TEAR Corp. (2485) AI Stock Analysis

• Market Cap: ¥11.21B
• Dividend Yield: 4.32%
• Average Volume (3M): 102.75K
• Price to Earnings (P/E): 9.3
• Beta (1Y): 0.23
• Revenue Growth: 25.26%
• EPS Growth: 65.66%
• Country: JP
• Employees: 899
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Personal Products & Services
• EPS (TTM): 5.06
• Shares Outstanding: 22,510,100
• 10 Day Avg. Volume: 74,460
• 30 Day Avg. Volume: 102,746
• PEG Ratio: -2.83
• Price to Book (P/B): 1.25
• Price to Sales (P/S): 0.54
• P/FCF Ratio: 12.83
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: ¥570.00 ▲(23.11% Upside)

TEAR Corp.'s strong financial performance, particularly in revenue growth and cash flow improvement, is the most significant factor driving the score. The attractive valuation further supports the stock's potential. However, mixed technical indicators suggest caution in the short term.

TEAR Corp. Business Overview & Revenue Model

Company Description

Tear Corporation provides funeral services in Japan. The company operates funeral hall primarily in Chubu, Kansai, and Kanto districts. It also offers undertaking funerals and memorial services at the hall, as well as funeral and memorial services at temples, private homes, and public places; and follow-ups according to the consultation content of the bereaved families. Tear Corporation was incorporated in 1997 and is headquartered in Nagoya, Japan.

How the Company Makes Money

TEAR Corp. generates revenue through multiple streams, primarily from software licensing, subscription services, and consulting fees. The company offers its software products on a subscription basis, allowing clients to access continuous updates and support, which creates a steady stream of recurring revenue. Additionally, TEAR Corp. provides customized IT consulting services, charging clients for tailored solutions and implementation support. Significant partnerships with major cloud service providers enhance its offerings, allowing the company to bundle services effectively and attract larger clients. Furthermore, the demand for cybersecurity solutions has surged, contributing to increased sales in this sector, thereby bolstering overall revenue.

TEAR Corp. Financial Statement Overview

Summary

TEAR Corp. demonstrates strong revenue growth and operational efficiency with healthy profit margins. The balance sheet is stable, though the increase in debt warrants attention. Cash flow has improved significantly, enhancing financial flexibility. Continued focus on managing leverage and optimizing cash flow is crucial for sustaining growth.

Income Statement

TEAR Corp. has demonstrated strong revenue growth with a 33.9% increase from the previous year, indicating robust demand for its products. The gross profit margin stands at 39.5%, reflecting efficient cost management. The net profit margin is 4.0%, which is moderate but shows room for improvement. EBIT and EBITDA margins are healthy at 7.6% and 14.0%, respectively, indicating strong operational efficiency.

Balance Sheet

The company's balance sheet shows a debt-to-equity ratio of 1.49, suggesting a moderate level of leverage. The return on equity is 9.2%, indicating effective use of equity capital. The equity ratio is 30.0%, reflecting a solid equity base, though there is a noticeable increase in total debt, which could pose a risk if not managed carefully.

Cash Flow

TEAR Corp. has shown a significant improvement in free cash flow, turning positive from a deficit last year, with a free cash flow growth rate of 1074.4%. The operating cash flow to net income ratio is 2.66, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio is 1.06, which is modest and suggests potential for further cash flow optimization.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.69B	18.84B	14.07B	13.28B	12.20B	11.92B
Gross Profit	8.42B	7.44B	5.77B	5.26B	4.75B	4.56B
EBITDA	3.37B	2.63B	1.78B	1.49B	1.40B	1.16B
Net Income	1.21B	752.00M	789.00M	568.00M	542.00M	345.00M
Balance Sheet
Total Assets	27.94B	27.33B	15.38B	14.17B	13.54B	13.47B
Cash, Cash Equivalents and Short-Term Investments	5.21B	4.29B	2.94B	3.08B	2.87B	3.06B
Total Debt	12.04B	12.23B	2.82B	2.37B	2.15B	2.57B
Total Liabilities	19.15B	19.14B	7.50B	6.67B	4.52B	4.54B
Stockholders Equity	8.79B	8.19B	7.88B	7.50B	9.02B	8.93B
Cash Flow
Free Cash Flow	0.00	799.00M	-82.00M	445.00M	743.00M	223.00M
Operating Cash Flow	0.00	2.00B	1.27B	1.35B	1.37B	986.00M
Investing Cash Flow	0.00	-9.41B	-1.41B	-906.00M	-688.00M	-742.00M
Financing Cash Flow	0.00	8.76B	-2.00M	-237.00M	-879.00M	-149.00M

TEAR Corp. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 463.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2485, the sentiment is Negative. The current price of 463 is below the 20-day moving average (MA) of 497.95, below the 50-day MA of 506.27, and below the 200-day MA of 489.31, indicating a bearish trend. The MACD of -9.10 indicates Positive momentum. The RSI at 36.37 is Neutral, neither overbought nor oversold. The STOCH value of 20.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:2485.

TEAR Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2485	74 Outperform	¥11.21B	9.25	―	4.32%	25.26%	65.66%
9628	72 Outperform	¥31.27B	6.20	―	2.47%	55.72%	97.54%
7040	71 Outperform	¥5.90B	7.01	―	3.42%	3.40%	-25.64%
2198	67 Neutral	¥22.06B	18.92	―	3.20%	-1.02%	-32.57%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
6186	54 Neutral	¥2.10B	-7.58	―	3.71%	-2.06%	-109.18%
7578	44 Neutral	¥2.17B	―	―	―	-18.74%	-1062.47%