# Obayashi (1802.JP)

Canonical: https://gigainvestors.com/s/1802.JP

Analysis as of: 2026-10-15T07:09:20.163Z. Financial observations: FY2013–FY2026.

Listing currency: JPY. Reporting currency: JPY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: JPY 2,793.00 per share; close as of 2026-10-15.

Estimated value: low JPY 1,984.82 per share, central JPY 2,376.81 per share, high JPY 2,682.85 per share. Buy at or below the central value JPY 2,376.81 per share. Valuation as of 2026-10-15T07:09:20.163Z; scenarios are not confidence intervals.

Expected annual return: 8.7% at the stated quote. About 8.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; JP 10-year bond 2.9% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.31×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.07×

- FY2018: 0.07×

- FY2019: 0.08×

- FY2020: 0.07×

- FY2021: 0.07×

- FY2022: 0.02×

- FY2023: 0.05×

- FY2024: 0.03×

- FY2025: 0.05×

- FY2026: 0.08×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 11.7%

- ROIC, second-lowest year: 5.5%

- Typical minus recent gross margin: 0.8 pp

- Typical gross margin (annual median): 12.2%

- Recent gross margin (lower of latest and 3-year median): 11.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.1%

- ROIC including acquisitions, ten-year median: 6.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 15.8%

- FY2018: 14.1%

- FY2019: 14.2%

- FY2020: 16.5%

- FY2021: 10.7%

- FY2022: 3.4%

- FY2023: 8.0%

- FY2024: 5.5%

- FY2025: 9.8%

- FY2026: 12.8%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.71×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: JPY 361B

- Net income, five-year total: JPY 511B

- Return on incremental invested capital: 18.8%

- Working capital / revenue, annual change: -0.2 pp

- Working capital / revenue, change between three-year averages: -1.4 pp

- Working capital / revenue, final three-year average: 0.2%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 0.98×

- FY2023: 0.30×

- FY2024: 0.99×

- FY2025: 0.98×

- FY2026: 0.47×

### management: pass

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 14.2% vs 9.8%

- Per-share earnings: 129.09 to 202.91 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.3%

- Ordinary dilution, 5-year annual growth: -0.6%

- Market cap gain: JPY 1.87T

- Cumulative retained earnings: JPY 571B

- Diluted shares, 10-year annual growth: -0.3%

- Diluted shares, 5-year annual growth: -0.6%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 5.8%

- Per-share value change: JPY 73.82

- Per-share value, starting three-year median: JPY 129.09

- Per-share value, ending three-year median: JPY 202.91

- Buybacks concentrated in cheaper years (correlation): -0.49

- Average buyback yield: 0.5%

- Buyback history: 6 years

- Debt-funded buybacks: No

- Acquisition spending: JPY 49B

- Cumulative net income, 10 years: JPY 1.02T

- ROIC, first three-year median: 14.2%

- ROIC, last three-year median: 9.8%

Chart: Earnings per share; fiscal year observations.

- FY2017: JPY 131.66

- FY2018: JPY 129.09

- FY2019: JPY 157.65

- FY2020: JPY 157.59

- FY2021: JPY 137.64

- FY2022: JPY 54.55

- FY2023: JPY 108.34

- FY2024: JPY 104.69

- FY2025: JPY 202.91

- FY2026: JPY 249.42

### accounting: pass

- Sloan accruals: -2.5%

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.46×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.05×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -3.2%

- FY2018: -1.0%

- FY2019: 3.1%

- FY2020: -5.6%

- FY2021: 3.3%

- FY2022: -1.3%

- FY2023: -5.8%

- FY2024: 0.8%

- FY2025: 2.0%

- FY2026: -2.5%

## Holders

## Price story

Down 37% since Feb 2026 · sales -0.2%

Story as of 2026-10-16T10:00:13.886Z; price observation 2026-10-15.

Price needs cash profits to grow 6.3% a year for ten years

### Sales · FY2025–2026

sales -0.2%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YITC.pdf; observed 2026-06-24.

- FY2017: JPY 1.87T 

- FY2018: JPY 1.90T 

- FY2019: JPY 2.04T 

- FY2020: JPY 2.07T 

- FY2021: JPY 1.77T 

- FY2022: JPY 1.92T 

- FY2023: JPY 1.98T 

- FY2024: JPY 2.33T 

- FY2025: JPY 2.59T 

- FY2026: JPY 2.59T 

### Gross margin · FY2026

gross margin 14.1%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YITC.pdf; observed 2026-06-24.

- FY2017: 12.0% 

- FY2018: 12.3% 

- FY2019: 12.5% 

- FY2020: 12.3% 

- FY2021: 12.8% 

- FY2022: 8.0% 

- FY2023: 10.9% 

- FY2024: 9.4% 

- FY2025: 11.4% 

- FY2026: 14.1% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Annual sales are JPY 2.6 trillion.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YITC.pdf (filed 2026-06-24); FY2026: revenue 2586258000000; grossProfit 364691000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 9.4% to 14.1% during 2024–26; it earns 11.7% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2024: grossProfit / revenue = 9.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2025: grossProfit / revenue = 11.4%.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YITC.pdf (filed 2026-06-24); FY2026: grossProfit / revenue = 14.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); 10-year return on capital observations [[2017,0.15752796420745108],[2018,0.14127424031975155],[2019,0.14158764394514567],[2020,0.16482763522442628],[2021,0.10685742677120835],[2022,0.03432824220889968],[2023,0.07969670811641817],[2024,0.055114229951471985],[2025,0.09810791059502189],[2026,0.12767841648156722]]; median 0.11726792162638779. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Reinvests 32.9% of cash earnings; earns 18.8% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2017: growth capex 23428126464.568443; upkeep 16326873535.431557; owner earnings 93062126464.56845. Growth capex / owner earnings = 0.25174716455128754.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2018: growth capex 7176243176.401138; upkeep 64788756823.59886; owner earnings 42433243176.40114. Growth capex / owner earnings = 0.1691184231798747.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2019: growth capex 18880000000; upkeep 17672000000; owner earnings 113048000000. Growth capex / owner earnings = 0.16700870426721393.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2020: growth capex 8764452922.072487; upkeep 38706547077.92751; owner earnings 93922452922.07248. Growth capex / owner earnings = 0.09331584354322985.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2021: growth capex 0; upkeep 57431000000; owner earnings 60504000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2022: growth capex 37339000000; upkeep 20691000000; owner earnings 38247000000. Growth capex / owner earnings = 0.9762595759144508.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2023: growth capex 19046059240.72551; upkeep 77542940759.27449; cash acquisitions 4350000000; owner earnings 23677059240.72551. Growth capex plus acquisitions / owner earnings = 0.9881319720855929.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2024: growth capex 51274000000; upkeep 27117000000; cash acquisitions 14452000000; owner earnings 74541000000. Growth capex plus acquisitions / owner earnings = 0.8817429334191921.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2025: growth capex 17855000000; upkeep 32087000000; cash acquisitions 0; owner earnings 143083000000. Growth capex plus acquisitions / owner earnings = 0.12478771062949477.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YITC.pdf (filed 2026-06-24); FY2026: growth capex 0; upkeep 125630000000; cash acquisitions 26873000000; owner earnings 81593000000. Growth capex plus acquisitions / owner earnings = 0.32935423381907764.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); Incremental return on capital 0.18834206664382355, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); Dividend observations: [[2017,15797000000],[2018,23696000000],[2019,20105000000],[2020,24413000000],[2021,22977000000],[2022,22977000000],[2023,26567000000],[2024,30155000000],[2025,67486000000],[2026,57788000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YITC.pdf (filed 2026-06-24); FY2026: cash repurchases 58061000000 JPY.

### What the price says

The price assumes cash profits grow 6.3% yearly over ten years; actual growth was 15.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); Ten-year compound average after fade. Initial solved rate 0.07678982811864332. Price 2793; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 27.318604282717605 → FY2026 117.12156527143917. Closing-price date 2026-10-15.

## Monthly share-price history (JPY per share)

- 2016-11: JPY 1,088.00 per share

- 2016-12: JPY 1,117.00 per share

- 2017-01: JPY 1,076.00 per share

- 2017-02: JPY 1,044.00 per share

- 2017-03: JPY 1,041.00 per share

- 2017-04: JPY 1,081.00 per share

- 2017-05: JPY 1,224.00 per share

- 2017-06: JPY 1,321.00 per share

- 2017-07: JPY 1,328.00 per share

- 2017-08: JPY 1,297.00 per share

- 2017-09: JPY 1,349.00 per share

- 2017-10: JPY 1,480.00 per share

- 2017-11: JPY 1,452.00 per share

- 2017-12: JPY 1,364.00 per share

- 2018-01: JPY 1,312.00 per share

- 2018-02: JPY 1,214.00 per share

- 2018-03: JPY 1,164.00 per share

- 2018-04: JPY 1,262.00 per share

- 2018-05: JPY 1,099.00 per share

- 2018-06: JPY 1,153.00 per share

- 2018-07: JPY 1,165.00 per share

- 2018-08: JPY 1,041.00 per share

- 2018-09: JPY 1,076.00 per share

- 2018-10: JPY 997.00 per share

- 2018-11: JPY 1,132.00 per share

- 2018-12: JPY 994.00 per share

- 2019-01: JPY 1,033.00 per share

- 2019-02: JPY 1,085.00 per share

- 2019-03: JPY 1,114.00 per share

- 2019-04: JPY 1,089.00 per share

- 2019-05: JPY 998.00 per share

- 2019-06: JPY 1,061.00 per share

- 2019-07: JPY 1,036.00 per share

- 2019-08: JPY 979.00 per share

- 2019-09: JPY 1,076.00 per share

- 2019-10: JPY 1,120.00 per share

- 2019-11: JPY 1,160.00 per share

- 2019-12: JPY 1,217.00 per share

- 2020-01: JPY 1,213.00 per share

- 2020-02: JPY 1,089.00 per share

- 2020-03: JPY 926.00 per share

- 2020-04: JPY 952.00 per share

- 2020-05: JPY 997.00 per share

- 2020-06: JPY 1,008.00 per share

- 2020-07: JPY 938.00 per share

- 2020-08: JPY 1,037.00 per share

- 2020-09: JPY 955.00 per share

- 2020-10: JPY 870.00 per share

- 2020-11: JPY 920.00 per share

- 2020-12: JPY 890.00 per share

- 2021-01: JPY 876.00 per share

- 2021-02: JPY 913.00 per share

- 2021-03: JPY 1,015.00 per share

- 2021-04: JPY 997.00 per share

- 2021-05: JPY 922.00 per share

- 2021-06: JPY 883.00 per share

- 2021-07: JPY 891.00 per share

- 2021-08: JPY 906.00 per share

- 2021-09: JPY 929.00 per share

- 2021-10: JPY 958.00 per share

- 2021-11: JPY 836.00 per share

- 2021-12: JPY 890.00 per share

- 2022-01: JPY 926.00 per share

- 2022-02: JPY 961.00 per share

- 2022-03: JPY 900.00 per share

- 2022-04: JPY 896.00 per share

- 2022-05: JPY 913.00 per share

- 2022-06: JPY 985.00 per share

- 2022-07: JPY 976.00 per share

- 2022-08: JPY 966.00 per share

- 2022-09: JPY 928.00 per share

- 2022-10: JPY 955.00 per share

- 2022-11: JPY 1,024.00 per share

- 2022-12: JPY 998.00 per share

- 2023-01: JPY 1,006.00 per share

- 2023-02: JPY 1,007.00 per share

- 2023-03: JPY 1,013.00 per share

- 2023-04: JPY 1,132.00 per share

- 2023-05: JPY 1,124.00 per share

- 2023-06: JPY 1,244.00 per share

- 2023-07: JPY 1,314.50 per share

- 2023-08: JPY 1,319.00 per share

- 2023-09: JPY 1,316.50 per share

- 2023-10: JPY 1,288.00 per share

- 2023-11: JPY 1,247.50 per share

- 2023-12: JPY 1,220.00 per share

- 2024-01: JPY 1,369.50 per share

- 2024-02: JPY 1,449.50 per share

- 2024-03: JPY 1,852.00 per share

- 2024-04: JPY 1,762.00 per share

- 2024-05: JPY 1,829.50 per share

- 2024-06: JPY 1,912.00 per share

- 2024-07: JPY 1,985.50 per share

- 2024-08: JPY 1,864.00 per share

- 2024-09: JPY 1,813.00 per share

- 2024-10: JPY 1,890.50 per share

- 2024-11: JPY 2,135.00 per share

- 2024-12: JPY 2,093.00 per share

- 2025-01: JPY 2,090.50 per share

- 2025-02: JPY 2,023.00 per share

- 2025-03: JPY 1,984.00 per share

- 2025-04: JPY 2,216.50 per share

- 2025-05: JPY 2,180.50 per share

- 2025-06: JPY 2,185.50 per share

- 2025-07: JPY 2,228.50 per share

- 2025-08: JPY 2,396.50 per share

- 2025-09: JPY 2,429.00 per share

- 2025-10: JPY 2,612.00 per share

- 2025-11: JPY 3,184.00 per share

- 2025-12: JPY 3,269.00 per share

- 2026-01: JPY 3,487.00 per share

- 2026-02: JPY 4,416.00 per share

- 2026-03: JPY 3,756.00 per share

- 2026-04: JPY 3,659.00 per share

- 2026-05: JPY 3,245.00 per share

- 2026-06: JPY 3,257.00 per share

- 2026-07: JPY 3,164.00 per share

- 2026-08: JPY 2,992.50 per share

- 2026-09: JPY 3,008.00 per share

- 2026-10: JPY 2,854.00 per share

## Annual estimated value (JPY per share)

- FY2020: low JPY 1,821.61 per share, central JPY 2,018.85 per share, high JPY 2,281.42 per share

- FY2021: low JPY 1,536.36 per share, central JPY 1,704.46 per share, high JPY 1,928.24 per share

- FY2022: low JPY 1,327.65 per share, central JPY 1,466.00 per share, high JPY 1,650.17 per share

- FY2023: low JPY 1,575.57 per share, central JPY 1,718.37 per share, high JPY 1,908.48 per share

- FY2024: low JPY 1,678.77 per share, central JPY 2,014.75 per share, high JPY 2,282.56 per share

- FY2025: low JPY 1,903.77 per share, central JPY 2,287.02 per share, high JPY 2,588.44 per share

- FY2026: low JPY 1,984.82 per share, central JPY 2,376.81 per share, high JPY 2,682.85 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original EDINET filing](https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YITC.pdf); period 2026-03-31, filed 2026-06-24.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.