Seiko Epson (SEKEY) AI Stock Analysis

• Market Cap: $4.31B
• Dividend Yield: 3.35%
• Average Volume (3M): 1.25K
• Price to Earnings (P/E): 15.1
• Beta (1Y): 0.35
• Revenue Growth: 1.21%
• EPS Growth: 7.70%
• Country: US
• Employees: 75,352
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 0.17
• Shares Outstanding: 747,146,300
• 10 Day Avg. Volume: 1,318
• 30 Day Avg. Volume: 1,254
• PEG Ratio: 2.23
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.57
• P/FCF Ratio: 11.54
• Enterprise Value/Market Cap: 146.95
• Enterprise Value/Revenue: 0.45
• Enterprise Value/Gross Profit: 1.26
• Enterprise Value/Ebitda: 4.18
• 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: 70 Outperform
• Price Target: $7.50 ▲(18.30% Upside)
• Action: Upgraded Date: 02/05/26
• Date: Action: Upgraded 02/05/26

The score is driven primarily by stable but mixed financial performance—conservative leverage and steady revenue are offset by margin compression and weaker cash conversion. Technicals add support due to an above-average uptrend and positive momentum, while valuation is reasonable with a solid dividend yield.

Positive Factors

Conservative balance sheet

Epson's low debt-to-equity (~0.26) and meaningful equity growth improve financial flexibility and lower refinancing risk. Over 2-6 months this supports steady investment in R&D, capex for printers/microdevices, and the ability to sustain dividends or weather cyclical downturns without forcing asset sales.

Consistent gross margins

Mid-30s gross margins indicate durable product-level profitability driven by proprietary printheads and manufacturing know-how. Sustained gross margins provide a buffer against input cost swings and underpin long-term operating profitability even if operating expenses or sales mix vary over the medium term.

Recurring consumables & services model

Epson's mix of hardware sales with recurring ink/consumables and service contracts creates predictable, high-lifetime-value revenue. This installed-base economics supports more stable cash flows, better margin visibility, and cross-sell opportunities that endure beyond short-term demand cycles.

Negative Factors

Net margin compression

A material drop in net margin from double digits to ~3.1% signals weaker earnings power and lower retained cash for reinvestment. Persistent margin pressure can curtail R&D, capex, and dividend capacity, and requires structural fixes (pricing, mix, cost cuts) to restore long-term returns.

Weak and volatile cash conversion

FCF amounting to only ~40% of net income and historical volatility reduce financial predictability. Lower cash conversion constrains organic investment, M&A optionality, and shareholder returns, making long-term strategic initiatives more dependent on stable improvement in cash generation.

Declining returns on equity

ROE falling to ~5.3% from prior double-digit levels shows weakened capital efficiency and suggests management is generating lower returns on invested capital. Persistently lower ROE can limit growth capacity and investor support unless operational performance or margin structure is improved.

Seiko Epson Business Overview & Revenue Model

Company Description

Seiko Epson Corporation, together with its subsidiaries, develops, manufactures, sells, and provides services for products in the printing solutions, visual communications, manufacturing-related and wearables, and other businesses. It operates through three segments: Printing Solutions, Visual Communications, and Manufacturing-related and Wearables segments. The Printing Solutions segment offers home and office inkjet printers, serial impact dot matrix printers, page printers, color image scanners, dry process office papermaking systems, commercial and industrial inkjet printers, inkjet printheads, printers for use in POS systems, label printers, printer consumables, and others. The Visual Communications segment provides 3LCD projectors for business, education, the home, and event; smart glasses; and others. The Manufacturing-related and Wearables segment offers wristwatches, watch movements, and others; factory automation products, industrial robots, compact injection molders, and other production systems; and crystal units, crystal oscillators, quartz sensors, and others for consumer, automotive, and industrial equipment applications. This segment also provides CMOS LSIs and other chips primarily for consumer electronics and automotive applications; and metal powders for use as raw materials in the production of electronic components, etc., as well as value-added surface finishing in a range of industrial fields. The company also sells PCs, etc. It has operations in Japan, the Philippines, the United States, Indonesia, China, and internationally. The company was incorporated in 1942 and is headquartered in Suwa, Japan.

How the Company Makes Money

Epson generates revenue primarily through the sale of its printing and imaging products, which includes inkjet and laser printers, as well as consumables like ink cartridges and paper. The company also earns money from its visual communication segment, which markets projectors and related accessories. Additionally, Epson's industrial solutions division, which encompasses robotics and automation technologies, contributes to its revenue streams. Significant partnerships with businesses in various sectors, including retail and manufacturing, as well as a focus on providing integrated solutions, help bolster Epson's earnings. The company also benefits from a recurring revenue model through consumable sales, creating a steady income flow from customers who require ongoing supplies for their devices.

Seiko Epson Financial Statement Overview

Summary

Financials are stable but not strong: revenue is modestly growing (TTM ~+2.5%) and gross margins remain solid (~34–37%), while leverage is conservative (debt-to-equity ~0.26). Offsetting this, profitability has compressed (TTM net margin ~3.1% vs ~8.2% in FY2022) and cash conversion is weaker and historically volatile (FCF ~40% of net income in TTM).

Income Statement

Revenue has been broadly stable to modestly growing, with TTM (Trailing-Twelve-Months) revenue up about 2.5% and a return to growth after a slight dip in 2024. Profitability, however, has softened versus prior years: TTM net margin is ~3.1% (down from ~4.0% in FY2024/FY2025 and ~8.2% in FY2022), and operating profitability has also stepped down from the FY2022–FY2023 peak. Strengths include consistently solid gross margins (~34–37%) and positive operating profit, while the key weakness is margin compression and lower earnings power in the latest TTM period.

Balance Sheet

The balance sheet looks conservatively financed for the sector, with debt-to-equity around 0.26 in TTM (Trailing-Twelve-Months), improving from higher leverage earlier in the period (about 0.48 in FY2021). Equity has grown meaningfully over time, supporting financial flexibility. Returns have moderated (TTM return on equity ~5.3% versus double-digit levels in FY2022–FY2023), which tempers the score, but overall leverage remains manageable and capital structure appears stable.

Cash Flow

Cash generation is positive but uneven. TTM (Trailing-Twelve-Months) operating cash flow is solid and free cash flow grew (~14%), yet free cash flow is only ~40% of net income in TTM, indicating weaker cash conversion than in FY2022–FY2024 (when free cash flow was a much larger share of earnings). Free cash flow also showed notable volatility historically (very low in FY2023), which adds risk even though recent results have improved.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	1.40T	1.36T	1.31T	1.33T	1.13T	995.94B
Gross Profit	500.57B	493.03B	456.67B	450.76B	418.45B	352.38B
EBITDA	151.54B	153.44B	141.49B	147.39B	139.09B	118.92B
Net Income	43.66B	55.18B	52.62B	75.04B	92.29B	30.92B
Balance Sheet
Total Assets	1.53T	1.46T	1.41T	1.34T	1.27T	1.16T
Cash, Cash Equivalents and Short-Term Investments	254.14B	269.45B	330.48B	267.38B	335.24B	304.01B
Total Debt	222.71B	224.71B	204.78B	233.28B	243.15B	265.91B
Total Liabilities	669.13B	651.57B	601.96B	614.10B	600.68B	608.36B
Stockholders Equity	856.55B	804.75B	810.99B	727.35B	665.63B	550.92B
Cash Flow
Free Cash Flow	38.45B	67.81B	108.98B	2.21B	66.96B	77.35B
Operating Cash Flow	94.06B	138.07B	165.57B	61.31B	110.80B	133.22B
Investing Cash Flow	-63.19B	-150.79B	-58.98B	-61.60B	-44.08B	-57.45B
Financing Cash Flow	-42.50B	-45.13B	-65.39B	-79.35B	-51.77B	23.15B

Seiko Epson Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.34
• 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 SEKEY, the sentiment is Positive. The current price of 6.34 is below the 20-day moving average (MA) of 6.65, below the 50-day MA of 6.49, and below the 200-day MA of 6.46, indicating a bullish trend. The MACD of 0.11 indicates Positive momentum. The RSI at 53.01 is Neutral, neither overbought nor oversold. The STOCH value of 27.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SEKEY.

Seiko Epson Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WDC	77 Outperform	$100.55B	29.77	41.27%	0.18%	-16.35%	316.56%
SEKEY	70 Outperform	$4.31B	15.07	5.27%	3.35%	1.21%	7.70%
NTAP	70 Outperform	$20.07B	17.63	125.35%	1.89%	2.64%	4.12%
STX	70 Outperform	$92.49B	47.96	―	1.02%	31.56%	106.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
HPQ	61 Neutral	$16.85B	6.91	―	5.09%	4.09%	-5.77%
SMCI	58 Neutral	$17.80B	23.88	13.19%	―	12.22%	-48.34%