Pepper Food Service Co., Ltd. (3053) AI Stock Analysis

• Market Cap: ¥11.42B
• Dividend Yield: N/A
• Average Volume (3M): 282.44K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.54
• Revenue Growth: 1.54%
• EPS Growth: -18.59%
• Country: JP
• Employees: 957
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 0.06
• Shares Outstanding: 61,424,000
• 10 Day Avg. Volume: 226,250
• 30 Day Avg. Volume: 282,440
• PEG Ratio: -3.34
• Price to Book (P/B): 3.06
• Price to Sales (P/S): 0.69
• P/FCF Ratio: 94.68
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 44 Neutral
• Price Target: ¥172.00 ▼(-8.02% Downside)

The overall stock score is primarily influenced by the company's financial performance, which shows some recovery but is hindered by declining revenue and cash flow volatility. Technical analysis indicates bearish momentum, and valuation metrics are unattractive due to a negative P/E ratio and lack of dividend yield.

Positive Factors

Debt Elimination

Eliminating debt strengthens the financial structure, reducing financial risk and improving the company's ability to invest in growth opportunities.

Cash Flow Improvement

Positive cash flow enhances financial stability and provides the company with resources to reinvest in its business and pursue strategic initiatives.

Gross Profit Margin Increase

Improved gross profit margin reflects enhanced operational efficiency, which can support sustainable profitability and competitive pricing strategies.

Negative Factors

Declining Revenue

Continued revenue decline suggests challenges in market demand or competitive positioning, which may hinder long-term growth and market share expansion.

Volatile Cash Flows

Volatile cash flows can disrupt financial planning and limit the company's ability to consistently fund operations and strategic investments.

Low Net Profit Margin

A low net profit margin indicates difficulties in converting revenue into actual profit, which may affect the company's ability to sustain operations and invest in growth.

Pepper Food Service Co., Ltd. Business Overview & Revenue Model

Company Description

Pepper Food Service Co., Ltd. operates restaurants in Japan and internationally. It operates through Pepper Lunch, Ikinari! Steak, Other Restaurants, and Own-brand products segments. The company owns and franchises restaurants primarily under the Pepper Lunch and Ikinari! Steak brands. It also franchises and operates other restaurants, such as Chargrilled Steak Kuni, a cut-to-order steak restaurant; Kodawari Tonkatsu Katsukitei, a pork cutlet restaurant; and Gyutan Natori, a beef tongue restaurant. In addition, the company sells various specialty products at restaurants and wholesale, including tonkatsu sauce, frozen pepper rice, dressings, steak sauce, and other food items; and through online comprising frozen Hamburg steak, frozen pepper rice, frozen beef tongue, the Ikinari! Steak set, dressings, steak sauce, and clear masks for food service workers. As of March 31, 2019, it operated 478 Pepper Lunch restaurants, including 56 directly-owned and 422 franchised; 439 Ikinari! Steak restaurants, such as 283 directly-owned and 156 franchised; and 15 other restaurants, as well as contracted with 41 separate outsourced operators. The company was founded in 1970 and is based in Tokyo, Japan.

How the Company Makes Money

Pepper Food Service Co., Ltd. generates revenue primarily through the operation of its various restaurant brands and franchises. The company's revenue model is centered on sales from food and beverage services, which includes dine-in, takeaway, and delivery options. Key revenue streams come from both company-owned and franchised outlets, with a significant portion of earnings derived from franchise fees and royalties from franchisees. Additionally, strategic partnerships with suppliers and promotional collaborations enhance its market presence and drive sales. The company also benefits from economies of scale in procurement, which helps to improve profit margins.

Pepper Food Service Co., Ltd. Financial Statement Overview

Summary

Pepper Food Service Co., Ltd. has shown improvements in financial health with positive net income and cash flow in 2024 and eliminated debt. However, declining revenue and historically volatile cash flows pose challenges to long-term growth.

Income Statement

Pepper Food Service Co., Ltd. showed improvements in its net income, turning positive in 2024 after several years of losses. The gross profit margin increased to 59.3% in 2024, indicating better cost management. However, revenue has been declining from 2019 to 2024, impacting overall growth potential. The net profit margin remains low at 0.2% in 2024, reflecting challenges in achieving profitability.

Balance Sheet

The company's debt-to-equity ratio improved significantly, as it eliminated total debt by 2024, reflecting a more robust financial structure. The equity ratio stands at 55.9%, showing a strong equity base relative to total assets. Despite these strengths, the overall asset base has decreased, indicating potential limitations in growth capacity.

Cash Flow

Operating cash flow turned positive in 2024, contributing to a positive free cash flow, which marks a recovery from negative cash flows in prior years. The operating cash flow to net income ratio is high at 7.5 in 2024, indicating strong cash generation relative to net income. However, the historical volatility in cash flows poses a risk to ongoing financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.59B	13.99B	14.59B	14.78B	18.95B	31.09B
Gross Profit	8.26B	8.11B	8.10B	8.07B	8.90B	12.27B
EBITDA	-399.00M	251.00M	-400.00M	-1.22B	1.15B	-1.64B
Net Income	-710.00M	28.00M	-710.00M	-1.93B	387.00M	-3.95B
Balance Sheet
Total Assets	5.64B	5.64B	5.64B	6.22B	10.90B	14.45B
Cash, Cash Equivalents and Short-Term Investments	2.12B	2.18B	2.12B	1.89B	4.36B	5.59B
Total Debt	560.00M	10.00M	557.00M	1.77B	4.07B	6.68B
Total Liabilities	3.10B	2.49B	3.10B	4.93B	7.61B	13.99B
Stockholders Equity	2.54B	3.15B	2.54B	1.29B	3.29B	455.00M
Cash Flow
Free Cash Flow	458.00M	102.00M	-485.00M	-90.00M	-687.00M	-7.43B
Operating Cash Flow	458.00M	210.00M	-445.00M	-44.00M	-658.00M	-7.16B
Investing Cash Flow	0.00	-169.00M	-62.00M	-146.00M	-404.00M	8.07B
Financing Cash Flow	0.00	17.00M	740.00M	-2.27B	-171.00M	2.26B

Pepper Food Service Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 187.00
• 50DMA: Positive
• 100DMA: Positive
• 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:3053, the sentiment is Positive. The current price of 187 is above the 20-day moving average (MA) of 185.30, above the 50-day MA of 182.68, and below the 200-day MA of 196.68, indicating a neutral trend. The MACD of 1.18 indicates Negative momentum. The RSI at 58.64 is Neutral, neither overbought nor oversold. The STOCH value of 33.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3053.

Pepper Food Service Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3082	64 Neutral	¥10.58B	27.94	―	0.78%	10.30%	1.56%
3063	62 Neutral	¥9.66B	112.83	―	0.51%	17.38%	-86.95%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3547	57 Neutral	¥21.68B	22.97	―	0.75%	25.41%	77.18%
3418	56 Neutral	¥10.91B	23.77	―	0.74%	6.26%	-4.84%
3175	52 Neutral	¥12.03B	22.93	―	―	3.90%	―
3053	44 Neutral	¥11.42B	-95.56	―	―	1.54%	-18.59%