Original Engineering Consultants Co., Ltd. (4642) AI Stock Analysis

Original Engineering Consultants Co., Ltd.

(TSE/TYO:4642)

Select Model

Rating:71Outperform

Price Target:JPY 1,691.00▲(20.79% Upside)

Action:upgraded

Date:02/18/26

The overall score of 71 reflects a company with solid financials, including strong revenue growth and a healthy balance sheet, offset by margin pressure and neutral technical indicators. The fair valuation and decent dividend yield provide support, while the stock's position below long-term moving averages suggests some caution.

Positive Factors

Margin expansionSustained margin improvement and stable gross margins indicate improving operational efficiency and pricing power in core consulting services. Higher margins support internal funding for projects, buffer downturns, and are a durable indicator of competitive service economics if maintained through steady project mix and cost control.

Negative Factors

Sharp 2025 debt increaseThe sudden increase in debt materially raises leverage relative to the company’s prior conservative profile, reducing financial flexibility. Higher interest and principal obligations can constrain investment, elevate covenant and refinancing risk, and make the firm more sensitive to demand or margin shocks over the next several quarters.

Original Engineering Consultants Co., Ltd. (4642) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 7.61B
Dividend Yield: 2.47%
Average Volume (3M): 2,200
Price to Earnings (P/E): 13.9
Beta (1Y): 0.42
Revenue Growth: 23.05%
EPS Growth: 8.64%
Country: Japan
Employees: 498
Sector: General
Sector Strength: 55
Industry: Engineering & Construction

Original Engineering Consultants Co., Ltd. Business Overview & Revenue Model

Company Description

Founded in Tokyo, Japan, in 1962, Original Engineering Consultants Co., Ltd. delivers specialized engineering consultancy for a broad range of environmental and infrastructure initiatives. The firm's comprehensive offerings span from initial pre-feas...

How the Company Makes Money

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Original Engineering Consultants Co., Ltd. Financial Statement Overview

Summary

Revenue surged 81.9% driven by acquisition, but net income declined 16.8% and margins compressed. Balance sheet remains strong with low debt (D/E 0.23). Cash flow improved but historically volatile. Overall solid financial health.

Income Statement

72Positive

Balance Sheet

88Very Positive

Cash Flow

70Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.60B	8.52B	7.12B	6.63B	6.49B	6.21B
Gross Profit	3.16B	2.85B	2.37B	2.18B	2.10B	1.90B
EBITDA	1.38B	1.17B	992.22M	914.52M	795.46M	741.39M
Net Income	612.25M	541.34M	650.18M	477.35M	415.61M	376.06M
Balance Sheet
Total Assets	13.36B	11.96B	8.35B	7.93B	7.60B	7.11B
Cash, Cash Equivalents and Short-Term Investments	6.99B	3.99B	3.85B	3.98B	3.74B	3.55B
Total Debt	1.72B	1.84B	29.66M	58.23M	84.29M	111.34M
Total Liabilities	4.84B	4.06B	1.29B	1.44B	1.44B	1.20B
Stockholders Equity	8.52B	7.90B	7.06B	6.49B	6.15B	5.91B
Cash Flow
Free Cash Flow	0	486.31M	193.69M	388.94M	668.23M	266.88M
Operating Cash Flow	0	604.47M	241.63M	399.40M	691.72M	282.42M
Investing Cash Flow	0	-1.50B	-152.23M	63.97M	-277.00M	120.90M
Financing Cash Flow	0	1.31B	-222.69M	-224.58M	-225.29M	-227.52M

Original Engineering Consultants Co., Ltd. Technical Analysis

Technical Analysis SentimentPositive

Last Price1400.00

Price Trends

50DMA1404.56Positive

100DMA1414.54Positive

200DMA1463.48Negative

Market Momentum

MACD1.23Negative

RSI60.99Neutral

STOCH94.12Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4642, the sentiment is Positive. The current price of 1400.00 is above the 20-day moving average (MA) of 1397.25, below the 50-day MA of 1404.56, and below the 200-day MA of 1463.48, indicating a neutral trend. The MACD of 1.23 indicates Negative momentum. The RSI at 60.99 is Neutral, neither overbought nor oversold. The STOCH value of 94.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4642.

Original Engineering Consultants Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:4642 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:9768	78Outperform	JPY 26.13B	10.49	―	3.22%	3.65%	19.76%
JP:1828	77Outperform	JPY 24.69B	6.66	―	4.33%	6.41%	38.90%
JP:4642	71Outperform	JPY 7.72B	13.93	―	2.47%	23.05%	8.64%
JP:4673	70Neutral	JPY 3.39B	4.84	―	3.69%	-10.48%	-7.65%
JP:1914	68Neutral	JPY 18.67B	7.96	―	3.41%	-7.50%	122.97%
JP:9621	68Neutral	JPY 101.73B	14.97	―	2.09%	7.70%	18.20%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

* General Sector Average

Performance Comparison

JP:4642 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:4642	Original Engineering Consultants Co., Ltd.	1419.00	-373.61	-20.84%
JP:1828	Tanabe Engineering Corporation	2307.00	29.12	1.28%
JP:1914	Japan Foundation Engineering Co., Ltd.	879.00	274.29	45.36%
JP:4673	Kawasaki Geological Engineering Co., Ltd.	3925.00	-633.77	-13.90%
JP:9621	CTI Engineering Co., Ltd.	3595.00	861.84	31.53%
JP:9768	Idea Consultants,inc.	3660.00	170.62	4.89%

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 04, 2026

Original Engineering Consultants Co., Ltd. AI Stock Analysis