Subaru Corp

Subaru Corp maintains a conservative capital structure with a debt-to-equity ratio of 0.2, indicating a low reliance on debt financing. The company's liquidity position is characterized by a current ratio of 2.45, suggesting it has sufficient short-term assets to cover its liabilities. However, the company's free cash flow of ¥58.77 billion is relatively modest compared to its operating cash flow of ¥76.77 billion, indicating that capital expenditures are consuming a significant portion of its cash flow.

Profitability metrics show that Subaru Corp is generating a return on equity (ROE) of 3.36% and a return on assets (ROA) of 1.79%. These figures are below the industry median for ROE and ROA, which are typically higher for automotive manufacturers with more efficient asset utilization and stronger pricing power. The company's operating margin, calculated as operating income of ¥97.21 billion on revenue of ¥1.21 trillion, is 8.06%, which is in line with the industry average but leaves room for improvement in cost management and pricing strategies.

Subaru Corp's revenue is primarily concentrated in its core automotive manufacturing segment, with a significant portion of its sales coming from the domestic Japanese market and international markets, particularly in North America and Southeast Asia. The company's geographic exposure is well diversified, with no single region accounting for more than 30% of total revenue. This diversification helps mitigate regional economic risks but also exposes the company to currency fluctuations and varying regulatory environments.

Looking ahead, Subaru Corp is projected to experience moderate revenue growth, with analysts forecasting a mean price target of ¥3,190.67 per share, representing a potential upside of approximately 31% from the current market price of ¥2,432.5. The company's capital expenditure of ¥29.99 billion in the latest period suggests a continued investment in production capacity and technological advancements, which could support long-term growth. However, the company's free cash flow generation is expected to remain constrained due to ongoing capital spending.

Risk factors for Subaru Corp include liquidity concerns, as the company's net cash position is negative after accounting for total debt. This could limit its ability to fund operations and investments without external financing. Additionally, the company faces potential dilution risks, although these are currently assessed as low. The company's reliance on a few key markets and the competitive nature of the automotive industry also pose challenges to its long-term profitability and market share.

Recent events, including the company's latest financial filings and investor relations communications, indicate a stable operational environment with no major disruptions reported. The company has not issued any new shares recently, and there are no immediate signs of a significant capital raise or restructuring. Analysts have issued a mix of buy and hold recommendations, with no strong buy ratings, suggesting a cautious outlook on the company's near-term performance.

Subaru's net income CAGR of 45.0% over four years demonstrates exceptional long-term earnings growth momentum.

Analysts project 23.9% upside to the mean price target of 3,191 JPY, suggesting undervaluation.

Cash conversion of 8.9 is best-in-class compared to the 0.62 cohort median, highlighting efficient capital generation.

Revenue CAGR of 13.4% over four years reflects strong top-line expansion despite recent slight contraction.

High credit risk flags indicate significant potential financial instability or default probability for the company.

Operating income fell 9.3% year-over-year in FY2025, reflecting weakening core operational performance.

Medium liquidity risk flags suggest potential challenges in meeting short-term financial obligations.

Revenue ¥1.13T, −10,8% YoY; Operating income −124,7% YoY.

• ▍Revenue ¥1.13T, −10,8% YoY
• ▍Operating income −124,7% YoY
• ▍Net income −104,8% YoY
• ▍Free cash flow −150,4% YoY
• ▍Net margin -0.6%

Revenue ¥1.17T, −0,2% YoY; Operating income −79,9% YoY.

• ▍Revenue ¥1.17T, −0,2% YoY
• ▍Operating income −79,9% YoY
• ▍Net income −55,0% YoY
• ▍Free cash flow −34,6% YoY
• ▍Net margin 3.0%

Revenue ¥1.21T, +11,2% YoY; Operating income −16,2% YoY.

• ▍Revenue ¥1.21T, +11,2% YoY
• ▍Operating income −16,2% YoY
• ▍Net income −34,7% YoY
• ▍Free cash flow −140,3% YoY
• ▍Net margin 4.5%

Revenue ¥1.15T, −4,7% YoY; Operating income −62,8% YoY.

• ▍Revenue ¥1.15T, −4,7% YoY
• ▍Operating income −62,8% YoY
• ▍Net income −76,0% YoY
• ▍Free cash flow −92,5% YoY
• ▍Net margin 1.8%

Revenue ¥1.27T; Operating income ¥147.15B.

• ▍Revenue ¥1.27T
• ▍Operating income ¥147.15B
• ▍Net margin 12.2%

Revenue ¥1.17T; Operating income ¥130.87B.

• ▍Revenue ¥1.17T
• ▍Operating income ¥130.87B
• ▍Net margin 6.7%

Revenue ¥1.09T; Operating income ¥91.13B.

• ▍Revenue ¥1.09T
• ▍Operating income ¥91.13B
• ▍Net margin 7.7%

Revenue ¥1.21T; Operating income ¥97.20B.

• ▍Revenue ¥1.21T
• ▍Operating income ¥97.20B
• ▍Net margin 7.1%

Revenue ¥4.69T, −0,4% YoY; Operating income −9,3% YoY.

• ▍Revenue ¥4.69T, −0,4% YoY
• ▍Operating income −9,3% YoY
• ▍Net income −12,2% YoY
• ▍Free cash flow −4,5% YoY
• ▍Net margin 7.2%

Revenue ¥4.70T, +24,6% YoY; Operating income +76,2% YoY.

• ▍Revenue ¥4.70T, +24,6% YoY
• ▍Operating income +76,2% YoY
• ▍Net income +92,1% YoY
• ▍Free cash flow +22,7% YoY
• ▍Net margin 8.2%

Revenue ¥3.77T, +37,5% YoY; Operating income +180,3% YoY.

• ▍Revenue ¥3.77T, +37,5% YoY
• ▍Operating income +180,3% YoY
• ▍Net income +186,3% YoY
• ▍Free cash flow +196,9% YoY
• ▍Net margin 5.3%

Revenue ¥2.74T, −3,0% YoY; Operating income −11,5% YoY.

• ▍Revenue ¥2.74T, −3,0% YoY
• ▍Operating income −11,5% YoY
• ▍Net income −8,5% YoY
• ▍Free cash flow +36,1% YoY
• ▍Net margin 2.6%