Tea Life Co., Ltd. (3172) AI Stock Analysis

• Market Cap: ¥4.99B
• Dividend Yield: 3.47%
• Average Volume (3M): 4.40K
• Price to Earnings (P/E): 14.8
• Beta (1Y): 0.31
• Revenue Growth: -11.32%
• EPS Growth: 1.10%
• Country: JP
• Employees: 161
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 2.98
• Shares Outstanding: 4,273,600
• 10 Day Avg. Volume: 3,340
• 30 Day Avg. Volume: 4,400
• PEG Ratio: 1.13
• Price to Book (P/B): 0.74
• Price to Sales (P/S): 0.42
• P/FCF Ratio: 9.57
• 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: 70 Outperform
• Price Target: ¥1,247.00 ▲(6.86% Upside)
• Action: Upgraded Date: 10/09/25
• Date: Action: Upgraded 10/09/25

Tea Life Co., Ltd. has a stable financial foundation with strong cash flow generation and low leverage, which are significant strengths. The stock's reasonable valuation and attractive dividend yield further enhance its appeal. However, the decline in revenue growth and past volatility in cash flow are concerns that need to be addressed. Technical indicators suggest a mild upward trend, supporting a positive outlook.

Positive Factors

Strong Cash Flow Generation

Strong cash flow generation indicates robust operational efficiency, providing the company with the flexibility to invest in growth opportunities and withstand economic downturns.

Low Leverage

Low leverage enhances financial stability, reducing risk and interest burden, and allowing the company to focus resources on strategic initiatives.

Stable Profit Margins

Stable profit margins demonstrate the company's ability to manage costs effectively, ensuring profitability even amidst revenue fluctuations.

Negative Factors

Declining Revenue Growth

Declining revenue growth poses a challenge to long-term sustainability, potentially impacting market share and competitive positioning if not addressed.

Past Volatility in Free Cash Flow

Volatility in free cash flow can lead to uncertainty in funding strategic initiatives, potentially affecting the company's ability to capitalize on growth opportunities.

Moderate Return on Equity

A moderate return on equity suggests limited efficiency in generating profits from shareholders' investments, which could impact investor confidence over time.

Tea Life Co., Ltd. Business Overview & Revenue Model

Company Description

Tea Life Co., Ltd. engages in the Internet and catalog sale of health tea, health foods, cosmetics, medicines, etc. in Japan. The company was founded in 1983 and is headquartered in Shimada, Japan.

How the Company Makes Money

Tea Life Co., Ltd. generates revenue through multiple streams primarily centered around the sale of its tea products. The company earns money by selling its products directly to consumers through retail outlets and online platforms, as well as through wholesale agreements with distributors and retailers. Additional revenue is derived from partnerships with cafes and restaurants that feature Tea Life's products on their menus. The company's focus on premium and specialty teas allows it to maintain higher price points, thus contributing to its profitability. Seasonal promotions, subscription services, and educational workshops on tea brewing and tasting also serve as significant revenue avenues, enhancing customer engagement and loyalty.

Tea Life Co., Ltd. Financial Statement Overview

Summary

Tea Life Co., Ltd. demonstrates a stable financial position with strong equity and manageable debt levels. While profitability metrics are stable, the recent decline in revenue growth is a concern. The company shows strong cash flow generation, but past volatility in free cash flow growth requires attention.

Income Statement

Tea Life Co., Ltd. has experienced a decline in revenue over the past year, with a revenue growth rate of -6.31%. Despite this, the company maintains a stable gross profit margin of 35.84% and a net profit margin of 3.11%. The EBIT and EBITDA margins are moderate at 3.96% and 5.39%, respectively. The company shows resilience in maintaining profitability, but the declining revenue is a concern.

Balance Sheet

The balance sheet of Tea Life Co., Ltd. is relatively strong, with a low debt-to-equity ratio of 0.14, indicating low leverage. The return on equity is modest at 5.57%, reflecting moderate efficiency in generating profits from shareholders' equity. The equity ratio stands at 73.27%, suggesting a solid equity base relative to total assets, which enhances financial stability.

Cash Flow

Tea Life Co., Ltd. has shown significant improvement in free cash flow, with a growth rate of 'Infinity' due to a previous negative value. The operating cash flow to net income ratio is 0.48, indicating decent cash generation relative to net income. The free cash flow to net income ratio is high at 0.95, suggesting strong cash flow relative to earnings, although past fluctuations in free cash flow growth pose some risk.

Breakdown	Jul 2025	Jul 2024	Jul 2023	Jul 2022	Jul 2021
Income Statement
Total Revenue	11.50B	13.00B	13.46B	12.74B	11.72B
Gross Profit	4.12B	4.45B	4.67B	4.95B	5.44B
EBITDA	620.00M	733.00M	1.10B	936.00M	1.01B
Net Income	358.00M	319.00M	599.00M	566.00M	704.00M
Balance Sheet
Total Assets	8.78B	8.98B	8.57B	8.27B	8.31B
Cash, Cash Equivalents and Short-Term Investments	3.12B	2.90B	2.68B	2.32B	2.67B
Total Debt	918.00M	1.02B	663.00M	815.00M	1.01B
Total Liabilities	2.35B	2.70B	2.40B	2.48B	2.85B
Stockholders Equity	6.43B	6.28B	6.17B	5.79B	5.46B
Cash Flow
Free Cash Flow	499.00M	242.00M	636.00M	220.00M	905.00M
Operating Cash Flow	526.00M	329.00M	704.00M	380.00M	964.00M
Investing Cash Flow	-544.00M	-139.00M	-3.00M	-296.00M	121.00M
Financing Cash Flow	-270.00M	133.00M	-422.00M	-438.00M	-349.00M

Tea Life Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1167.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3172, the sentiment is Positive. The current price of 1167 is above the 20-day moving average (MA) of 1154.30, above the 50-day MA of 1155.04, and above the 200-day MA of 1135.26, indicating a bullish trend. The MACD of 0.18 indicates Negative momentum. The RSI at 59.97 is Neutral, neither overbought nor oversold. The STOCH value of 62.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3172.

Tea Life Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3560	78 Outperform	¥8.31B	13.89	―	2.66%	15.17%	12.30%
8005	74 Outperform	¥47.99B	18.83	―	4.27%	6.15%	-25.28%
3134	74 Outperform	¥8.27B	9.07	―	2.05%	13.52%	-42.59%
3172	70 Outperform	¥4.99B	14.82	―	3.47%	-11.32%	1.10%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3396	60 Neutral	¥5.71B	10.64	―	1.76%	2.24%	―
3660	59 Neutral	¥48.32B	17.51	14.53%	0.21%	23.01%	34.28%