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

• Market Cap: ¥4.84B
• Dividend Yield: 3.47%
• Average Volume (3M): 4.40K
• Price to Earnings (P/E): 8.2
• Beta (1Y): 0.30
• Revenue Growth: -11.32%
• EPS Growth: 1.10%
• Country: JP
• Employees: 161
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 34.52
• 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: ¥1,246.00 ▲(6.77% Upside)
• Action: Upgraded Date: 10/09/25
• Date: Action: Upgraded 10/09/25

The overall score of 70 is primarily driven by an attractive valuation, featuring a low P/E ratio and a high dividend yield, which provides a strong appeal for value and income investors. This is supported by the company's robust financial stability, anchored by a very strong balance sheet with minimal debt and consistent cash flow generation. However, the score is constrained by significant concerns regarding financial performance, specifically the persistent decline in revenue and profit margins, which indicates underlying operational challenges. Technical indicators are currently neutral, suggesting a period of consolidation for the stock.

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

The score reflects a mixed financial profile. A very strong balance sheet with minimal debt and robust cash flow generation provide significant stability. However, these strengths are offset by a weak income statement, characterized by declining revenues and shrinking profit margins, which raises concerns about future growth.

Income Statement

The company's income statement reveals significant challenges in growth and profitability. Revenue has been on a downward trend, with a Revenue Growth Rate of -6.3% in the most recent annual period, following a decline in the prior year. This top-line contraction is coupled with eroding profitability, as key metrics like Gross Profit Margin (35.8%), Net Profit Margin (3.1%), and EBITDA Margin (5.4%) have all shown a consistent decline over the past several years. While the company remains profitable, the negative trajectory in both sales and margins indicates considerable operational headwinds.

Balance Sheet

The balance sheet stands out as a key area of strength, characterized by a very conservative and robust capital structure. The Debt-to-Equity Ratio is exceptionally low at 0.14, indicating minimal reliance on debt financing and low financial risk. Furthermore, a strong Equity Ratio of 73.3% highlights a solid asset base funded primarily by equity. The main weakness is a declining Return on Equity (ROE) of 5.6%, which reflects the profitability issues seen on the income statement. Overall, the company's strong solvency and financial stability provide a significant cushion against operational challenges.

Cash Flow

Cash flow performance is strong, demonstrating the company's ability to generate cash effectively. The Operating Cash Flow to Net Income ratio is a healthy 1.47, indicating high-quality earnings where actual cash generated significantly exceeds reported net income. Similarly, the Free Cash Flow to Net Income ratio of 1.39 underscores a strong capacity to fund operations and investments internally. While Free Cash Flow Growth has been volatile historically, the consistent generation of positive operating and free cash flow is a notable strength, signaling solid operational liquidity.

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	8.82B	9.05B	8.63B	8.33B	8.36B
Cash, Cash Equivalents and Short-Term Investments	3.13B	2.90B	2.68B	2.32B	2.67B
Total Debt	918.00M	1.02B	663.00M	815.00M	1.01B
Total Liabilities	2.39B	2.76B	2.46B	2.54B	2.90B
Stockholders Equity	6.43B	6.29B	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: Negative
• Last Price: 1167.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 Negative. The current price of 1167 is above the 20-day moving average (MA) of 1145.10, above the 50-day MA of 1153.20, and above the 200-day MA of 1136.21, indicating a bearish trend. The MACD of -4.26 indicates Positive momentum. The RSI at 42.21 is Neutral, neither overbought nor oversold. The STOCH value of 43.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥7.87B	2.45	―	2.66%	15.17%	12.30%
8005	74 Outperform	¥44.39B	18.73	―	4.27%	6.15%	-25.28%
3134	74 Outperform	¥7.44B	-522.29	―	2.05%	13.52%	-42.59%
3172	70 Outperform	¥4.84B	8.24	―	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	13.21	―	1.76%	2.24%	―
3660	59 Neutral	¥40.59B	20.81	14.53%	0.21%	23.01%	34.28%