TETSUJIN Holdings.Inc. (2404) AI Stock Analysis

• Market Cap: ¥6.76B
• Dividend Yield: N/A
• Average Volume (3M): 16.41K
• Price to Earnings (P/E): 6.7
• Beta (1Y): 0.28
• Revenue Growth: 13.78%
• EPS Growth: 8241.99%
• Country: JP
• Employees: 384
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): 16.92
• Shares Outstanding: 13,817,362
• 10 Day Avg. Volume: 26,200
• 30 Day Avg. Volume: 16,410
• PEG Ratio: <0.01
• Price to Book (P/B): 10.80
• Price to Sales (P/S): 0.88
• P/FCF Ratio: 22.93
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: ¥540.00 ▲(14.16% Upside)
• Action: Reiterated Date: 12/25/25
• Date: Action: Reiterated 12/25/25

The score is primarily driven by improving operating performance and cash flow in FY2025, tempered by still-high leverage that increases downside sensitivity. Technical indicators are broadly neutral with slightly soft momentum, and valuation appears moderate with no dividend yield data to provide additional support.

Positive Factors

Recovered revenue and return to profitability

FY2025's 241% revenue rebound and return to positive profitability indicate a durable demand recovery and improved unit economics for core venues. Sustained top-line traction and restored operating profits provide a foundation for reinvestment, margin stabilization, and reduced cyclicality risk over the next several quarters.

Improving cash generation and positive free cash flow

The shift to positive operating cash flow (¥682M) and free cash flow (¥309M) marks a structural improvement in internal funding capacity. Reliable FCF supports debt repayment, modest reinvestment, or liquidity buildup, reducing reliance on external financing and improving resilience over a multi-month horizon.

Demonstrated deleveraging trend

Management has materially reduced leverage from extreme levels to roughly 3.5x debt-to-equity, showing capacity to repair the balance sheet. This proven deleveraging improves refinancing prospects and strategic flexibility, lowering medium-term solvency risk if cash generation continues.

Negative Factors

Leverage remains elevated

Despite improvement, a ~3.5x debt-to-equity ratio still constrains capital allocation and heightens downside sensitivity. Elevated leverage limits the company’s ability to absorb revenue shocks, increases refinancing and interest-rate risks, and restricts strategic optionality over coming quarters if cash flow weakens.

Thin and volatile margins

Net margin of roughly 4.2% remains thin and the company has displayed volatile earnings historically. Low margin buffers reduce capacity to absorb cost inflation or demand dips, making cash flow and profitability fragile across cycles and increasing the likelihood of earnings variability over months.

Concentrated single-segment exposure

Revenue concentration in karaoke venue operations and in-store sales leaves the firm exposed to discretionary leisure demand, local foot-traffic trends, and regional shocks. Limited business diversification increases operational risk and reduces stability of revenue and cash flows over the medium term.

TETSUJIN Holdings.Inc. Business Overview & Revenue Model

Company Description

TETSUJIN Holdings, Inc. operates karaoke stores in Japan. It offers karaoke distribution systems; mobile content, such as ringtones, lyrics, and deco-mail; android dictionary, a curation site that publishes articles for Android users; and content collaboration and in-store media products. The company also operates restaurants; and nail, eyelash extension, eyebrow, and head spa salons. In addition, it manages and operates real estate facilities. The company was formerly known as TETSUJIN Inc. and changed its name to TETSUJIN Holdings, Inc. in February 2024. TETSUJIN Holdings, Inc. was incorporated in 1999 and is headquartered in Tokyo, Japan.

How the Company Makes Money

TETSUJIN Holdings, Inc. generates revenue primarily through its karaoke entertainment facilities spread across Japan. The company makes money by charging customers for time spent in private karaoke rooms, offering a range of pricing plans based on duration and room type. Additionally, TETSUJIN Holdings enhances its revenue through the sale of food and beverages in its karaoke establishments, which are often a significant part of the customer experience. The company may also derive income from related entertainment services and collaborations with other businesses in the leisure sector, although specific partnerships and their financial impact are not detailed.

TETSUJIN Holdings.Inc. Financial Statement Overview

Summary

Strong FY2025 rebound in revenue (+241%) with profitability turning positive and cash flow improving, but the balance sheet remains a key constraint with still-elevated leverage (~3.5x debt-to-equity) and a volatile earnings profile.

Income Statement

Revenue has rebounded strongly, accelerating to +241% in FY2025 after modest growth in prior years, signaling a sharp demand recovery. Profitability has also improved materially: FY2025 net margin rose to ~4.2% from near-breakeven in FY2023–FY2024, and operating results turned solidly positive versus losses in FY2020–FY2022. Offsetting this, margins remain relatively thin for the level of business risk, and the company’s earnings profile has been volatile over the cycle.

Balance Sheet

Leverage remains the key constraint. While debt-to-equity improved dramatically to ~3.5x in FY2025 from extremely high levels (~12–14x) in FY2022–FY2024, it is still elevated and leaves the company less flexible in a downturn. Equity is still relatively small versus the debt load, even after the improvement, although return on equity surged in FY2025 alongside the earnings recovery.

Cash Flow

Cash generation is positive and improving: operating cash flow rose to ¥682M and free cash flow to ¥309M in FY2025, a clear turnaround from negative cash flow in FY2020–FY2021. However, cash conversion is not especially strong relative to earnings, with free cash flow running at ~45% of net income in FY2025 (and operating cash flow coverage ratios still modest across years), suggesting working-capital or reinvestment needs are still meaningful.

Breakdown	Aug 2025	Aug 2024	Aug 2023	Aug 2022	Aug 2021
Income Statement
Total Revenue	8.04B	7.07B	6.59B	5.88B	5.24B
Gross Profit	1.16B	987.53M	845.75M	663.39M	748.48M
EBITDA	467.82M	253.56M	303.17M	299.70M	-38.84M
Net Income	335.72M	4.02M	5.55M	32.34M	-281.61M
Balance Sheet
Total Assets	4.55B	4.33B	4.32B	4.50B	4.94B
Cash, Cash Equivalents and Short-Term Investments	979.17M	738.61M	880.36M	951.37M	1.44B
Total Debt	2.32B	2.65B	2.91B	3.09B	3.52B
Total Liabilities	3.89B	4.10B	4.10B	4.28B	4.75B
Stockholders Equity	656.08M	223.53M	220.23M	220.85M	190.16M
Cash Flow
Free Cash Flow	309.06M	221.69M	78.69M	127.06M	-182.41M
Operating Cash Flow	681.65M	425.90M	217.42M	187.00M	-165.18M
Investing Cash Flow	-166.46M	-221.38M	-107.54M	-22.91M	228.46M
Financing Cash Flow	-274.64M	-346.08M	-182.01M	-616.72M	-473.91M

TETSUJIN Holdings.Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 473.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2404, the sentiment is Positive. The current price of 473 is below the 20-day moving average (MA) of 510.60, below the 50-day MA of 508.04, and below the 200-day MA of 513.00, indicating a bullish trend. The MACD of 2.09 indicates Positive momentum. The RSI at 55.03 is Neutral, neither overbought nor oversold. The STOCH value of 37.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2404.

TETSUJIN Holdings.Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4691	75 Outperform	¥16.66B	2.93	―	1.47%	19.31%	202.53%
9723	69 Neutral	¥8.28B	2.04	―	0.48%	4.02%	-9.38%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
9704	61 Neutral	¥10.92B	10.59	32.34%	―	20.16%	1467.54%
9713	58 Neutral	¥14.54B	2.42	―	0.55%	35.22%	413.40%
2404	55 Neutral	¥6.76B	6.74	―	―	13.78%	8241.99%
9720	53 Neutral	¥6.71B	37.82	―	0.39%	10.52%	-31.01%