KOWA CO. LTD. (7807) AI Stock Analysis

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KOWA CO. LTD.

(TSE/TYO:7807)

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Rating:75Outperform

Price Target:JPY 1,052.00▲(15.10% Upside)

Action:reiterated

Date:11/06/26

The overall score of 75 is driven primarily by a very strong valuation and a rock-solid balance sheet, which are the stock's most significant strengths. The extremely low P/E ratio of 7.42 presents a compelling value opportunity. This is supported by a nearly debt-free financial position that minimizes risk. The main factor weighing on the score is the recent decline in profitability and net income, which introduces an element of caution. Technical indicators are neutral and do not significantly sway the overall assessment.

Positive Factors

Balance Sheet StrengthSubstantial deleveraging and a larger equity base have materially improved financial flexibility. Low leverage should reduce balance-sheet pressure, preserve capacity to fund operations or investment, and help the company withstand periods of weaker profitability over the next several quarters.

Negative Factors

Sharp Revenue DeclineThe latest-year revenue contraction is a material setback for a manufacturer whose earnings depend on continued product demand and sales volume. If the decline persists, lower operating leverage could pressure profitability, reduce reinvestment capacity, and delay a return to prior earnings levels.

KOWA CO. LTD. (7807) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 3.80B
Dividend Yield: 1.43%
Average Volume (3M): 3,683
Price to Earnings (P/E): 7.4
Beta (1Y): 0.16
Revenue Growth: 2.24%
EPS Growth: 17.87%
Country: Japan
Employees: 211
Sector: General
Sector Strength: 55
Industry: Medical - Specialties

KOWA CO. LTD. Business Overview & Revenue Model

Company Description

Kowa Co.,Ltd., together with its subsidiaries, manufactures and sells nursing care products and welfare equipment under the Tacaof, AURULA, and GENTIL MARRONE brands in Japan. It operates through Nursing Care and Equipment Manufacturing and Sales Bus...

KOWA CO. LTD. Financial Statement Overview

Summary

The company's financial health is a tale of two halves. The balance sheet is exceptional (Score 92), with near-zero debt and strong equity, providing significant stability. Cash flow is solid (Score 78), with high conversion of net income. However, the income statement (Score 58) shows softening profitability and a recent net income decline. The overall financial profile is robust, anchored by a fortress-like balance sheet, but recent earnings pressure tempers the score.

Income Statement

58Neutral

Balance Sheet

92Very Positive

Cash Flow

78Positive

Financial statement breakdown
Breakdown	TTM	Feb 2026	Feb 2025	Feb 2024	Feb 2023	Feb 2022
Income Statement
Total Revenue	6.58B	6.39B	6.37B	6.40B	6.27B	5.72B
Gross Profit	2.90B	2.83B	2.82B	2.95B	2.66B	2.75B
EBITDA	1.07B	978.10M	1.02B	1.16B	874.49M	838.64M
Net Income	514.85M	427.36M	616.20M	710.43M	438.31M	400.96M
Balance Sheet
Total Assets	5.75B	5.08B	4.89B	4.82B	5.16B	5.03B
Cash, Cash Equivalents and Short-Term Investments	2.90B	2.00B	1.69B	1.02B	1.24B	1.38B
Total Debt	188.51M	201.32M	393.50M	940.09M	1.23B	1.53B
Total Liabilities	1.82B	1.55B	1.88B	2.34B	2.68B	2.78B
Stockholders Equity	3.82B	3.42B	2.92B	2.41B	2.43B	2.20B
Cash Flow
Free Cash Flow	0	600.17M	642.99M	694.39M	522.05M	388.05M
Operating Cash Flow	0	683.44M	960.49M	742.06M	557.81M	516.65M
Investing Cash Flow	0	-442.69M	38.48M	92.96M	-145.75M	-215.42M
Financing Cash Flow	0	-467.21M	-549.82M	-1.09B	-562.70M	-822.92M

KOWA CO. LTD. Technical Analysis

Technical Analysis SentimentNeutral

Last Price914.00

Price Trends

50DMA901.28Positive

100DMA872.94Positive

200DMA854.42Positive

Market Momentum

MACD4.50Positive

RSI45.72Neutral

STOCH40.66Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7807, the sentiment is Neutral. The current price of 914.00 is below the 20-day moving average (MA) of 943.80, above the 50-day MA of 901.28, and above the 200-day MA of 854.42, indicating a neutral trend. The MACD of 4.50 indicates Positive momentum. The RSI at 45.72 is Neutral, neither overbought nor oversold. The STOCH value of 40.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7807.

KOWA CO. LTD. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:7807 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:8130	82Outperform	JPY 181.32B	11.20	―	4.90%	3.91%	28.69%
JP:7807	75Outperform	JPY 4.57B	7.38	―	1.43%	2.24%	17.87%
JP:7840	67Neutral	JPY 44.61B	13.24	―	3.12%	4.44%	26.86%
JP:5956	61Neutral	JPY 4.99B	7.73	―	2.75%	-0.52%	-9.79%
JP:7887	57Neutral	JPY 6.79B	3.71	―	3.07%	40.27%	-18.17%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:7898	51Neutral	JPY 7.90B	-4.06	―	2.86%	4.00%	-208.45%

* General Sector Average

Performance Comparison

JP:7807 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:7807	KOWA CO. LTD.	914.00	95.21	11.63%
JP:5956	Toso Company, Limited	563.00	29.55	5.54%
JP:7840	France Bed Holdings Co., Ltd.	1312.00	32.59	2.55%
JP:7887	Nankai Plywood Co., Ltd.	1305.00	-214.75	-14.13%
JP:7898	Wood One Co., Ltd.	840.00	-31.01	-3.56%
JP:8130	Sangetsu Corporation	3165.00	252.12	8.66%

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 05, 2026

KOWA CO. LTD. AI Stock Analysis