Amada (TSE:6113) - Share price, News & Analysis

Q: What is the Fair Price of 6113 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

6113 (¥999) is trading below our estimate of [[fair value]] (¥2241.16)

6113 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	3/6
Past Performance	4/6
Financial Health	6/6
Dividends	5/6

6113 Stock Overview

Rewards

Trading at 55.4% below our estimate of its fair value

Earnings are forecast to grow 9.48% per year

Earnings grew by 49.6% over the past year

Risk Analysis

Unstable dividend track record

Amada Competitors

Harmonic Drive Systems

TSE:6324

JP¥374.6b

NSK

TSE:6471

JP¥375.4b

Sumitomo Heavy Industries

TSE:6302

JP¥359.7b

THK

TSE:6481

JP¥320.8b

Price History & Performance

Summary of all time highs, changes and price drops for Amada
Historical stock prices
Current Share Price	JP¥999.00
52 Week High	JP¥1,264.00
52 Week Low	JP¥913.00
Beta	1.33
1 Month Change	-5.67%
3 Month Change	-1.96%
1 Year Change	-9.68%
3 Year Change	-16.68%
5 Year Change	-23.80%
Change since IPO	11.62%

Shareholder Returns

	6113	JP Machinery	JP Market
7D	-1.5%	-3.0%	-1.9%
1Y	-9.7%	-12.4%	-5.7%

Return vs Industry: 6113 exceeded the JP Machinery industry which returned -12.4% over the past year.

Return vs Market: 6113 underperformed the JP Market which returned -5.7% over the past year.

Price Volatility

Is 6113's price volatile compared to industry and market?
6113 volatility
6113 Average Weekly Movement	3.2%
Machinery Industry Average Movement	4.2%
Market Average Movement	4.1%
10% most volatile stocks in JP Market	8.4%
10% least volatile stocks in JP Market	2.2%

Stable Share Price: 6113 is not significantly more volatile than the rest of JP stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: 6113's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1946	8,906	Tsutomu Isobe	https://www.amada.co.jp

Amada Co., Ltd., together with its subsidiaries, manufactures, sells, leases, repairs, maintains, checks, and inspects metalworking machinery and equipment in Japan, North America, Europe, China, Asia, and internationally. The company offers sheet metal fabrication machines, including laser machines, punch and laser combination machines, turret punch presses, press brakes, and welders, as well as software solutions; general fabrication machines, such as shearing and deburring machines, corner shear, iron worker, AMS series, horizontal benders, tapping and fastener insertion machines, and environment related products; cutting fluids, lubricants, and other consumables; and range of tools for bending and punching. It also provides metal cutting machines, such as hyper saw, pulse cutting band saw, automatic and semi-automatic general-purpose band saw, vertical band saw, circular saw, and other machines; structural steel machines; grinding machines; and band saw blades and circular saw blades used for metal cutting machines.

Amada Fundamentals Summary

How do Amada's earnings and revenue compare to its market cap?
6113 fundamental statistics
Market Cap	JP¥347.31b
Earnings (TTM)	JP¥27.77b
Revenue (TTM)	JP¥312.66b

12.5x

P/E Ratio

1.1x

P/S Ratio

Is 6113 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
6113 income statement (TTM)
Revenue	JP¥312.66b
Cost of Revenue	JP¥179.02b
Gross Profit	JP¥133.64b
Other Expenses	JP¥105.87b
Earnings	JP¥27.77b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 05, 2022

Earnings per share (EPS)	79.87
Gross Margin	42.74%
Net Profit Margin	8.88%
Debt/Equity Ratio	1.5%

How did 6113 perform over the long term?

See historical performance and comparison

Dividends

4.6%

Current Dividend Yield

48%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 6113 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 6113?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 6113. This is calculated by dividing 6113's market cap by their current preferred multiple.
What is 6113's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥347.31b

6113 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.8x
Enterprise Value/EBITDA	4.5x
PEG Ratio	1.3x

Price to Earnings Ratio vs Peers

How does 6113's PE Ratio compare to its peers?

6113 PE Ratio vs Peers

The above table shows the PE ratio for 6113 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	24.7x
6324 Harmonic Drive Systems	56.4x	18.1%	JP¥374.6b
6471 NSK	22.6x	21.3%	JP¥375.4b
6302 Sumitomo Heavy Industries	8.2x	7.2%	JP¥359.7b
6481 THK	11.8x	8.6%	JP¥320.8b
6113 Amada	12.5x	9.5%	JP¥347.3b

Forward PE

Price-To-Earnings vs Peers: 6113 is good value based on its Price-To-Earnings Ratio (12.5x) compared to the peer average (24.7x).

Price to Earnings Ratio vs Industry

How does 6113's PE Ratio compare vs other companies in the JP Machinery Industry?

Price-To-Earnings vs Industry: 6113 is expensive based on its Price-To-Earnings Ratio (12.5x) compared to the JP Machinery industry average (10.9x)

Price to Earnings Ratio vs Fair Ratio

What is 6113's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

6113 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	12.5x
Fair PE Ratio	14x

Price-To-Earnings vs Fair Ratio: 6113 is good value based on its Price-To-Earnings Ratio (12.5x) compared to the estimated Fair Price-To-Earnings Ratio (14x).

Share Price vs Fair Value

What is the Fair Price of 6113 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 6113 (¥999) is trading below our estimate of fair value (¥2241.16)

Significantly Below Fair Value: 6113 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 6113 is poor value based on its PEG Ratio (1.3x)

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Future Growth

How is Amada forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 6113's forecast earnings growth (9.5% per year) is above the savings rate (0.04%).

Earnings vs Market: 6113's earnings (9.5% per year) are forecast to grow faster than the JP market (9% per year).

High Growth Earnings: 6113's earnings are forecast to grow, but not significantly.

Revenue vs Market: 6113's revenue (4.7% per year) is forecast to grow faster than the JP market (4.5% per year).

High Growth Revenue: 6113's revenue (4.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 6113's Return on Equity is forecast to be low in 3 years time (7.2%).

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Past Performance

How has Amada performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-7.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 6113 has high quality earnings.

Growing Profit Margin: 6113's current net profit margins (8.9%) are higher than last year (7.4%).

Past Earnings Growth Analysis

Earnings Trend: 6113's earnings have declined by 7.4% per year over the past 5 years.

Accelerating Growth: 6113's earnings growth over the past year (49.6%) exceeds its 5-year average (-7.4% per year).

Earnings vs Industry: 6113 earnings growth over the past year (49.6%) exceeded the Machinery industry 31.4%.

Return on Equity

High ROE: 6113's Return on Equity (5.8%) is considered low.

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Financial Health

How is Amada's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 6113's short term assets (¥364.1B) exceed its short term liabilities (¥111.7B).

Long Term Liabilities: 6113's short term assets (¥364.1B) exceed its long term liabilities (¥18.8B).

Debt to Equity History and Analysis

Debt Level: 6113 has more cash than its total debt.

Reducing Debt: 6113's debt to equity ratio has reduced from 4.1% to 1.5% over the past 5 years.

Debt Coverage: 6113's debt is well covered by operating cash flow (804.8%).

Interest Coverage: 6113 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Amada current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

4.60%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 6113's dividend (4.6%) is higher than the bottom 25% of dividend payers in the JP market (1.69%).

High Dividend: 6113's dividend (4.6%) is in the top 25% of dividend payers in the JP market (3.7%)

Stability and Growth of Payments

Stable Dividend: 6113's dividend payments have been volatile in the past 10 years.

Growing Dividend: 6113's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (47.6%), 6113's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (38.4%), 6113's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.0yrs

Average management tenure

CEO

Tsutomu Isobe (61 yo)

7.25yrs

Tenure

JP¥103,000,000

Compensation

Mr. Tsutomu Isobe has been the President of Amada Co., Ltd. (formerly known as Amada Holdings Co., Ltd.) since April 2015 and served as its General Manager of Business Administration Division. Mr. Isobe se...

CEO Compensation Analysis

Compensation vs Market: Insufficient data to establish whether Tsutomu's total compensation is reasonable compared to companies of similar size in the JP market.

Compensation vs Earnings: Insufficient data to compare Tsutomu's compensation with company performance.

Leadership Team

Experienced Management: 6113's management team is considered experienced (3 years average tenure).

Board Members

Experienced Board: 6113's board of directors are considered experienced (7.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/05 00:00
End of Day Share Price	2022/07/05 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31