CVS Bay Area Inc. (2687) AI Stock Analysis

• Market Cap: ¥2.94B
• Dividend Yield: 3.78%
• Average Volume (3M): 23.48K
• Price to Earnings (P/E): 2.9
• Beta (1Y): 0.47
• Revenue Growth: 4.04%
• EPS Growth: 41.13%
• Country: JP
• Employees: 202
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 9.33
• Shares Outstanding: 5,064,000
• 10 Day Avg. Volume: 28,270
• 30 Day Avg. Volume: 23,476
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥648.00
• Price Target Upside: 8.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 79 Outperform
• Price Target: ¥648.00 ▲(8.72% Upside)

CVS Bay Area Inc. scores well due to strong financial performance and attractive valuation. The company's recovery in profitability and stable balance sheet are significant strengths. Technical indicators suggest stable momentum with potential for growth. However, challenges in cash flow management and debt levels require careful monitoring.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective business strategies, enhancing long-term financial stability.

Profit Margin Improvement

Improved profit margins reflect enhanced operational efficiency and cost management, supporting sustainable profitability.

Effective Use of Equity

High return on equity indicates efficient use of shareholder funds, promoting investor confidence and potential for reinvestment.

Negative Factors

Negative Free Cash Flow

Negative free cash flow suggests challenges in cash generation, potentially limiting investment capacity and financial flexibility.

Moderate Leverage

Moderate leverage could pose risks if not managed carefully, impacting the company's ability to withstand financial downturns.

Cash Flow Management Challenges

Low cash flow to net income ratio indicates insufficient cash generation from operations, necessitating improved cash management strategies.

CVS Bay Area Inc. Business Overview & Revenue Model

Company Description

CVS Bay Area Inc. (2687) is a diversified healthcare company operating primarily in the pharmacy and retail sectors. The company provides a range of services including prescription medications, over-the-counter drugs, health and wellness products, and various healthcare services through its network of retail pharmacies and clinics. CVS Bay Area Inc. focuses on enhancing patient care and promoting health through its comprehensive product offerings and accessible healthcare solutions.

How the Company Makes Money

CVS Bay Area Inc. generates revenue through multiple streams, primarily from the sale of prescription medications and health products at its retail locations. The company also earns significant income from its pharmacy benefit management (PBM) services, which involve managing prescription drug benefits for employers and insurance companies. Additional revenue comes from in-store clinics that provide basic healthcare services, as well as partnerships with healthcare providers and organizations that enhance patient access to care. The growing demand for health and wellness products, coupled with strategic collaborations and an expanding customer base, further contributes to the company's financial performance.

CVS Bay Area Inc. Financial Statement Overview

Summary

CVS Bay Area Inc. has shown strong recovery in its income statement with significant revenue growth and improved profit margins. The balance sheet is stable with moderate leverage, but cash flow management remains a challenge with negative free cash flow. Overall, the company is on a positive trajectory, but attention to debt and cash flow is crucial.

Income Statement

CVS Bay Area Inc. has demonstrated a strong recovery in its income statement metrics. The company achieved a significant revenue growth rate of 4.03% from 2024 to 2025. Gross profit margin improved to 44.67%, and net profit margin increased to 14.36%, indicating enhanced profitability. The EBIT margin is at 5.39%, and EBITDA margin at 18.06%, reflecting operational efficiency. However, the company faced challenges in previous years with negative net income, which has been successfully turned around.

Balance Sheet

The balance sheet shows a stable financial position with a debt-to-equity ratio of 1.21, indicating moderate leverage. Return on equity improved significantly to 25.65%, showcasing effective use of equity capital. The equity ratio stands at 38.87%, reflecting a solid equity base. Despite the positive trajectory, the company still carries a substantial amount of debt, which could pose risks if not managed carefully.

Cash Flow

Cash flow analysis reveals some challenges, with a negative free cash flow of -1.08 billion in 2025. The operating cash flow to net income ratio is 0.37, indicating that cash generation from operations is not fully supporting net income. However, the company has shown resilience by improving its operating cash flow over the years. Continued focus on cash flow management is essential to sustain growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.82B	7.82B	7.52B	6.93B	7.21B	7.32B
Gross Profit	3.53B	3.49B	3.28B	2.73B	2.28B	1.97B
EBITDA	1.44B	1.41B	660.34M	195.64M	-618.08M	-999.78M
Net Income	1.12B	1.12B	697.62M	-13.53M	-831.52M	-1.16B
Balance Sheet
Total Assets	11.27B	11.27B	10.28B	8.68B	9.41B	10.51B
Cash, Cash Equivalents and Short-Term Investments	1.78B	1.78B	1.89B	1.77B	1.73B	1.94B
Total Debt	5.29B	5.29B	5.32B	4.48B	4.85B	4.88B
Total Liabilities	6.89B	6.89B	6.92B	5.94B	6.57B	6.79B
Stockholders Equity	4.38B	4.38B	3.36B	2.74B	2.83B	3.72B
Cash Flow
Free Cash Flow	0.00	-1.08B	-644.17M	-201.00M	-425.39M	-577.34M
Operating Cash Flow	0.00	410.52M	481.89M	-172.53M	-351.39M	120.76M
Investing Cash Flow	0.00	-384.36M	-1.08B	654.76M	232.76M	-341.04M
Financing Cash Flow	0.00	-129.65M	710.97M	-442.98M	-84.74M	550.89M

CVS Bay Area Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 596.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2687, the sentiment is Neutral. The current price of 596 is below the 20-day moving average (MA) of 610.54, above the 50-day MA of 586.09, and above the 200-day MA of 543.57, indicating a neutral trend. The MACD of 4.89 indicates Positive momentum. The RSI at 45.06 is Neutral, neither overbought nor oversold. The STOCH value of 3.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:2687.

CVS Bay Area Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2687	79 Outperform	¥2.94B	2.90		3.78%	4.04%	41.13%
9259	79 Outperform	¥4.18B	8.50		―	3.49%	16.08%
2747	62 Neutral	¥3.98B	66.63		1.59%	-1.50%	-81.02%
Sector *	62 Neutral	$20.32B	14.51	-3.18%	3.18%	1.92%	-6.57%
7515	48 Neutral	¥3.86B	595.71		0.72%	6.14%	-95.13%
5616	47 Neutral	¥2.94B	―		―	―	―
7544	―	¥4.39B	13.86		1.90%	―	―