OOTOYA Holdings Co., Ltd. (2705) AI Stock Analysis

• Market Cap: ¥53.01B
• Dividend Yield: 0.17%
• Average Volume (3M): 4.45K
• Price to Earnings (P/E): 39.6
• Beta (1Y): 0.27
• Revenue Growth: 15.53%
• EPS Growth: -26.93%
• Country: JP
• Employees: 629
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 37.39
• Shares Outstanding: 7,263,300
• 10 Day Avg. Volume: 4,260
• 30 Day Avg. Volume: 4,450
• PEG Ratio: -3.10
• Price to Book (P/B): 8.24
• Price to Sales (P/S): 1.18
• P/FCF Ratio: 54.03
• 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: 66 Neutral
• Price Target: ¥8,057.00 ▲(44.13% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is driven primarily by solid financial recovery and improved balance-sheet leverage, partially offset by weaker free cash flow and a slight net income decline. Technically, the uptrend is strong but appears overbought, and valuation is pressured by a high P/E despite a very high dividend yield.

Positive Factors

Revenue growth trend

Revenue expanded consistently through 2021–2025 with a 12.5% gain year-over-year into 2025, indicating durable demand for OOTOYA’s restaurants. Sustained top-line growth supports scale economics, reinvestment in stores, and a longer-term path to improving operating leverage and margins.

Stable gross margins

A gross profit margin near 58% reflects resilient unit economics for its teishoku offering and effective cost control. Stable gross margins provide persistent protection against input cost swings and are a durable foundation for delivering consistent operating profitability as revenue scales.

Improved balance-sheet leverage

Leverage improved materially (D/E from 2.79 to 0.36) and equity ratio rose to 37.7%, strengthening financial flexibility. Lower leverage reduces refinancing and interest risk, enabling the company to fund capex, remodels or modest expansion without jeopardizing solvency over the medium term.

Negative Factors

Weakened free cash flow generation

Free cash flow fell from 2024 to 2025 and the FCF-to-net-income ratio declined, reducing internally generated liquidity. Persistently weaker FCF limits the company’s ability to self-fund capex, pay dividends or reduce debt, raising structural funding and liquidity risk over coming quarters.

Slight net income decline

Net income dipped in 2025 despite revenue growth, compressing profitability. A falling bottom line erodes retained earnings and ROE, making it harder to finance growth internally and signaling that revenue gains have not yet fully translated into durable net profit expansion.

Negative EPS growth

Reported EPS growth is negative (~-13.94%), indicating per-share earnings contraction. Persistent EPS weakness suggests pressure on per-share profitability from margin or non-operating items, which can limit dividend sustainability and shareholder return over multiple reporting periods.

OOTOYA Holdings Co., Ltd. Business Overview & Revenue Model

Company Description

OOTOYA Holdings Co., Ltd., together with its subsidiaries, plans, manages, and operates a chain of restaurants in Japan and internationally. Its restaurants primarily offer set meals and boxed lunches. The company was founded in 1958 and is headquartered in Yokohama, Japan. OOTOYA Holdings Co., Ltd. is a subsidiary of Colowide Co.,Ltd.

How the Company Makes Money

OOTOYA Holdings generates revenue primarily through the operation of its restaurant chain, where it earns income from food and beverage sales. The company's revenue model is based on a combination of dine-in, takeout, and delivery services, catering to various customer preferences. Key revenue streams include sales from its restaurant locations, which are strategically positioned in urban areas to attract a high volume of customers. Additionally, OOTOYA may benefit from partnerships with food suppliers, which can help to ensure cost-effective sourcing of high-quality ingredients. The company also explores opportunities in expanding its brand through franchising and licensing, which can provide additional revenue channels outside of direct restaurant operations.

OOTOYA Holdings Co., Ltd. Financial Statement Overview

Summary

Financial statements show improving revenue and a turnaround to positive profitability, with stable gross margins (~58%) and better leverage (debt-to-equity down to 0.36). Offsetting this, net income dipped in 2025 versus 2024 and free cash flow weakened, raising some sustainability and liquidity risk.

Income Statement

OOTOYA Holdings Co., Ltd. has shown a consistent improvement in revenue from 2021 to 2025, with a significant revenue growth rate of 12.5% between 2024 and 2025. The net profit margin has improved from negative figures in 2021 to 3.9% in 2025. The gross profit margin is stable at around 58%, indicating effective cost management. However, net income decreased slightly in 2025 compared to 2024, which is a point of concern.

Balance Sheet

The company's debt-to-equity ratio has improved, dropping from 2.79 in 2021 to 0.36 in 2025, showing better leverage management. The equity ratio has increased to 37.7% in 2025, indicating a healthy balance between debt and equity. However, the return on equity (ROE) was 27.3% in 2025, which is lower than the previous year due to the decrease in net income.

Cash Flow

Free cash flow showed variability with a decrease from 2024 to 2025. Despite this, the operating cash flow remains positive, with a solid operating cash flow to net income ratio of 1.73 in 2025. The free cash flow to net income ratio decreased, reflecting reduced free cash flow generation, which poses a risk to liquidity.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	32.68B	31.39B	27.89B	23.85B	18.83B	16.14B
Gross Profit	18.75B	18.27B	16.58B	13.47B	10.86B	8.87B
EBITDA	2.17B	2.08B	1.94B	772.00M	1.88B	-3.94B
Net Income	1.19B	1.23B	1.40B	276.00M	1.91B	-4.67B
Balance Sheet
Total Assets	10.12B	11.87B	10.85B	9.60B	9.81B	9.11B
Cash, Cash Equivalents and Short-Term Investments	2.61B	4.24B	4.54B	3.94B	4.33B	3.67B
Total Debt	1.45B	1.60B	1.00B	1.65B	2.31B	3.91B
Total Liabilities	6.83B	7.16B	5.90B	5.89B	6.39B	7.63B
Stockholders Equity	3.06B	4.48B	4.78B	3.59B	3.34B	1.40B
Cash Flow
Free Cash Flow	0.00	683.00M	1.43B	200.00M	2.17B	-3.21B
Operating Cash Flow	0.00	2.13B	2.23B	726.00M	2.35B	-2.70B
Investing Cash Flow	0.00	-1.49B	-787.00M	-478.00M	-160.00M	-496.00M
Financing Cash Flow	0.00	-1.05B	-889.00M	-773.00M	-1.59B	4.98B

OOTOYA Holdings Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5590.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2705, the sentiment is Positive. The current price of 5590 is below the 20-day moving average (MA) of 7024.00, below the 50-day MA of 6527.20, and below the 200-day MA of 5762.20, indicating a bullish trend. The MACD of 265.65 indicates Negative momentum. The RSI at 71.67 is Negative, neither overbought nor oversold. The STOCH value of 84.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2705.

OOTOYA Holdings Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7581	72 Outperform	¥329.42B	22.28	9.66%	0.55%	14.33%	36.83%
2705	66 Neutral	¥53.01B	39.57	―	0.17%	15.53%	-26.93%
3197	63 Neutral	¥796.26B	63.08	9.53%	0.55%	15.58%	60.90%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7550	59 Neutral	¥1.53T	28.68	15.82%	0.78%	11.29%	-4.88%
9887	57 Neutral	¥114.96B	15.35	―	0.37%	20.44%	13.71%
9861	53 Neutral	¥198.92B	72.52	―	0.69%	10.75%	-14.28%