Ajinomoto Co (AJINY) AI Stock Analysis

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Ajinomoto Co

(OTC:AJINY)

78Outperform

Ajinomoto Co shows strong financial performance with robust revenue growth and cash flow, albeit with some pressure on operational efficiency. The stock's technical indicators suggest moderate strength, though the high P/E ratio indicates potential overvaluation. Earnings results were positive but tempered by challenges in certain segments and high interest rates. Overall, the stock is well-supported by its financials and growth prospects, despite some valuation and market challenges.

Ajinomoto Co (AJINY) vs. S&P 500 (SPY)

Market Cap

$21.00B

Dividend Yield0.82%

Average Volume (3M)20.55K

Price to Earnings (P/E)35.0

Beta (1Y)0.55

Revenue Growth0.99%

EPS Growth-7.28%

CountryUS

Employees34,862

SectorConsumer Defensive

Sector Strength85

IndustryPackaged Foods

Share Statistics

EPS (TTM)-0.08

Shares Outstanding1,005,637,630

10 Day Avg. Volume0

30 Day Avg. Volume20,549

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Ajinomoto Co Business Overview & Revenue Model

Company DescriptionAjinomoto Co., Inc. engages in the seasonings and foods, frozen foods, and healthcare and other businesses in Japan and internationally. Its Seasonings and Foods segment offers sauces and seasonings products under the AJI-NO-MOTO, HON-DASHI, Cook Do, Ajinomoto KK Consommé, Pure Select Mayonnaise, Ros Dee, Masako, Aji-ngon, Sazón, Sajiku, and CRISPY FRY names; and solutions and ingredients to consumer foods and food service industries. This segment also provides instant noodles under the Knorr Cup Soup, and YumYum names; coffee under the Birdy and Blendy brands; powdered drink under the Birdy 3in1 name; MAXIM products; Chyotto Zeitakuna Kohiten products; and gift sets and office supplies comprising coffee vending machines, tea server, etc. The Frozen Foods segment offers Chinese dumplings, cooked rice, noodles, desserts, shumai, processed chicken, and other products. The Healthcare and Other segment provides amino acids to various industries, such as pharmaceuticals, foods, and cosmetics; sports nutrition products; personal care ingredients; and sterile products, as well as engages in the provision of contract manufacturing services for pharmaceutical intermediates and active ingredients. This segment also offers Ajinomoto Build-up Film, an interlayer insulating material for semiconductor packages. Ajinomoto Co., Inc. was founded in 1909 and is headquartered in Tokyo, Japan.

How the Company Makes MoneyAjinomoto Co. generates revenue through a diversified portfolio of products and services. Its core revenue streams include the sale of seasonings, such as MSG and flavor enhancers, processed foods, such as instant noodles and frozen foods, as well as amino acids for both food and pharmaceutical uses. The company also engages in the production and sale of specialty chemicals, which are used in various industries including cosmetics and animal nutrition. Ajinomoto has established key partnerships and collaborations to further its research and development efforts and expand its market reach. The company's earnings are significantly influenced by its ability to innovate and meet consumer demands across different cultures and regions, leveraging its strong brand reputation and extensive distribution network.

Ajinomoto Co Financial Statement Overview

Summary

Ajinomoto Co's financial health is robust, driven by consistent revenue growth and strong cash flow generation. While the company maintains a solid balance sheet with prudent leverage, there is scope to enhance operational efficiency reflected in EBIT margins. Overall, the company is well-positioned financially with a stable growth trajectory and effective cash management.

Income Statement

Very Positive

Ajinomoto Co has demonstrated strong revenue growth with consistent increases over the past years and a healthy Gross Profit Margin of 35.54% for 2024. The Net Profit Margin is also robust at 6.05%. However, there is a slight decline in EBIT Margin from 10.96% to 10.19%, indicating some pressure on operational efficiency.

Balance Sheet

Positive

The company's balance sheet reflects solid equity with an increasing Stockholders' Equity base. The Debt-to-Equity Ratio stands at 0.60, indicating a balanced approach to leverage. Return on Equity is healthy at 10.70%, although the Equity Ratio at 45.91% suggests room for improvement in asset efficiency.

Cash Flow

Very Positive

Ajinomoto Co exhibits strong cash flow performance with significant Free Cash Flow growth. The Operating Cash Flow to Net Income Ratio of 1.93 demonstrates effective conversion of earnings into cash. The Free Cash Flow to Net Income Ratio is also substantial at 1.10, showcasing the company's ability to generate cash beyond operational needs.

Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
1.44T	1.36T	1.15T	1.07T	1.10T
	Gross Profit
511.45B	470.39B	425.90B	406.22B	403.87B
	EBIT
146.68B	148.93B	124.57B	101.12B	48.77B
	EBITDA
219.41B	202.42B	188.15B	168.89B	157.50B
	Net Income Common Stockholders
87.12B	94.06B	75.72B	59.42B	18.84B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
194.19B	145.09B	169.26B	193.69B	150.65B
	Total Assets
1.77T	1.51T	1.46T	1.43T	1.35T
	Total Debt
491.68B	288.56B	313.91B	350.42B	356.91B
	Net Debt
320.14B	155.79B	162.45B	168.81B	215.21B
	Total Liabilities
890.43B	688.77B	717.32B	763.44B	761.55B
	Stockholders Equity
814.69B	768.68B	686.91B	620.26B	538.98B
Cash Flow		Free Cash Flow
96.05B	44.59B	64.86B	79.61B	32.81B
	Operating Cash Flow
168.07B	117.64B	145.58B	165.65B	114.86B
	Investing Cash Flow
-132.43B	-30.09B	-61.57B	-66.25B	-66.65B
	Financing Cash Flow
-6.75B	-111.06B	-123.06B	-60.39B	-52.31B

Ajinomoto Co Technical Analysis

Technical Analysis Sentiment

Positive

Last Price20.79

Price Trends

50DMA

20.28

Positive

100DMA

20.32

Positive

200DMA

19.86

Positive

Market Momentum

MACD

0.21

Negative

RSI

56.05

Neutral

STOCH

88.30

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AJINY, the sentiment is Positive. The current price of 20.79 is above the 20-day moving average (MA) of 20.49, above the 50-day MA of 20.28, and above the 200-day MA of 19.86, indicating a bullish trend. The MACD of 0.21 indicates Negative momentum. The RSI at 56.05 is Neutral, neither overbought nor oversold. The STOCH value of 88.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AJINY.

Ajinomoto Co Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AJINY	78 Outperform	$21.00B	34.96	11.13%	0.82%	0.99%	-7.28%
GIS	70 Outperform	$29.88B	12.09	27.37%	4.41%	-2.62%	4.27%
HRL	69 Neutral	$16.03B	21.20	9.54%	3.93%	-1.84%	-5.14%
CAG	68 Neutral	$11.15B	34.40	3.67%	6.09%	-3.15%	-65.38%
KHC	68 Neutral	$33.61B	12.96	5.36%	5.67%	-4.25%	-4.04%
MKC	67 Neutral	$20.04B	25.85	14.73%	2.32%	0.40%	10.89%
Sector *	64 Neutral	$8.85B	14.84	5.05%	174.27%	3.54%	3.75%

* Consumer Defensive Sector Average

Performance Comparison

AJINY

Ajinomoto Co

20.79

2.38

12.93%

CAG

Conagra Brands

23.22

-6.01

-20.56%

GIS

General Mills

54.71

-12.91

-19.09%

HRL

Hormel Foods

29.39

-4.69

-13.76%

MKC

McCormick & Company

76.22

2.59

3.52%

KHC

Kraft Heinz

28.49

-5.53

-16.26%

Ajinomoto Co Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q3-2024)

% Change Since: -0.86%|

Next Earnings Date:Aug 01, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of record-breaking profits and growth in key areas such as seasonings, foods, and frozen foods, contrasted with declines in health care segments and challenges in the U.S. market and biopharma services. Despite several positive highlights, the challenges and impacts from high interest rates and acquisition costs have created a cautious outlook.

Q3-2024 Updates

Positive Updates

Record-Breaking Sales and Business Income

Q3 sales and business income reached record highs for both the 9-month period and the quarter, with sales at JPY 1.676 billion, 104% of the previous year's level.

Growth in Seasonings and Foods

Significant increase in profit from unit price growth in the seasonings and foods and frozen food segment, offsetting costs.

Successful Launch of New Products

New product initiatives like the Cooked Tofu Kiwami premium Mala Mapo Tofu have been successful, attracting new customer bases.

Expansion in Data-Driven Marketing

Shift from traditional mass communication to personalized interactive communication strategy, generating positive results.

Frozen Foods Segment Achieving Targets

Frozen foods business achieved more than JPY 10 billion business profit target within the 9-month period, with ROIC at 5%.

Negative Updates

Decline in Health Care and Other Segments

Revenue and profit decreased in health care and other segments, although the degree of profit decline is contracting.

Challenges in U.S. Market

Profit decline in U.S. due to multiple factors including inventory visibility issues and reduced orders from start-ups.

Impact of High Interest Rates

High interest rates have led to reduced orders from biopharmaceutical companies, impacting revenue and profit.

Acquisition Costs of Forge Biologics

Expenses related to the acquisition of Forge Biologics recorded in Q3, with expected further impact in Q4.

Underperformance in Althea

Althea recorded sales and profit decreases due to a decline in orders from its customers.

Company Guidance

During the Q3 2024 earnings call for 2802.T, executives reported record-high sales and business profits for the nine-month period, driven primarily by increased sales and improved gross profit ratios in the seasonings, foods, and frozen foods segments. Sales figures reached JPY 1.676 billion, representing 104% of the previous year's level, while business profit stood at JPY 124.4 billion, an increase of 104.4% compared to the prior year. The company also highlighted a slight decline in the healthcare segment but noted expectations for recovery in electronic materials starting Q4. Despite acquisition-related expenses for Forge Biologics, the full-year forecast for fiscal 2023 remains unchanged, with continued efforts to achieve a company-wide business profit target of JPY 150 billion by fiscal 2024. Looking forward, executives emphasized strategic investments and operational efficiency improvements to support sustainable growth and achieve their 2030 roadmap objectives.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.