NEC Corp. (6701) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Fujitsu Ltd.

Nomura Research Institute Ltd.

OBIC Co. Ltd.

OTSUKA CORP.

TIS, Inc. (Japan)

NEC Networks & System Integration Corp.

GMO Internet Group, Inc.

NEC Corp.

NS Solutions Corp.

SHIFT, Inc.

Fuji Soft, Inc.

Why is NEC Corp. ?

Company has a low Debt to Equity ratio (avg) at times

Flat results in Jun 25

INTEREST COVERAGE RATIO(Q) Lowest at 912.42
INTEREST(Q) Highest at JPY 7,660 MM

With ROE of 9.55%, it has a attractive valuation with a 2.64 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 98.63%, its profits have risen by 13.2%
At the current price, the company has a high dividend yield of 0

Majority shareholders : Non Institution

Market Beating Performance

The stock has generated a return of 98.63% in the last 1 year, much higher than market (Japan Nikkei 225) returns of 34.95%

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to NEC Corp. should be less than 10%
Overall Portfolio exposure to Computers - Software & Consulting should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Computers - Software & Consulting)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is NEC Corp. for you?

High Risk, High Return

Absolute

Risk Adjusted

Volatility

NEC Corp.

-100.0%

1.23

90.86%

Japan Nikkei 225

34.95%

1.33

26.21%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

2.04%

EBIT Growth (5y)

15.47%

EBIT to Interest (avg)

14.93

Debt to EBITDA (avg)

0.13

Net Debt to Equity (avg)

-0.02

Sales to Capital Employed (avg)

1.47

Tax Ratio

22.05%

Dividend Payout Ratio

21.29%

Pledged Shares

Institutional Holding

0.00%

ROCE (avg)

10.39%

ROE (avg)

9.74%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.64

EV to EBIT

18.07

EV to EBITDA

11.59

EV to Capital Employed

2.68

EV to Sales

1.49

PEG Ratio

Dividend Yield

0.00%

ROCE (Latest)

14.83%

ROE (Latest)

9.55%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Bullish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Mildly Bearish

Bullish

Dow Theory

Mildly Bearish

OBV

No Trend

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

16What is working for the Company

OPERATING CASH FLOW(Y)

Highest at JPY 493,732 MM

PRE-TAX PROFIT(Q)

At JPY 31,032 MM has Grown at 380.52%

NET PROFIT(Q)

At JPY 19,310.59 MM has Grown at 430.89%

ROCE(HY)

Highest at 10.45%

RAW MATERIAL COST(Y)

Fallen by -10.02% (YoY

CASH AND EQV(HY)

Highest at JPY 1,111,307 MM

DEBT-EQUITY RATIO (HY)

Lowest at -0.7 %

INVENTORY TURNOVER RATIO(HY)

Highest at 8.59%

-12What is not working for the Company

INTEREST COVERAGE RATIO(Q)

Lowest at 912.42

INTEREST(Q)

Highest at JPY 7,660 MM

Here's what is working for NEC Corp.

Pre-Tax Profit

At JPY 31,032 MM has Grown at 380.52%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (JPY MM)

Net Profit

At JPY 19,310.59 MM has Grown at 430.89%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very positive

Net Profit (JPY MM)

Operating Cash Flow

Highest at JPY 493,732 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (JPY MM)

Cash and Eqv

Highest at JPY 1,111,307 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debt-Equity Ratio

Lowest at -0.7 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Inventory Turnover Ratio

Highest at 8.59%

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Raw Material Cost

Fallen by -10.02% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for NEC Corp.

Interest

At JPY 7,660 MM has Grown at 95.26%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)

Interest Coverage Ratio

Lowest at 912.42

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Interest

Highest at JPY 7,660 MM

in the last five periods and Increased by 95.26% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (JPY MM)