Orix (IX) AI Stock Analysis

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Orix

(NYSE:IX)

71Outperform

Orix's stock score reflects strong financial performance and positive earnings call highlights, offset by technical weaknesses and operational challenges in specific segments. The low P/E ratio and attractive dividend yield suggest undervaluation, offering growth potential amidst a challenging market environment.

Orix (IX) vs. S&P 500 (SPY)

Market Cap

$21.35B

Dividend Yield3.47%

Average Volume (3M)194.62K

Price to Earnings (P/E)8.2

Beta (1Y)0.90

Revenue Growth0.31%

EPS Growth34.40%

CountryUS

Employees33,807

SectorFinancial

Sector Strength80

IndustryFinancial - Credit Services

Share Statistics

EPS (TTM)2.29

Shares Outstanding1,162,962,300

10 Day Avg. Volume167,678

30 Day Avg. Volume194,621

Financial Highlights & Ratios

PEG Ratio0.24

Price to Book (P/B)N/A

Price to Sales (P/S)1.33

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusHold

Number of Analyst Covering0

Orix Business Overview & Revenue Model

Company DescriptionOrix Corporation (IX) is a diversified financial services group headquartered in Tokyo, Japan, with operations extending globally. The company operates in multiple sectors, including leasing, real estate, banking, asset management, and insurance. Orix provides a broad range of products and services such as leasing and rental solutions, corporate financial services, real estate development and investment, and life insurance, catering to both corporate clients and individual customers.

How the Company Makes MoneyOrix Corporation generates revenue through its diverse portfolio of businesses. Its primary revenue streams include leasing and loan services, where it provides capital to businesses and individuals in exchange for interest and leasing fees. The company also earns income from its real estate segment through property development, management, and investment activities. Additionally, Orix generates profits from its banking and insurance operations, which include interest income from loans, premiums from insurance policies, and asset management fees. The company's strategic partnerships and investments across various sectors further contribute to its earnings, allowing it to capitalize on opportunities in different markets and regions.

Orix Financial Statement Overview

Summary

Orix shows strong revenue growth and robust profitability despite operational challenges. While the balance sheet reflects a leveraged but stable position, cash flow management has improved yet requires careful monitoring.

Income Statement

Positive

Orix has demonstrated solid revenue growth over the years with a significant increase from 2023 to 2024, indicating strong top-line growth. However, there is a notable fluctuation in EBIT and EBITDA margins, with EBIT turning negative in 2024, which could indicate operational inefficiencies or increased costs. Net profit margins remain robust, supported by a substantial increase in net income in 2024 compared to 2023.

Balance Sheet

Positive

The balance sheet shows a high level of debt relative to equity, with a debt-to-equity ratio that suggests a leveraged position, typical in the financial services industry. Equity has been increasing, demonstrating shareholder value creation. However, the equity ratio remains moderate, pointing to a balanced but slightly risk-averse approach to financing.

Cash Flow

Positive

Cash flow analysis reveals fluctuating free cash flow with a significant positive change from negative in 2023 to positive in 2024. Operating cash flow covers net income well, but the volatility in free cash flow suggests potential challenges in managing capital expenditures and financing activities.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
2.34T	2.81T	1.63T	1.58T	1.42T	1.33T
	Gross Profit
701.79B	1.17T	-14.62B	-348.00M	-43.45B	-73.36B
	EBIT
462.93B	-172.84B	360.57B	499.40B	283.13B	408.54B
	EBITDA
473.97B	0.00	714.01B	829.75B	599.09B	712.74B
	Net Income Common Stockholders
369.90B	346.13B	290.34B	317.38B	192.38B	302.70B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.85T	1.05T	3.47T	3.13T	2.96T	2.61T
	Total Assets
7.74T	16.32T	15.27T	14.27T	13.56T	13.07T
	Total Debt
4.41T	6.20T	5.72T	4.87T	4.72T	4.62T
	Net Debt
3.77T	5.17T	4.49T	3.91T	3.77T	3.63T
	Total Liabilities
6.40T	12.30T	11.84T	10.90T	10.46T	10.00T
	Stockholders Equity
1.30T	3.94T	3.36T	3.26T	3.03T	2.99T
Cash Flow		Free Cash Flow
681.09B	42.53B	-166.99B	186.07B	341.72B	49.55B
	Operating Cash Flow
1.06T	1.24T	913.09B	1.10T	1.10T	1.04T
	Investing Cash Flow
-949.32B	-1.37T	-1.10T	-808.85B	-1.21T	-1.47T
	Financing Cash Flow
14.18B	-85.48B	438.31B	-306.62B	39.88B	288.70B

Orix Technical Analysis

Technical Analysis Sentiment

Negative

Last Price18.83

Price Trends

50DMA

20.94

Negative

100DMA

21.26

Negative

200DMA

21.98

Negative

Market Momentum

MACD

0.14

Positive

RSI

44.52

Neutral

STOCH

33.83

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IX, the sentiment is Negative. The current price of 18.83 is below the 20-day moving average (MA) of 21.10, below the 50-day MA of 20.94, and below the 200-day MA of 21.98, indicating a bearish trend. The MACD of 0.14 indicates Positive momentum. The RSI at 44.52 is Neutral, neither overbought nor oversold. The STOCH value of 33.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IX.

Orix Risk Analysis

Orix disclosed 11 risk factors in its most recent earnings report. Orix reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Orix Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DFS	77 Outperform	$37.00B	8.30	24.68%	1.90%	15.46%	45.83%
IX	71 Outperform	$21.35B	8.21	10.07%	3.47%	0.31%	34.40%
ALLY	69 Neutral	$9.87B	17.85	6.63%	3.74%	3.41%	-12.41%
WU	69 Neutral	$3.39B	3.70	129.04%	9.28%	-3.38%	63.33%
OMF	66 Neutral	$4.90B	9.68	15.96%	10.14%	7.96%	-20.11%
SYF	65 Neutral	$17.03B	5.12	22.96%	2.28%	19.73%	65.57%
Sector *	63 Neutral	$12.86B	9.19	9.16%	4.78%	16.31%	-8.97%

* Financial Sector Average

Performance Comparison

Orix

18.83

-2.32

-10.97%

DFS

Discover Financial Services

147.04

23.62

19.14%

Western Union

10.13

-2.27

-18.31%

ALLY

Ally Financial

32.12

-5.29

-14.14%

SYF

Synchrony Financial

43.81

2.11

5.06%

OMF

OneMain Holdings

41.03

-4.85

-10.57%

Orix Earnings Call Summary

Earnings Call Date: Feb 10, 2025 | % Change Since: -11.14% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant net income growth and successful investment segment performance, supported by strategic share repurchases and insurance segment growth. However, challenges such as decreased profits in the Finance and Banking segments, weak business confidence in Greater China, and setbacks in the Environment and Energy segment were noted. The ORIX USA segment also faced profitability challenges.

Highlights

Record Net Income Growth

Net income for the third quarter was JPY88.8 billion, contributing to a cumulative total of JPY271.8 billion for the nine months ending December 2024, marking a 24% year-over-year increase and a record high for the nine-month period.

Strong Investment Segment Performance

Segment income increased by 86% year-over-year to JPY129 billion, driven by exits in several projects across domestic private equity, real estate, and overseas renewable energy.

Successful Share Repurchase Program

Completed JPY50 billion in share repurchases, reaching the upper limit of the buyback program, with plans to cancel treasury stocks exceeding 2% of total shares outstanding.

Insurance Segment Growth

Profit in the Insurance segment increased by 14% to JPY61.7 billion, driven by diversified asset management and strong sales of new insurance products.

Lowlights

Decreased Profit in Finance and Banking Segments

Finance segment profit decreased by 3% year-over-year to JPY137.1 billion. Banking and Credit segment profit declined by JPY5.3 billion, impacted by lower contributions from ORIX Credit.

Challenges in Greater China

Business confidence remained weak in Greater China, with a decrease in profits due to higher credit costs, particularly in Mainland China and Hong Kong.

Setback in Environment and Energy Segment

Profit decreased by JPY12.7 billion, impacted by lower profitability in the electric power retail business in Japan and increased reconstruction costs of existing facilities.

Weak Performance in ORIX USA Segment

Profit in the ORIX USA segment decreased by 22% year-over-year, affected by lower real estate mortgage profits due to prolonged higher interest rates.

Company Guidance

During the ORIX Corporation's third-quarter earnings call for the fiscal year ending March 2025, Kazuki Yamamoto, the operating officer in charge of Corporate Planning & Investor Relations, outlined several key metrics and updates. The company achieved a record-high net income of JPY88.8 billion for the third quarter and a cumulative total of JPY271.8 billion for the nine months ending December 2024, marking a 24% year-over-year increase. This performance represents a 70% progress toward the full-year net income target of JPY390 billion, with an annualized ROE of 9%. In terms of segment performance, the Finance category saw a slight 3% decrease in segment profit, while Operations experienced a 2% increase, and Investments surged by 86%, contributing to a total segment profit rise of 16% year-over-year to JPY427.5 billion. Additionally, ORIX completed JPY50 billion in share repurchases and announced plans to cancel treasury stocks exceeding 2% of total shares outstanding. The company emphasized its commitment to maintaining a stable full-year dividend policy and achieving long-term profitability through capital recycling and asset management strategies.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.