Healthy capital structure

The company maintains a conservative capital base with sizeable equity and a reasonable leverage profile versus peers. This financial headroom supports strategic investment, dividend continuity and ability to absorb shocks, though the recent uptick in TTM leverage warrants monitoring.

Recurring aftermarket demand and product diversification

A large portion of sales are recurring aftermarket consumables and parts for industrial applications, producing steady demand and predictable replacement cycles. That recurring revenue plus diversified end markets smooths cash flow and reduces dependence on single-cycle new vehicle sales.

Negative Factors

Revenue growth deceleration

Top-line momentum has slowed from prior multi-year gains to near-flat annual growth and only modest TTM expansion. Persistent revenue deceleration can limit operating leverage benefits, constrain absolute earnings upside, and make sustaining margin improvements harder over the medium term.

Weakened cash-flow conversion

A roughly 15% decline in FCF and a sharp drop in coverage reduce internal funding capacity for capex, dividends or buybacks. Lower cash conversion increases reliance on external financing if investment needs rise and reduces the margin for operational shocks over the next several quarters.

Exposure to internal combustion engine demand

Core products are tied to ICE vehicle systems (spark plugs, ignition components). As structural EV adoption progresses, the addressable market for ignition products may shrink over time. Even with industrial diversification, meaningful exposure to ICE demand is a long-term strategic risk to revenue and product relevance.

NGK Spark Plug Co Business Overview & Revenue Model

Company Description

NGK Spark Plug Co., Ltd., together with its subsidiaries, manufactures and sells spark plugs and related products for internal-combustion engines; and technical ceramics and applicable products in Japan. The company offers spark plugs, including plugs for aftermarket and original equipment, igniter plugs, and resister cables and covers; glow plugs comprising ceramic and metal type glow plugs, and glow controllers; and oxygen, NOx, temperature, and knock sensors. It also provides semiconductor packages and substrates, such as IC packages for electronics and smart devices, as well as manufacturing parts for semiconductors; and medical products. In addition, the company offers fine ceramics, including wear-resistant parts, ultrasonic transducers and sensors, products for semiconductor manufacturing equipment, electric equipment products, and other ceramic products. Further, it provides cutting tools comprising ceramic, cermet, micro grain carbide, coated carbide, and cubic boron nitride grades, as well as SS and rotational tools. The company sells its spark and glow plugs under NGK brand; and sensors, semiconductor packages/substrates, cutting tools, and fine ceramics under NTK brand. NGK Spark Plug Co., Ltd. was founded in 1936 and is headquartered in Nagoya, Japan.

How the Company Makes Money

NGK Spark Plug Co. generates revenue primarily by manufacturing and selling ignition and engine-related components, with sales made to (1) automotive original equipment manufacturers (OEMs) for installation in new vehicles and equipment, and (2) the aftermarket, supplying replacement parts through distributors, retailers, and service channels. A significant portion of earnings is tied to unit volumes and pricing of core consumable replacement products (e.g., spark plugs), which benefit from recurring demand over a vehicle’s operating life. The company also earns revenue from sales of other engine/industrial components supplied into broader end markets beyond passenger vehicles. Specific breakdowns of revenue by segment, margin contribution by business line, and the identities/terms of major partnerships or supply agreements are null.

NGK Spark Plug Co Financial Statement Overview

Summary

Strong profitability and improving margins (TTM gross ~39%, net ~15%, EBIT ~22%) with solid ROE (~14%) and manageable leverage, but offsets include slowing revenue growth and weaker TTM cash-flow momentum/coverage (FCF down ~15% and coverage measure ~0.38 vs ~0.87 last annual).

Income Statement

NGK Spark Plug shows a strong multi-year earnings trajectory: revenue has risen steadily from 2021 to 2025, and profitability has expanded meaningfully, with TTM (Trailing-Twelve-Months) gross margin ~39% and net margin ~15% (up from ~9% in 2021). Operating profitability is solid (TTM EBIT margin ~22% and EBITDA margin ~28%), indicating good cost control and pricing power. The key weakness is that growth has decelerated versus prior years, with the latest annual revenue growth near flat and TTM growth only modest.

Balance Sheet

The balance sheet appears healthy with sizeable equity and a reasonable leverage profile. While debt-to-equity was quite conservative in the latest annual period (~0.23), TTM leverage is higher (~0.41), suggesting debt increased or equity shifted versus the last fiscal year. Returns remain solid and stable (return on equity ~14% TTM), supporting the quality of the capital base. Main risk to monitor is the recent uptick in leverage versus the prior annual snapshot.

Cash Flow

Cash generation is positive, with TTM (Trailing-Twelve-Months) free cash flow covering a substantial portion of net income (~70%), which supports earnings quality. However, the latest TTM shows weakening momentum: free cash flow fell roughly 15% and operating cash flow relative to the company’s obligations/needs (as reflected in the provided coverage measure) is notably lower TTM (~0.38) than in the latest annual period (~0.87). Overall, cash flow remains a strength, but near-term conversion and coverage have softened.

Breakdown	TTM	Mar 2025	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	699.69B	652.99B	614.49B	562.56B	491.73B	427.55B
Gross Profit	276.25B	258.10B	226.19B	197.82B	156.17B	130.22B
EBITDA	188.33B	180.14B	145.40B	127.26B	104.22B	81.49B
Net Income	102.78B	92.63B	82.65B	66.29B	60.20B	38.37B
Balance Sheet
Total Assets	1.23T	990.97B	975.72B	903.10B	823.18B	771.29B
Cash, Cash Equivalents and Short-Term Investments	231.32B	233.46B	207.92B	219.79B	188.34B	165.79B
Total Debt	302.92B	156.68B	178.11B	186.42B	154.74B	187.54B
Total Liabilities	483.17B	316.24B	337.42B	339.36B	305.19B	319.67B
Stockholders Equity	743.91B	674.57B	637.68B	563.67B	514.32B	448.83B
Cash Flow
Free Cash Flow	68.77B	98.14B	82.72B	44.98B	44.07B	33.82B
Operating Cash Flow	95.00B	132.92B	118.18B	69.31B	71.91B	63.40B
Investing Cash Flow	-23.17B	-34.25B	-92.16B	-37.38B	10.23B	-42.52B
Financing Cash Flow	-38.64B	-71.00B	-57.45B	-1.77B	-53.83B	28.17B

NGK Spark Plug Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 21.50
• 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 NGKSY, the sentiment is Positive. The current price of 21.5 is below the 20-day moving average (MA) of 24.53, below the 50-day MA of 22.97, and above the 200-day MA of 19.92, indicating a neutral trend. The MACD of 0.37 indicates Positive momentum. The RSI at 53.93 is Neutral, neither overbought nor oversold. The STOCH value of 65.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NGKSY.

NGK Spark Plug Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NGKSY	75 Outperform	$9.39B	10.96	13.54%	2.71%	7.48%	12.63%
ALSN	74 Outperform	$9.39B	13.20	34.97%	1.07%	-4.21%	-0.45%
LEA	72 Outperform	$5.89B	14.06	8.79%	2.63%	-1.90%	-13.86%
LKQ	68 Neutral	$7.33B	12.73	9.42%	4.00%	-3.71%	-0.27%
BWA	62 Neutral	$10.73B	35.20	4.80%	1.24%	0.08%	-83.69%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DAN	59 Neutral	$3.46B	38.91	-2.91%	1.70%	-18.23%	―