Tsuruya Co., Ltd. Faces Valuation Scrutiny Amid Declining Sales and Profitability Challenges

Tsuruya Co., Ltd., a microcap player in the building products industry, has recently undergone an adjustment in evaluation, reflecting a revision in its score. This change comes amid a backdrop of mixed financial indicators. The company reported a Price to Earnings (P/E) ratio of 11, alongside a Price to Book Value of 0.25, suggesting a valuation that may warrant further scrutiny.
Despite a healthy EBIT to Interest ratio of 16.17, indicating a strong capacity to service its debt, the company has faced challenges in profitability, as evidenced by a Return on Equity (ROE) of 2.27%. Over the past five years, Tsuruya has experienced a decline in net sales, with an annual growth rate of -3.87%, and operating profit has also contracted at -18.18%.

In the most recent quarter ending June 2025, net sales fell to JPY 1,619.91 million, a decrease of 14.58%, while pre-tax profit saw a significant drop of 30.03%. Although the stock has generated a return of 12.94% over the past year, this performance lags behind the broader market, which has seen returns of 27.67%.

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