Nippon Avionics Co., Ltd. (6946) AI Stock Analysis

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Nippon Avionics Co., Ltd.

(TSE/TYO:6946)

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Rating:58Neutral

Price Target:JPY 5,710.00▲(1.96% Upside)

Action:reiterated

Date:11/07/26

The score is held back primarily by weak cash-flow performance (negative operating and free cash flow) alongside rising leverage, despite strong recent profit growth and margin expansion. Technicals are also unfavorable, with the stock trading well below major moving averages and negative momentum. Valuation is a partial offset with a moderate P/E, but the dividend yield is minimal.

Positive Factors

Strong Revenue and Earnings GrowthThe sharp increase in revenue and near-doubling of net income indicate stronger demand and improved operating execution. If the company can sustain this higher level of activity, the expanded earnings base should support continued investment and reinforce its position in defense and industrial electronics.

Negative Factors

Negative and Volatile Cash FlowNegative operating and free cash flow show that strong reported earnings are not currently converting reliably into cash. The repeated volatility increases the risk that working-capital needs or investment spending will require external funding, limiting financial flexibility during project execution.

Nippon Avionics Co., Ltd. (6946) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 92.01B
Dividend Yield: 0.18%
Average Volume (3M): 167.43K
Price to Earnings (P/E): 16.4
Beta (1Y): 2.01
Revenue Growth: 45.20%
EPS Growth: 107.87%
Country: Japan
Employees: 763
Sector: Industrials
Sector Strength: 63
Industry: Electrical Equipment & Parts

Nippon Avionics Co., Ltd. Business Overview & Revenue Model

Company Description

Nippon Avionics Co., Ltd., headquartered in Yokohama, Japan, operates as a Japanese manufacturer and vendor, primarily focusing on micro joining equipment within its domestic market. The company offers a comprehensive range of products, including var...

How the Company Makes Money

Nippon Avionics makes money primarily by selling electronic products, subsystems, and system-level solutions, and by providing associated engineering and lifecycle services. Key revenue streams typically include (1) product and system sales: revenue...

Nippon Avionics Co., Ltd. Financial Statement Overview

Summary

Income statement strength is clear (revenue +38.5% YoY with expanded margins and higher ROE), but cash-flow quality is a major concern. Operating cash flow and free cash flow turned negative in 2026, and cash generation has been volatile across recent years. Leverage also rose meaningfully (debt-to-equity ~0.65 vs ~0.34 prior year), increasing risk if cash conversion doesn’t normalize.

Income Statement

86Very Positive

Balance Sheet

74Positive

Cash Flow

38Negative

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	32.46B	29.19B	20.12B	18.05B	17.75B	19.23B
Gross Profit	10.75B	9.51B	6.64B	5.72B	5.74B	6.04B
EBITDA	7.09B	5.93B	3.23B	2.47B	2.25B	2.07B
Net Income	4.58B	3.82B	1.96B	2.15B	1.82B	1.63B
Balance Sheet
Total Assets	40.49B	36.08B	27.64B	28.28B	23.96B	23.06B
Cash, Cash Equivalents and Short-Term Investments	1.38B	1.02B	1.93B	2.34B	2.11B	3.05B
Total Debt	15.49B	10.49B	4.79B	4.79B	3.65B	3.87B
Total Liabilities	23.41B	19.97B	13.68B	13.97B	11.79B	12.29B
Stockholders Equity	17.08B	16.10B	13.96B	14.30B	12.17B	10.77B
Cash Flow
Free Cash Flow	0	-4.35B	1.74B	-706.00M	-1.02B	3.20B
Operating Cash Flow	0	-3.62B	2.15B	-206.00M	-860.00M	3.35B
Investing Cash Flow	0	-864.00M	-471.00M	-517.00M	151.00M	-263.00M
Financing Cash Flow	0	3.58B	-2.08B	956.00M	-230.00M	-2.33B

Nippon Avionics Co., Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price5600.00

Price Trends

50DMA6444.10Negative

100DMA5868.90Negative

200DMA6157.77Negative

Market Momentum

MACD-355.97Positive

RSI42.84Neutral

STOCH37.87Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6946, the sentiment is Negative. The current price of 5600.00 is below the 20-day moving average (MA) of 6189.25, below the 50-day MA of 6444.10, and below the 200-day MA of 6157.77, indicating a bearish trend. The MACD of -355.97 indicates Positive momentum. The RSI at 42.84 is Neutral, neither overbought nor oversold. The STOCH value of 37.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6946.

Nippon Avionics Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

JP:6946 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:5803	69Neutral	JPY 5.42T	18.83	45.63%	1.30%	36.67%	108.62%
JP:6804	65Neutral	JPY 110.65B	5.92	12.49%	5.10%	40.52%	147.61%
JP:6516	64Neutral	JPY 170.04B	14.20	―	3.47%	20.05%	53.26%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
JP:6905	62Neutral	JPY 49.85B	-19.08	―	4.43%	17.15%	-463.16%
JP:6946	58Neutral	JPY 92.01B	16.43	30.85%	0.18%	45.20%	107.87%
JP:5801	56Neutral	JPY 1.55T	14.04	28.07%	0.69%	15.50%	237.49%

* Industrials Sector Average

Performance Comparison

JP:6946 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:6946	Nippon Avionics Co., Ltd.	5600.00	368.02	7.03%
JP:5801	Furukawa Electric Co	2373.00	1298.51	120.85%
JP:6804	Hosiden Corp	2196.00	-205.70	-8.56%
JP:5803	Fujikura Ltd	3121.00	-300.44	-8.78%
JP:6516	Sanyo Denki Co., Ltd.	4615.00	855.87	22.77%
JP:6905	Cosel Co., Ltd.	1242.00	74.35	6.37%

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: Nov 07, 2026

Nippon Avionics Co., Ltd. AI Stock Analysis