TEAR Corp. (2485) AI Stock Analysis

• Market Cap: ¥13.60B
• Dividend Yield: 3.31%
• Average Volume (3M): 104.93K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.22
• Revenue Growth: 25.26%
• EPS Growth: 65.66%
• Country: JP
• Employees: 899
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Personal Products & Services
• EPS (TTM): 5.07
• Shares Outstanding: 22,510,100
• 10 Day Avg. Volume: 119,860
• 30 Day Avg. Volume: 104,930
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥676.00
• Price Target Upside: 11.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 81 Outperform
• Price Target: ¥681.00 ▲(12.75% Upside)

TEAR Corp. scores highly due to strong financial performance and technical indicators. The stock is supported by robust revenue growth, operational efficiency, and positive cash flow trends. Technical analysis shows bullish momentum, and the valuation is attractive with a reasonable P/E ratio and solid dividend yield.

TEAR Corp. Business Overview & Revenue Model

Company Description

TEAR Corp. (2485) is a leading technology company specializing in innovative software solutions and digital transformation services. Operating primarily in the information technology sector, TEAR Corp. develops cutting-edge applications, cloud services, and cybersecurity solutions aimed at enhancing business efficiency and security. With a diverse portfolio that includes enterprise software, data analytics, and IT consulting, the company serves a wide range of industries including finance, healthcare, and manufacturing.

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. shows strong revenue growth and solid profitability with healthy gross and net profit margins. The balance sheet is stable, with manageable leverage and decent ROE. However, cash flow challenges exist, particularly with zero free cash flow in the TTM, indicating potential liquidity issues.

Income Statement

TEAR Corp. demonstrates strong revenue growth with a TTM revenue of ¥20.47 billion, up from ¥14.07 billion in 2023, reflecting a significant revenue growth rate. Gross profit margin is healthy at 38.92% for TTM, and net profit margin stands at 4.85%, indicating solid profitability. EBIT and EBITDA margins are also robust at 8.45% and 13.90%, respectively. However, the net profit margin can be improved further for enhanced financial performance.

Balance Sheet

The company's balance sheet reveals a moderate debt-to-equity ratio of 1.47, indicating manageable leverage. Return on Equity (ROE) is decent at 11.88%, showing effective utilization of equity capital. The equity ratio is 30.50%, reflecting a balanced capital structure but leaves room for improvement to strengthen financial stability.

Cash Flow

Cash flow statements show challenges with free cash flow, which is currently zero in TTM. Historical free cash flow growth was strong, but maintaining positive free cash flow in the upcoming periods is crucial. Operating cash flow to net income ratio is not available for TTM, indicating potential issues in translating income to cash flow.

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

TEAR Corp. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 604.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2485, the sentiment is Positive. The current price of 604 is above the 20-day moving average (MA) of 598.15, above the 50-day MA of 550.58, and above the 200-day MA of 466.77, indicating a bullish trend. The MACD of 18.17 indicates Positive momentum. The RSI at 66.86 is Neutral, neither overbought nor oversold. The STOCH value of 82.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2485.

TEAR Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2485	81 Outperform	¥13.60B	11.22		3.31%	25.26%	65.66%
9628	81 Outperform	¥34.61B	6.87		2.32%	42.55%	101.64%
2198	76 Outperform	¥23.47B	17.97		3.00%	-1.20%	-30.27%
7040	71 Outperform	¥5.76B	6.89		3.57%	2.08%	-30.72%
Sector *	66 Neutral	S$1.04B	40.29	6.20%	2.77%	5.61%	-25.99%
6186	64 Neutral	¥2.16B	7.99		3.51%	-2.89%	-144.95%
7578	45 Neutral	¥2.16B	―		―	-21.38%	-195.77%