Obara Group Incorporated (6877) AI Stock Analysis

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Obara Group Incorporated

(TSE/TYO:6877)

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Rating:73Outperform

Price Target:JPY 7,560.00▲(14.37% Upside)

Action:reiterated

Date:09/26/26

Obara Group presents a solid investment profile anchored by an attractive valuation, a highly stable low-leverage balance sheet, and strong technical momentum with the stock trading consistently above all major moving averages. However, the score is notably restrained by concerning underlying financial trends, primarily a sharp deterioration in cash flow conversion and slowing top-line revenue growth, which require careful investor monitoring.

Positive Factors

Conservative LeverageVery low leverage reduces financial risk and preserves flexibility during industry or demand fluctuations. A strong capital structure also gives Obara greater capacity to fund equipment development, support customers, and maintain shareholder returns without relying heavily on external financing.

Negative Factors

Weaker Free Cash Flow TrendDeclining free cash flow growth and weaker conversion of net income into free cash flow reduce the quality of reported earnings. Persistent weakness could constrain investment capacity, liquidity available for shareholders, and the company’s ability to respond quickly to changing customer demand.

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

Market Cap: JPY 95.56B
Dividend Yield: 2.27%
Average Volume (3M): 58.35K
Price to Earnings (P/E): 12.3
Beta (1Y): 0.75
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 performance characterized by an exceptionally stable, low-risk balance sheet with a 0.11 Debt-to-Equity ratio and consistent profitability. However, this is significantly offset by weak free cash flow generation (-68.4% growth) and decelerating revenue growth (1.6%).

Income Statement

72Positive

Balance Sheet

88Very Positive

Cash Flow

43Neutral

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 Price6610.00

Price Trends

50DMA6137.21Positive

100DMA5997.27Positive

200DMA5628.04Positive

Market Momentum

MACD94.04Positive

RSI51.82Neutral

STOCH60.37Neutral

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 6610.00 is below the 20-day moving average (MA) of 6735.50, above the 50-day MA of 6137.21, and above the 200-day MA of 5628.04, indicating a neutral trend. The MACD of 94.04 indicates Positive momentum. The RSI at 51.82 is Neutral, neither overbought nor oversold. The STOCH value of 60.37 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:6136	77Outperform	JPY 328.72B	11.25	13.79%	2.79%	20.29%	99.83%
JP:6877	73Outperform	JPY 108.47B	12.29	―	2.27%	17.28%	26.43%
JP:6101	70Outperform	JPY 183.00B	9.65	―	2.77%	27.72%	68.33%
JP:6278	68Neutral	JPY 229.32B	28.91	―	1.22%	46.79%	74.98%
JP:6474	58Neutral	JPY 126.53B	14.08	4.67%	1.89%	8.26%	102.64%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:6141	52Neutral	JPY 415.52B	38.32	4.06%	4.03%	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	6610.00	2818.46	74.34%
JP:6141	DMG MORI CO	2604.50	-29.18	-1.11%
JP:6136	OSG Corp	3552.00	1414.35	66.16%
JP:6474	Nachi-Fujikoshi Corp.	5300.00	1462.40	38.11%
JP:6101	Tsugami Corp.	3970.00	1302.75	48.84%
JP:6278	Union Tool Co.	11920.00	4395.34	58.41%

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 increased to ¥42...

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