Can Do Co., Ltd. (2698) AI Stock Analysis

• Market Cap: ¥54.76B
• Dividend Yield: 0.51%
• Average Volume (3M): 16.76K
• Price to Earnings (P/E): 88.8
• Beta (1Y): 0.48
• Revenue Growth: 2.90%
• EPS Growth: N/A
• Country: JP
• Employees: 590
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Department Stores
• EPS (TTM): -0.96
• Shares Outstanding: 16,770,200
• 10 Day Avg. Volume: 21,640
• 30 Day Avg. Volume: 16,760
• PEG Ratio: 4.93
• Price to Book (P/B): 4.97
• Price to Sales (P/S): 0.62
• P/FCF Ratio: -471.16
• 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: 48 Neutral
• Price Target: ¥3,524.00 ▲(2.74% Upside)

The overall stock score of 48 reflects significant challenges in financial performance, particularly in profitability and cash flow management. Technical analysis provides mixed signals, with a lack of strong momentum and potential overbought conditions. The valuation indicates the stock may be overvalued, with a high P/E ratio and low dividend yield. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Revenue Growth

Steady revenue growth indicates the company's ability to expand its market presence and maintain customer interest in its products, supporting long-term business sustainability.

Business Model

The direct-to-consumer model enhances market reach and customer engagement, facilitating growth in both online and retail sales, which is crucial for long-term competitiveness.

Product Innovation

Continuous investment in product innovation helps maintain a competitive edge and drive sales growth, ensuring the company's offerings remain relevant and appealing to consumers.

Negative Factors

Profitability Challenges

Ongoing profitability challenges, indicated by a negative net profit margin, can hinder the company's ability to reinvest in growth and sustain operations, affecting long-term viability.

Cash Flow Issues

Weak cash flow generation limits financial flexibility and the ability to invest in growth opportunities, posing risks to the company's long-term financial health.

Negative Return on Equity

A negative return on equity indicates inefficient use of shareholder funds, which can deter investment and impact the company's ability to finance future growth.

Can Do Co., Ltd. Business Overview & Revenue Model

Company Description

Can Do Co., Ltd. operates a chain of retail stores in Japan. Its stores provide Japanese traditional items, including knick-knacks, hand towels, and toys; kitchen goods, such as microwave cooking items, storage containers and cleaning kits, and glass cutting boards; stationery and office supplies comprising stackable baskets, collage items, and roller stamps and shredder scissors; and bath and restroom articles consisting of shirring towels, bathing items, and toilet seat covers. The company's stores also offer cleaning and washing articles, including adhesive tape carpet cleaning rollers, handy mops with animal motifs, and cleaning brushes; health and beauty goods, such as alcohol-based bactericide gels, massage items, and nail stickers; belts and neckties, socks, and shopping bags; and interior decoration items comprising ornamental houseplants, interior decorating gels, and solar-powered toys. In addition, its stores provide home articles, including fluffy joint mats, stackable shoe cases, and DIY items; digital goods, such as smartphone items, LED lights, and padded cases; and food products comprising sweets, dried fruits, and supplements. Further, the company engages in the wholesale trade with franchisees. It operates approximately 1008 retail stores. The company was founded in 1993 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Can Do Co., Ltd. generates revenue through multiple streams, primarily from the sales of its consumer products across retail and online platforms. The company employs a direct-to-consumer model, leveraging e-commerce to reach a broader audience while maintaining partnerships with major retailers for brick-and-mortar sales. Key revenue streams include product sales, licensing agreements for branded merchandise, and collaborations with other companies for co-branded offerings. Additionally, Can Do Co., Ltd. invests in market research and product development to ensure a steady pipeline of innovative products, which helps to maintain its competitive edge and drive sales growth.

Can Do Co., Ltd. Financial Statement Overview

Summary

Can Do Co., Ltd. is experiencing growth in revenue but faces significant challenges in profitability and cash flow generation. The balance sheet shows a moderate level of debt, but the negative return on equity and cash flow issues indicate financial instability. The company needs to focus on improving profitability and cash flow management to enhance its financial health.

Income Statement

Can Do Co., Ltd. has shown a modest revenue growth rate of 3.76% in the latest year, indicating a positive trend in sales. However, the company is struggling with profitability, as evidenced by a negative net profit margin of -0.20% and a declining EBIT margin. The gross profit margin remains relatively stable at 37.99%, suggesting some efficiency in managing production costs. Overall, the income statement reflects growth in revenue but challenges in achieving profitability.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 0.37, indicating a balanced approach to leveraging. However, the return on equity is negative at -1.56%, reflecting the company's struggles with profitability. The equity ratio stands at 35.47%, suggesting a reasonable level of financial stability. While the company maintains a manageable level of debt, the negative ROE highlights ongoing profitability issues.

Cash Flow

The cash flow statement reveals challenges in cash generation, with a negative free cash flow growth rate of -107.35%. The operating cash flow to net income ratio is 0.13, indicating some ability to convert income into cash, but the negative free cash flow to net income ratio of -0.06 highlights cash flow difficulties. Overall, the cash flow position is weak, with significant room for improvement in generating positive cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	84.98B	83.38B	80.36B	73.72B	73.13B	73.03B
Gross Profit	32.48B	31.68B	28.53B	27.82B	27.99B	28.00B
EBITDA	2.81B	1.41B	1.33B	1.81B	2.54B	3.34B
Net Income	805.00M	-163.00M	-459.00M	-176.00M	194.00M	440.00M
Balance Sheet
Total Assets	34.24B	29.38B	29.85B	29.71B	28.04B	28.38B
Cash, Cash Equivalents and Short-Term Investments	5.13B	2.03B	2.83B	3.95B	3.16B	4.28B
Total Debt	3.90B	3.90B	3.80B	800.00M	17.00M	0.00
Total Liabilities	23.33B	18.96B	18.46B	17.55B	15.53B	15.81B
Stockholders Equity	10.91B	10.42B	11.39B	12.16B	12.51B	12.57B
Cash Flow
Free Cash Flow	0.00	-110.00M	-2.59B	507.00M	-664.00M	638.00M
Operating Cash Flow	0.00	1.89B	-899.00M	1.47B	1.17B	2.06B
Investing Cash Flow	0.00	-2.51B	-2.11B	-1.20B	-2.02B	-1.70B
Financing Cash Flow	0.00	-173.00M	2.72B	522.00M	-272.00M	-271.00M

Can Do Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3430.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2698, the sentiment is Negative. The current price of 3430 is above the 20-day moving average (MA) of 3417.25, below the 50-day MA of 3458.30, and below the 200-day MA of 3549.04, indicating a neutral trend. The MACD of 2.37 indicates Negative momentum. The RSI at 47.92 is Neutral, neither overbought nor oversold. The STOCH value of 68.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:2698.

Can Do Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8237	66 Neutral	¥95.09B	104.46	―	0.83%	1.38%	-87.76%
8244	65 Neutral	¥74.62B	12.92	―	1.09%	7.55%	89.45%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
9946	53 Neutral	¥62.20B	-8.84	―	0.94%	10.66%	-218.40%
7601	51 Neutral	¥2.13B	9.96	―	―	-3.64%	-23.60%
2698	48 Neutral	¥54.76B	88.80	―	0.51%	2.90%	―
8217	45 Neutral	¥34.31B	-17.00	―	3.11%	1.46%	-436.55%