# Secom (9735.JP)

Canonical: https://gigainvestors.com/s/9735.JP

Analysis as of: 2026-10-15T07:12:05.762Z. 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 6,629.00 per share; close as of 2026-10-15.

Estimated value: low JPY 3,815.35 per share, central JPY 4,214.90 per share, high JPY 4,746.78 per share. Buy at or below the central value JPY 4,214.90 per share. Valuation as of 2026-10-15T07:12:05.762Z; scenarios are not confidence intervals.

Expected annual return: 7.0% at the stated quote. About 7.0% 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

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.05×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.14×

- FY2018: 0.14×

- FY2019: 0.13×

- FY2020: 0.13×

- FY2021: 0.13×

- FY2022: 0.14×

- FY2023: 0.12×

- FY2024: 0.12×

- FY2025: 0.12×

- FY2026: 0.13×

### moat: pass

- ROIC, median of available years: 15.8%

- ROIC, second-lowest year: 12.9%

- Typical minus recent gross margin: 0.8 pp

- Typical gross margin (annual median): 31.8%

- Recent gross margin (lower of latest and 3-year median): 30.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 6.2%

- ROIC including acquisitions, ten-year median: 12.2%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 15.8%

- FY2018: 15.4%

- FY2019: 15.7%

- FY2020: 17.2%

- FY2021: 16.8%

- FY2022: 17.8%

- FY2023: 16.0%

- FY2024: 13.2%

- FY2025: 12.3%

- FY2026: 12.9%

### economics: pass

- Owner earnings / net income, 5-yr: 0.93×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: JPY 475B

- Net income, five-year total: JPY 513B

- Return on incremental invested capital: 16.1%

- Working capital / revenue, annual change: 0.5 pp

- Working capital / revenue, change between three-year averages: 3.3 pp

- Working capital / revenue, final three-year average: 14.7%

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

- FY2022: 0.95×

- FY2023: 0.96×

- FY2024: 0.86×

- FY2025: 0.89×

- FY2026: 0.96×

### management: fail

- 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: 15.7% vs 12.9%

- Per-share earnings: 385.64 to 259.97 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 6.5%

- Ordinary dilution, 5-year annual growth: -1.3%

- Market cap gain: JPY 1.59T

- Cumulative retained earnings: JPY 505B

- Diluted shares, 10-year annual growth: 6.5%

- Diluted shares, 5-year annual growth: -1.3%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: -4.8%

- Per-share value change: JPY -125.67

- Per-share value, starting three-year median: JPY 385.64

- Per-share value, ending three-year median: JPY 259.97

- Buyback history: 0 years

- Debt-funded buybacks: No

- Acquisition spending: JPY 40B

- Cumulative net income, 10 years: JPY 940B

- ROIC, first three-year median: 15.7%

- ROIC, last three-year median: 12.9%

Chart: Earnings per share; fiscal year observations.

- FY2017: JPY 385.64

- FY2018: JPY 398.58

- FY2019: JPY 421.56

- FY2020: JPY 408.14

- FY2021: JPY 171.08

- FY2022: JPY 215.63

- FY2023: JPY 222.51

- FY2024: JPY 241.02

- FY2025: JPY 259.97

- FY2026: JPY 276.17

### accounting: pass

- Sloan accruals: -4.1%

- Receivables to sales index (DSRI): 1.02×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.81×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.10×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -5.3%

- FY2018: -2.1%

- FY2019: -3.2%

- FY2020: -4.8%

- FY2021: -5.8%

- FY2022: -3.7%

- FY2023: -2.5%

- FY2024: -3.1%

- FY2025: -2.8%

- FY2026: -4.1%

## Holders

## Price story

Price needs cash profits to grow 7.8% a year for ten years · sales +4.7%

Story as of 2026-10-16T10:00:14.934Z; price observation 2026-10-15.

Price needs cash profits to grow 7.8% a year for ten years

### Sales · FY2025–2026

sales +4.7%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YICV.pdf; observed 2026-06-24.

- FY2017: JPY 928B 

- FY2018: JPY 971B 

- FY2019: JPY 1.01T 

- FY2020: JPY 1.06T 

- FY2021: JPY 1.04T 

- FY2022: JPY 1.05T 

- FY2023: JPY 1.10T 

- FY2024: JPY 1.15T 

- FY2025: JPY 1.20T 

- FY2026: JPY 1.26T 

### Gross margin · FY2026

gross margin 31.7%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YICV.pdf; observed 2026-06-24.

- FY2017: 33.0% 

- FY2018: 32.8% 

- FY2019: 31.7% 

- FY2020: 31.8% 

- FY2021: 31.9% 

- FY2022: 32.2% 

- FY2023: 31.1% 

- FY2024: 30.9% 

- FY2025: 30.9% 

- FY2026: 31.7% 

## Owner memo

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

### How it makes money

Annual sales are JPY 1.3 trillion.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YICV.pdf (filed 2026-06-24); FY2026: revenue 1256896000000; grossProfit 398803000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 30.9% to 31.7% during 2024–26; it earns 15.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2024: grossProfit / revenue = 30.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2025: grossProfit / revenue = 30.9%.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YICV.pdf (filed 2026-06-24); FY2026: grossProfit / revenue = 31.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); 10-year return on capital observations [[2017,0.15805614256951095],[2018,0.15445893694123175],[2019,0.15748491461365513],[2020,0.1724102626362502],[2021,0.1676820425550578],[2022,0.17797767941547585],[2023,0.16029130275074094],[2024,0.132341122421101],[2025,0.12305544891571088],[2026,0.12877685667679595]]; median 0.15777052859158303. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 32% gross margin through 2022 cost inflation.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YICV.pdf (filed 2026-06-24); Gross margin observations: [[2021,0.31911539553122026],[2022,0.32163557201490867],[2023,0.3109541662769782]]; range within 2 percentage points.

### Where the cash goes

Spends 15.4% of cash earnings on expansion; earns 16.1% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2017: growth capex 0; upkeep 53085000000; owner earnings 82133064291.35988. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2018: growth capex 1317000000; upkeep 56459000000; owner earnings 82597892483.8984. Growth capex / owner earnings = 0.01594471675238851.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2019: growth capex 6762000000; upkeep 58103000000; owner earnings 87541426712.86487. Growth capex / owner earnings = 0.07724342924155557.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2020: growth capex 10177000000; upkeep 59611000000; owner earnings 84591060857.998. Growth capex / owner earnings = 0.12030822047596741.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2021: growth capex 0; upkeep 58110000000; owner earnings 72667200679.95529. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2022: growth capex 1872000000; upkeep 61799000000; owner earnings 89243929858.90453. Growth capex / owner earnings = 0.02097621656688191.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2023: growth capex 0; upkeep 61338000000; owner earnings 92672599975.50082. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2024: growth capex 19830227874.530807; upkeep 74590772125.4692; owner earnings 87837465640.75067. Growth capex / owner earnings = 0.22576047396033835.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); FY2025: growth capex 16865621058.022888; upkeep 78395378941.97711; owner earnings 96702123585.1579. Growth capex / owner earnings = 0.17440796988466.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YICV.pdf (filed 2026-06-24); FY2026: growth capex 16660000000; upkeep 73909000000; owner earnings 108169661894.42787. Growth capex / owner earnings = 0.15401730677738398.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); Incremental return on capital 0.16056167803928917, 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: [[2017,30556000000],[2018,32739000000],[2019,34921000000],[2020,37104000000],[2021,37104000000],[2022,38195000000],[2023,39060000000],[2024,40482000000],[2025,39697000000],[2026,41151000000]]. Zero only counted when supported by a complete cash-flow statement.

### What could break it

"①メディカルサービス事業におけるリスク" (9735 filing, Jun 2026)

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YICV.pdf (filed 2026-06-24); ①メディカルサービス事業におけるリスク

### What the price says

The price assumes cash profits grow 7.8% yearly over ten years; actual decline was 2.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-24); Ten-year compound average after fade. Initial solved rate 0.09887067291634632. Price 6629; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 346.0414117462312 → FY2026 265.1578662315967. Closing-price date 2026-10-15.

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

- 2016-11: JPY 4,159.50 per share

- 2016-12: JPY 4,274.00 per share

- 2017-01: JPY 4,083.00 per share

- 2017-02: JPY 4,092.50 per share

- 2017-03: JPY 3,984.50 per share

- 2017-04: JPY 4,043.00 per share

- 2017-05: JPY 4,049.00 per share

- 2017-06: JPY 4,262.50 per share

- 2017-07: JPY 4,138.50 per share

- 2017-08: JPY 4,081.00 per share

- 2017-09: JPY 4,101.00 per share

- 2017-10: JPY 4,288.50 per share

- 2017-11: JPY 4,207.00 per share

- 2017-12: JPY 4,253.50 per share

- 2018-01: JPY 4,171.00 per share

- 2018-02: JPY 3,840.00 per share

- 2018-03: JPY 3,960.00 per share

- 2018-04: JPY 4,101.00 per share

- 2018-05: JPY 4,059.50 per share

- 2018-06: JPY 4,253.50 per share

- 2018-07: JPY 4,265.00 per share

- 2018-08: JPY 4,572.50 per share

- 2018-09: JPY 4,631.00 per share

- 2018-10: JPY 4,625.50 per share

- 2018-11: JPY 4,803.00 per share

- 2018-12: JPY 4,557.00 per share

- 2019-01: JPY 4,550.50 per share

- 2019-02: JPY 4,810.00 per share

- 2019-03: JPY 4,741.00 per share

- 2019-04: JPY 4,669.00 per share

- 2019-05: JPY 4,644.50 per share

- 2019-06: JPY 4,637.00 per share

- 2019-07: JPY 4,275.50 per share

- 2019-08: JPY 4,532.00 per share

- 2019-09: JPY 4,929.00 per share

- 2019-10: JPY 5,032.50 per share

- 2019-11: JPY 4,653.50 per share

- 2019-12: JPY 4,888.50 per share

- 2020-01: JPY 4,856.50 per share

- 2020-02: JPY 4,287.50 per share

- 2020-03: JPY 4,487.00 per share

- 2020-04: JPY 4,502.50 per share

- 2020-05: JPY 4,667.00 per share

- 2020-06: JPY 4,711.50 per share

- 2020-07: JPY 4,540.50 per share

- 2020-08: JPY 5,012.50 per share

- 2020-09: JPY 4,803.00 per share

- 2020-10: JPY 4,397.50 per share

- 2020-11: JPY 5,197.50 per share

- 2020-12: JPY 4,758.50 per share

- 2021-01: JPY 4,738.50 per share

- 2021-02: JPY 4,613.00 per share

- 2021-03: JPY 4,656.50 per share

- 2021-04: JPY 4,538.00 per share

- 2021-05: JPY 4,285.00 per share

- 2021-06: JPY 4,222.00 per share

- 2021-07: JPY 4,127.00 per share

- 2021-08: JPY 4,172.50 per share

- 2021-09: JPY 4,051.50 per share

- 2021-10: JPY 3,869.50 per share

- 2021-11: JPY 3,832.00 per share

- 2021-12: JPY 3,993.00 per share

- 2022-01: JPY 4,042.00 per share

- 2022-02: JPY 4,211.00 per share

- 2022-03: JPY 4,434.00 per share

- 2022-04: JPY 4,587.00 per share

- 2022-05: JPY 4,248.50 per share

- 2022-06: JPY 4,191.50 per share

- 2022-07: JPY 4,445.00 per share

- 2022-08: JPY 4,461.00 per share

- 2022-09: JPY 4,138.00 per share

- 2022-10: JPY 4,245.50 per share

- 2022-11: JPY 4,242.50 per share

- 2022-12: JPY 3,771.50 per share

- 2023-01: JPY 3,860.50 per share

- 2023-02: JPY 3,961.50 per share

- 2023-03: JPY 4,082.00 per share

- 2023-04: JPY 4,349.00 per share

- 2023-05: JPY 4,568.00 per share

- 2023-06: JPY 4,869.50 per share

- 2023-07: JPY 4,766.50 per share

- 2023-08: JPY 5,097.50 per share

- 2023-09: JPY 5,070.00 per share

- 2023-10: JPY 5,225.00 per share

- 2023-11: JPY 5,147.50 per share

- 2023-12: JPY 5,077.50 per share

- 2024-01: JPY 5,360.00 per share

- 2024-02: JPY 5,460.00 per share

- 2024-03: JPY 5,467.50 per share

- 2024-04: JPY 5,490.00 per share

- 2024-05: JPY 4,886.00 per share

- 2024-06: JPY 4,748.50 per share

- 2024-07: JPY 4,811.00 per share

- 2024-08: JPY 5,310.00 per share

- 2024-09: JPY 5,294.00 per share

- 2024-10: JPY 5,461.00 per share

- 2024-11: JPY 5,223.00 per share

- 2024-12: JPY 5,369.00 per share

- 2025-01: JPY 5,233.00 per share

- 2025-02: JPY 5,147.00 per share

- 2025-03: JPY 5,087.00 per share

- 2025-04: JPY 5,248.00 per share

- 2025-05: JPY 5,268.00 per share

- 2025-06: JPY 5,183.00 per share

- 2025-07: JPY 5,416.00 per share

- 2025-08: JPY 5,448.00 per share

- 2025-09: JPY 5,425.00 per share

- 2025-10: JPY 5,213.00 per share

- 2025-11: JPY 5,279.00 per share

- 2025-12: JPY 5,573.00 per share

- 2026-01: JPY 5,659.00 per share

- 2026-02: JPY 6,038.00 per share

- 2026-03: JPY 6,036.00 per share

- 2026-04: JPY 5,740.00 per share

- 2026-05: JPY 6,350.00 per share

- 2026-06: JPY 6,456.00 per share

- 2026-07: JPY 6,882.00 per share

- 2026-08: JPY 6,491.00 per share

- 2026-09: JPY 6,194.00 per share

- 2026-10: JPY 6,462.00 per share

## Annual estimated value (JPY per share)

- FY2020: low JPY 6,249.36 per share, central JPY 6,876.84 per share, high JPY 7,712.15 per share

- FY2021: low JPY 3,203.43 per share, central JPY 3,507.76 per share, high JPY 3,912.89 per share

- FY2022: low JPY 3,308.63 per share, central JPY 3,616.26 per share, high JPY 4,025.77 per share

- FY2023: low JPY 3,450.01 per share, central JPY 3,773.44 per share, high JPY 4,203.98 per share

- FY2024: low JPY 3,304.34 per share, central JPY 3,632.63 per share, high JPY 4,069.66 per share

- FY2025: low JPY 3,412.33 per share, central JPY 3,762.78 per share, high JPY 4,229.30 per share

- FY2026: low JPY 3,731.03 per share, central JPY 4,121.75 per share, high JPY 4,641.89 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

Prior published observations retained from 2026-10-15T07:12:05.762Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original EDINET filing](https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100YICV.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.