Hikari Tsushin Inc

Hikari Tsushin Inc maintains a capital structure with a debt-to-equity ratio of 1.04, indicating a moderate reliance on debt financing. The company's liquidity position is characterized by a current ratio of 1.91, suggesting it has sufficient short-term assets to cover its short-term liabilities. However, the company's net cash position is negative after subtracting total debt, signaling potential liquidity constraints.

In terms of profitability, Hikari Tsushin Inc reports a return on equity (ROE) of 6.12% and a return on assets (ROA) of 2.33%. These figures are below the industry median for ROE and ROA in the Communications & Networking sector, indicating that the company is underperforming its peers in terms of capital efficiency and asset utilization.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification in the provided data. This lack of diversification may expose the company to higher operational and market risks, particularly in the event of regional economic downturns or regulatory changes.

Hikari Tsushin Inc's growth trajectory is modest, with no specific revenue growth rates provided in the data. Analysts have assigned a mean price target of 44,268.00 JPY, with a median of 43,740.00 JPY, and a mean recommendation of 2.67, indicating a generally cautious outlook. The company's capital expenditures are negative, suggesting a reduction in investment in new projects or infrastructure.

The company faces a medium liquidity risk and a low dilution risk, as per the risk assessment. The negative net cash position after subtracting total debt is a key liquidity flag, and the low dilution risk suggests that the company is not expected to issue additional shares in the near term.

Recent events and filings do not provide specific details on new product launches, strategic partnerships, or regulatory changes that could significantly impact the company's operations or financial performance. Analysts have not issued any strong buy recommendations, with two buy and four hold ratings, indicating a mixed but generally neutral sentiment.

Net income grew at a 21.1% CAGR over four years, demonstrating strong long-term profitability expansion.

Analysts project 23.3% upside to the mean price target of 44,268 JPY from the current market price.

Cash conversion ratio of 2.62 significantly exceeds the cohort median of 0.76, indicating efficient cash generation.

Net income declined 3.8% year-over-year in FY2025, signaling a recent reversal in earnings growth momentum.

The company carries a high credit risk flag, suggesting potential vulnerabilities in its financial stability.

Debt-to-equity ratio of 1.04 places the company in the bottom quartile of its peer cohort.

Return on invested capital of 1.24% remains low, indicating modest efficiency in deploying capital for returns.

Revenue ¥180.81B, +4,5% YoY; Operating income +6,0% YoY.

• ▍Revenue ¥180.81B, +4,5% YoY
• ▍Operating income +6,0% YoY
• ▍Net income −22,4% YoY
• ▍Free cash flow −22,1% YoY
• ▍Net margin 23.4%

Revenue ¥194.52B, +8,3% YoY; Operating income −0,4% YoY.

• ▍Revenue ¥194.52B, +8,3% YoY
• ▍Operating income −0,4% YoY
• ▍Net income +1 729,9% YoY
• ▍Free cash flow +636,5% YoY
• ▍Net margin 21.7%

Revenue ¥167.17B, +14,4% YoY; Operating income +1,1% YoY.

• ▍Revenue ¥167.17B, +14,4% YoY
• ▍Operating income +1,1% YoY
• ▍Net income −38,6% YoY
• ▍Free cash flow −39,6% YoY
• ▍Net margin 16.9%

Revenue ¥187.74B, +20,9% YoY; Operating income −7,9% YoY.

• ▍Revenue ¥187.74B, +20,9% YoY
• ▍Operating income −7,9% YoY
• ▍Net income −69,5% YoY
• ▍Free cash flow −73,8% YoY
• ▍Net margin 7.9%

Revenue ¥173.03B; Operating income ¥29.16B.

• ▍Revenue ¥173.03B
• ▍Operating income ¥29.16B
• ▍Net margin 31.5%

Revenue ¥179.63B; Operating income ¥30.20B.

• ▍Revenue ¥179.63B
• ▍Operating income ¥30.20B
• ▍Net margin 1.3%

Revenue ¥146.15B; Operating income ¥27.22B.

• ▍Revenue ¥146.15B
• ▍Operating income ¥27.22B
• ▍Net margin 31.4%

Revenue ¥155.26B; Operating income ¥20.04B.

• ▍Revenue ¥155.26B
• ▍Operating income ¥20.04B
• ▍Net margin 31.2%

Revenue ¥686.55B, +14,1% YoY; Operating income +15,0% YoY.

• ▍Revenue ¥686.55B, +14,1% YoY
• ▍Operating income +15,0% YoY
• ▍Net income −3,9% YoY
• ▍Free cash flow −9,6% YoY
• ▍Net margin 17.1%

Revenue ¥601.95B, −6,5% YoY; Operating income +13,2% YoY.

• ▍Revenue ¥601.95B, −6,5% YoY
• ▍Operating income +13,2% YoY
• ▍Net income +33,8% YoY
• ▍Free cash flow +36,5% YoY
• ▍Net margin 20.3%

Revenue ¥643.98B, +12,4% YoY; Operating income +4,0% YoY.

• ▍Revenue ¥643.98B, +12,4% YoY
• ▍Operating income +4,0% YoY
• ▍Net income +4,3% YoY
• ▍Free cash flow +1,0% YoY
• ▍Net margin 14.2%

Revenue ¥573.03B, +2,4% YoY; Operating income +21,2% YoY.

• ▍Revenue ¥573.03B, +2,4% YoY
• ▍Operating income +21,2% YoY
• ▍Net income +60,3% YoY
• ▍Free cash flow +70,1% YoY
• ▍Net margin 15.3%