NAFCO Co., Ltd. (2790) AI Stock Analysis

NAFCO Co., Ltd.

(TSE/TYO:2790)

Select Model

Rating:39Underperform

Price Target:JPY 2,068.00▲(4.82% Upside)

Action:downgraded

Date:08/11/26

The score is held down mainly by extremely weak financial performance and a very stretched valuation. Technicals are only mildly supportive and do not offset the sharp decline in profitability and cash generation.

Positive Factors

Conservative balance sheetLow leverage and a sizable equity base provide durable financial resilience: they support working capital, absorb shocks from cyclical retail demand, and preserve capacity to fund restructuring or targeted investments without needing immediate external financing.

Negative Factors

Multi-year revenue declineSustained top-line shrinkage erodes scale economics and reduces leverage over fixed costs. Prolonged revenue contraction limits reinvestment ability, weakens supplier negotiation leverage, and makes margin recovery and profitable growth harder absent structural business changes.

NAFCO Co., Ltd. (2790) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 56.35B
Dividend Yield: 2.94%
Average Volume (3M): 8,130
Price to Earnings (P/E): 134.0
Beta (1Y): 0.54
Revenue Growth: -2.53%
EPS Growth: ―
Country: Japan
Employees: 1,227
Sector: Consumer Cyclical
Sector Strength: 61
Industry: Home Improvement

NAFCO Co., Ltd. Business Overview & Revenue Model

Company Description

NAFCO Co., Ltd. is a Japanese retailer managing a network of stores specializing in home goods and furniture. Its diverse retail formats include dedicated furniture and home fashion outlets, which stock items for various rooms like kitchens, dining a...

How the Company Makes Money

NAFCO primarily makes money through retail sales of merchandise to consumers at its physical stores. Its core revenue stream is the sale of home improvement and DIY-related products (e.g., building/repair materials, hardware, tools), supported by com...

NAFCO Co., Ltd. Financial Statement Overview

Summary

Severe operating deterioration dominates the picture: revenue has declined over five years, net profit margin has collapsed, EBIT margin has fallen sharply, and net income dropped 94% year over year. The balance sheet is still manageable, but shrinking equity and very weak ROE do not offset the much more serious profitability and cash flow weakness.

Income Statement

28Negative

Balance Sheet

52Neutral

Cash Flow

19Very Negative

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	175.66B	175.27B	181.85B	192.45B	202.64B	206.88B
Gross Profit	55.06B	60.17B	55.74B	59.47B	64.06B	66.15B
EBITDA	7.42B	7.17B	7.10B	10.99B	15.04B	18.43B
Net Income	362.00M	223.00M	183.00M	3.11B	5.64B	7.96B
Balance Sheet
Total Assets	225.92B	215.96B	226.50B	233.54B	239.70B	234.34B
Cash, Cash Equivalents and Short-Term Investments	20.55B	11.52B	18.50B	33.00B	36.12B	34.11B
Total Debt	31.26B	23.05B	27.65B	26.53B	26.40B	26.00B
Total Liabilities	72.85B	63.11B	72.54B	74.18B	77.89B	76.58B
Stockholders Equity	153.06B	152.84B	153.96B	159.36B	161.81B	157.76B
Cash Flow
Free Cash Flow	0	-2.49B	-6.34B	4.00B	6.26B	-2.43B
Operating Cash Flow	0	3.06B	-709.00M	9.17B	9.66B	1.18B
Investing Cash Flow	0	-5.84B	-5.95B	-4.93B	-3.43B	-3.50B
Financing Cash Flow	0	-3.93B	-7.84B	-7.36B	-4.22B	-4.56B

NAFCO Co., Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price1973.00

Price Trends

50DMA2049.73Negative

100DMA2095.46Negative

200DMA2125.70Negative

Market Momentum

MACD-27.05Negative

RSI41.36Neutral

STOCH33.53Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2790, the sentiment is Negative. The current price of 1973.00 is below the 20-day moving average (MA) of 1985.60, below the 50-day MA of 2049.73, and below the 200-day MA of 2125.70, indicating a bearish trend. The MACD of -27.05 indicates Negative momentum. The RSI at 41.36 is Neutral, neither overbought nor oversold. The STOCH value of 33.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:2790.

NAFCO Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:2790 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:3191	76Outperform	JPY 139.00B	15.59	―	3.61%	3.06%	10.38%
JP:7516	68Neutral	JPY 146.43B	9.48	―	2.90%	6.28%	2.40%
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
JP:8218	60Neutral	JPY 192.13B	11.74	―	1.46%	2.97%	8.67%
JP:3050	59Neutral	JPY 221.04B	13.28	―	2.98%	5.43%	-7.20%
JP:9903	45Neutral	JPY 5.98B	19.62	―	3.49%	-1.59%	-36.98%
JP:2790	39Underperform	JPY 56.35B	134.03	0.24%	2.94%	-2.53%	―

* Consumer Cyclical Sector Average

Performance Comparison

JP:2790 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:2790	NAFCO Co., Ltd.	1973.00	25.69	1.32%
JP:3050	DCM Holdings Co., Ltd.	1610.00	220.64	15.88%
JP:3191	Joyful Honda Co. Ltd.	2328.00	365.34	18.61%
JP:7516	Kohnan Shoji Co., Ltd.	4660.00	1038.56	28.68%
JP:8218	KOMERI CO., LTD.	3910.00	749.04	23.70%
JP:9903	Kanseki Co., Ltd.	860.00	27.28	3.28%

NAFCO Co., Ltd. Corporate Events

NAFCO Posts Modest Revenue Growth but Higher Profit Amid Margin Pressure

Aug 7, 2026

NAFCO Co., Ltd. reported operating revenues of ¥47.45 billion for the quarter ended June 2026, a slight 0.8% increase year on year, while operating and ordinary profits declined 6.7% and 9.6% respectively, indicating some pressure on margins. No...

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.

Date of analysis: Aug 11, 2026

NAFCO Co., Ltd. AI Stock Analysis