Obara Group Incorporated (6877) AI Stock Analysis

Obara Group Incorporated

(TSE/TYO:6877)

Select Model

Rating:56Neutral

Price Target:JPY 7,025.00▲(3.61% Upside)

Action:reiterated

Date:09/26/26

The overall score is constrained by a significant cash flow crisis, where free cash flow plunged 68% and conversion is alarmingly low, despite a solid, low-debt balance sheet. Slowing revenue and margin contraction further weigh on the outlook. Positively, the stock's low P/E and decent dividend yield offer some valuation support, while technicals show a mixed picture with the price recovering from lows but lacking strong momentum.

Positive Factors

Industrial Automation PositionObara Group serves production processes where precision joining and automation are important to customers’ manufacturing operations. Its specialized equipment portfolio and exposure to automotive body production can support durable relevance as manufacturers continue investing in automated production capacity.

Negative Factors

Declining Free Cash Flow GrowthWeaker free cash flow growth and declining conversion of earnings into cash could constrain internally funded investment and reduce liquidity flexibility. If sustained, this pattern may make reported profitability less dependable for financing expansion, dividends, or other shareholder returns.

Obara Group Incorporated (6877) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 97.73B
Dividend Yield: 2.21%
Average Volume (3M): 58.84K
Price to Earnings (P/E): 12.6
Beta (1Y): 0.68
Revenue Growth: 17.28%
EPS Growth: 26.43%
Country: Japan
Employees: 1,926
Sector: General
Sector Strength: 55
Industry: Industrial - Machinery

Obara Group Incorporated Business Overview & Revenue Model

Company Description

Obara Group Incorporated is a global manufacturer and supplier of industrial equipment and associated consumables. The company offers a diverse range of products, including resistance welding systems primarily used for joining metal sheets in automot...

Obara Group Incorporated Financial Statement Overview

Summary

Mixed financial health: a strong balance sheet (Score 75) with low debt is offset by severe cash flow deterioration (Score 25) and declining profitability. Slowing revenue growth and a collapsing free cash flow conversion rate signal significant operational stress.

Income Statement

55Neutral

Balance Sheet

75Positive

Cash Flow

25Negative

Financial statement breakdown
Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	71.21B	61.68B	56.39B	55.21B	50.28B	45.48B
Gross Profit	23.36B	19.90B	17.63B	17.29B	16.51B	14.41B
EBITDA	13.93B	12.25B	11.32B	11.65B	11.27B	10.50B
Net Income	8.07B	6.76B	6.72B	7.21B	6.20B	5.99B
Balance Sheet
Total Assets	107.96B	103.83B	100.81B	94.62B	92.35B	78.41B
Cash, Cash Equivalents and Short-Term Investments	26.02B	26.18B	42.41B	39.29B	36.87B	26.70B
Total Debt	7.88B	8.00B	8.11B	2.11B	6.77B	6.88B
Total Liabilities	30.82B	29.15B	27.00B	20.51B	28.69B	24.24B
Stockholders Equity	76.99B	74.53B	73.73B	74.04B	63.59B	54.10B
Cash Flow
Free Cash Flow	1.62B	1.62B	5.25B	4.45B	5.04B	8.35B
Operating Cash Flow	5.11B	5.11B	8.36B	5.30B	6.66B	9.88B
Investing Cash Flow	-18.52B	-18.52B	-3.72B	5.13B	68.00M	-546.00M
Financing Cash Flow	-6.10B	-6.10B	-1.81B	-2.60B	-3.03B	-5.89B

Obara Group Incorporated Technical Analysis

Technical Analysis SentimentPositive

Last Price6780.00

Price Trends

50DMA6016.92Positive

100DMA5941.46Positive

200DMA5530.51Positive

Market Momentum

MACD243.96Positive

RSI57.84Neutral

STOCH54.74Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6877, the sentiment is Positive. The current price of 6780.00 is above the 20-day moving average (MA) of 6754.50, above the 50-day MA of 6016.92, and above the 200-day MA of 5530.51, indicating a bullish trend. The MACD of 243.96 indicates Positive momentum. The RSI at 57.84 is Neutral, neither overbought nor oversold. The STOCH value of 54.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6877.

Obara Group Incorporated Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:6877 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:6101	72Outperform	JPY 195.24B	10.52	―	2.54%	23.70%	56.28%
JP:6136	70Outperform	JPY 324.83B	11.19	13.79%	2.80%	20.29%	99.83%
JP:6278	65Neutral	JPY 239.25B	24.05	―	1.17%	39.69%	58.96%
JP:6474	64Neutral	JPY 127.48B	14.03	4.67%	1.87%	8.26%	102.64%
JP:6877	56Neutral	JPY 109.27B	12.61	―	2.21%	17.28%	26.43%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:6141	52Neutral	JPY 427.08B	40.24	4.06%	3.84%	19.84%	-58.57%

* General Sector Average

Performance Comparison

JP:6877 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:6877	Obara Group Incorporated	6780.00	2725.63	67.23%
JP:6141	DMG MORI CO	2734.50	176.61	6.90%
JP:6136	OSG Corp	3534.00	1392.98	65.06%
JP:6474	Nachi-Fujikoshi Corp.	5280.00	1383.89	35.52%
JP:6101	Tsugami Corp.	4330.00	1664.70	62.46%
JP:6278	Union Tool Co.	12420.00	4143.86	50.07%

Obara Group Incorporated Corporate Events

Obara Group Posts Double-Digit Profit Growth and Confirms FY2026 Outlook

Aug 5, 2026

Obara Group Incorporated reported strong third-quarter results for the fiscal year ending September 30, 2026, with net sales rising 21.1% year on year to ¥54.7 billion and net income climbing 26.3% to ¥6.3 billion. Earnings per share increa...

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: Sep 26, 2026

Obara Group Incorporated AI Stock Analysis