KATO WORKS CO., LTD. (6390) AI Stock Analysis

KATO WORKS CO., LTD.

(TSE/TYO:6390)

Select Model

Rating:64Neutral

Price Target:JPY 1,447.00▲(18.32% Upside)

Action:reiterated

Date:08/17/26

The overall score reflects a balance between mixed financial quality and attractive valuation: execution and cash‑flow risks from volatile margins, rising leverage, and persistently negative operating and free cash flow are the primary constraint, while very low earnings multiples, a high dividend yield, and supportive technical momentum provide offsetting positives that lift the stock into a moderately attractive but risk‑aware range.

Positive Factors

Manageable Balance SheetAlthough leverage remains meaningful for a cyclical machinery company, debt-to-equity improved from earlier periods and equity is still sizeable. This provides some financial resilience and reduces immediate balance-sheet distress risk.

Negative Factors

Persistent Negative Cash FlowSustained negative operating and free cash flow weakens internally funded growth and may increase reliance on debt or other balance-sheet funding. The multi-year pattern indicates a structural cash-conversion risk rather than a single-period issue.

KATO WORKS CO., LTD. (6390) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 13.69B
Dividend Yield: 5.72%
Average Volume (3M): 51.12K
Price to Earnings (P/E): 2.7
Beta (1Y): 0.90
Revenue Growth: -1.12%
EPS Growth: ―
Country: Japan
Employees: 932
Sector: General
Sector Strength: 55
Industry: Industrial - Machinery

KATO WORKS CO., LTD. Business Overview & Revenue Model

Company Description

Kato Works Co.,Ltd. is a worldwide enterprise specializing in the production and distribution of heavy machinery for both the lifting and construction industries. Its diverse portfolio encompasses a range of mobile cranes, including models for rough...

How the Company Makes Money

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KATO WORKS CO., LTD. Financial Statement Overview

Summary

Overall financial health is middle tier: revenue is broadly flat with only modest recent growth and highly volatile, deteriorating profitability, while leverage has risen to roughly match equity and operating plus free cash flow have been negative for several years, indicating clear execution and cash‑flow risk despite a still‑solid equity base.

Income Statement

48Neutral

Balance Sheet

55Neutral

Cash Flow

32Negative

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	53.93B	56.34B	52.93B	57.50B	57.53B	63.55B
Gross Profit	6.15B	5.83B	9.95B	11.96B	10.14B	7.74B
EBITDA	195.00M	-188.00M	2.43B	3.27B	2.88B	-5.26B
Net Income	5.02B	4.53B	-6.03B	4.24B	2.40B	-9.58B
Balance Sheet
Total Assets	90.84B	92.36B	103.15B	105.73B	98.80B	102.64B
Cash, Cash Equivalents and Short-Term Investments	10.19B	11.07B	14.76B	22.57B	19.98B	18.67B
Total Debt	39.19B	40.21B	43.81B	36.04B	33.84B	38.98B
Total Liabilities	48.89B	49.89B	58.54B	54.18B	51.89B	58.40B
Stockholders Equity	41.95B	42.47B	44.60B	50.41B	45.69B	43.14B
Cash Flow
Free Cash Flow	0	-796.00M	-14.13B	-1.18B	6.37B	8.36B
Operating Cash Flow	0	-260.00M	-13.32B	-696.00M	6.47B	9.55B
Investing Cash Flow	0	2.02B	-930.00M	1.63B	1.37B	496.00M
Financing Cash Flow	0	-5.87B	6.64B	1.40B	-6.61B	-6.64B

KATO WORKS CO., LTD. Technical Analysis

Technical Analysis SentimentNegative

Last Price1223.00

Price Trends

50DMA1284.61Negative

100DMA1267.29Negative

200DMA1323.78Negative

Market Momentum

MACD-17.91Positive

RSI33.60Neutral

STOCH32.98Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6390, the sentiment is Negative. The current price of 1223.00 is below the 20-day moving average (MA) of 1252.75, below the 50-day MA of 1284.61, and below the 200-day MA of 1323.78, indicating a bearish trend. The MACD of -17.91 indicates Positive momentum. The RSI at 33.60 is Neutral, neither overbought nor oversold. The STOCH value of 32.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6390.

KATO WORKS CO., LTD. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:6390 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:6432	78Outperform	JPY 364.32B	12.03	―	3.02%	11.87%	12.20%
JP:6301	70Outperform	JPY 5.42T	14.14	―	3.07%	9.23%	-2.66%
JP:6390	64Neutral	JPY 14.33B	2.69	―	5.72%	-1.12%	―
JP:6305	62Neutral	JPY 1.10T	12.88	9.48%	3.67%	6.61%	-2.27%
JP:6326	62Neutral	JPY 2.97T	11.07	10.13%	1.95%	12.54%	57.90%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

* General Sector Average

Performance Comparison

JP:6390 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:6390	KATO WORKS CO., LTD.	1223.00	-96.71	-7.33%
JP:6305	Hitachi Construction Machinery Co	5175.00	313.03	6.44%
JP:6326	Kubota Corporation	2611.00	651.72	33.26%
JP:6301	Komatsu Ltd.	6182.00	1156.77	23.02%
JP:6432	Takeuchi Mfg.Co., Ltd.	7640.00	1533.02	25.10%

KATO WORKS CO., LTD. Corporate Events

Kato Works Narrows Quarterly Loss but Keeps FY2027 Dividend Forecast Unchanged

Aug 7, 2026

Kato Works reported consolidated net sales of ¥10.0 billion for the three months ended June 30, 2026, down 19.4% year on year, with an operating loss of ¥79 million and a net loss attributable to owners of the parent of ¥17 million, an...

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 17, 2026

KATO WORKS CO., LTD. AI Stock Analysis