Towa Food Service Co., Ltd. (3329) AI Stock Analysis

• Market Cap: ¥17.09B
• Dividend Yield: 0.96%
• Average Volume (3M): 5.35K
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.08
• Revenue Growth: 3.21%
• EPS Growth: 1.96%
• Country: JP
• Employees: 205
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): N/A
• Shares Outstanding: 8,186,400
• 10 Day Avg. Volume: 5,020
• 30 Day Avg. Volume: 5,346
• PEG Ratio: 9.82
• Price to Book (P/B): 2.34
• Price to Sales (P/S): 1.31
• P/FCF Ratio: 35.21
• 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: 61 Neutral
• Price Target: ¥2,171.00 ▲(3.88% Upside)

The overall stock score is primarily influenced by strong financial performance, despite low net profit margins and cash flow concerns. Technical analysis indicates bearish momentum, which negatively impacts the score. Valuation is moderate, with a reasonable P/E ratio but low dividend yield.

Positive Factors

Revenue Growth

The strong revenue growth indicates Towa Food Service's successful market expansion and product adoption, which is crucial for long-term business sustainability.

Balance Sheet Health

A strong balance sheet with minimal leverage provides Towa Food Service with financial stability and flexibility to invest in growth opportunities.

Gross Profit Margin

A high gross profit margin reflects efficient cost management, allowing Towa Food Service to maintain profitability even with competitive pricing pressures.

Negative Factors

Net Profit Margin

A low net profit margin indicates that Towa Food Service may face challenges in converting revenue into profit, which could impact long-term profitability.

Cash Flow Concerns

Concerns about cash flow conversion suggest potential challenges in liquidity management, which could limit Towa Food Service's ability to invest in growth.

Free Cash Flow Decline

A decline in free cash flow growth may hinder Towa Food Service's capacity to fund new projects or return capital to shareholders, affecting future growth prospects.

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

Company Description

Towa Food Service Co., Ltd. operates a chain of cafes and restaurants in Japan. The company was founded in 1974 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Towa Food Service generates revenue through multiple streams, primarily from the sale of food products to businesses in the food service industry. The company has established strong partnerships with local farms and food manufacturers to source high-quality ingredients, allowing it to offer competitive pricing and a diverse product range. Additionally, Towa Food Service may engage in value-added services such as menu consulting and logistics support for its clients, contributing to its revenue. The company's focus on building long-term relationships with clients in the restaurant and hospitality sectors also plays a key role in ensuring consistent sales and repeat business.

Towa Food Service Co., Ltd. Financial Statement Overview

Summary

Towa Food Service Co., Ltd. shows strong revenue growth and a solid balance sheet with minimal leverage. However, the net profit margin is relatively low, and there are concerns about cash flow conversion.

Income Statement

Towa Food Service Co., Ltd. has demonstrated strong revenue growth, particularly in the last two years, with a significant increase of 71.3% in the most recent year. The company maintains a high gross profit margin of over 73%, indicating efficient cost management. However, the net profit margin is relatively low at 5.62%, suggesting room for improvement in profitability. The EBIT and EBITDA margins are healthy, reflecting good operational efficiency.

Balance Sheet

The company exhibits a strong balance sheet with a very low debt-to-equity ratio of 0.0018, indicating minimal leverage and financial risk. The return on equity is solid at 10.05%, showcasing effective use of shareholder funds. The equity ratio is high, suggesting a stable financial structure with significant equity backing.

Cash Flow

Cash flow analysis shows a robust operating cash flow, although there was a decline in free cash flow growth in the latest year. The operating cash flow to net income ratio is healthy, but the free cash flow to net income ratio indicates that not all earnings are translating into free cash flow, which could be a concern for cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.94B	12.81B	12.38B	10.85B	8.25B	7.03B
Gross Profit	9.45B	9.37B	9.02B	7.86B	5.82B	4.93B
EBITDA	1.40B	1.39B	1.38B	991.18M	1.53B	378.38M
Net Income	731.37M	720.70M	704.40M	425.78M	698.95M	-61.10M
Balance Sheet
Total Assets	9.11B	9.17B	8.72B	8.44B	8.52B	7.11B
Cash, Cash Equivalents and Short-Term Investments	4.27B	4.36B	4.02B	3.82B	3.70B	2.08B
Total Debt	11.00M	13.25M	18.18M	605.46M	604.49M	609.35M
Total Liabilities	1.87B	2.00B	2.10B	2.43B	2.84B	2.08B
Stockholders Equity	7.24B	7.17B	6.62B	6.02B	5.68B	5.04B
Cash Flow
Free Cash Flow	0.00	477.12M	975.35M	232.25M	1.76B	-163.37M
Operating Cash Flow	0.00	943.56M	1.32B	645.73M	1.86B	-69.89M
Investing Cash Flow	0.00	-735.92M	-401.37M	-832.69M	-1.47B	193.32M
Financing Cash Flow	0.00	-166.32M	-723.29M	-91.10M	-65.38M	35.56M

Towa Food Service Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2090.00
• 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:3329, the sentiment is Positive. The current price of 2090 is above the 20-day moving average (MA) of 2088.10, above the 50-day MA of 2067.92, and above the 200-day MA of 2086.99, indicating a bullish trend. The MACD of 12.88 indicates Negative momentum. The RSI at 71.10 is Negative, neither overbought nor oversold. The STOCH value of 96.53 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3329.

Towa Food Service Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7554	65 Neutral	¥22.07B	21.10	―	―	―	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3329	61 Neutral	¥17.09B	23.74	―	0.96%	3.21%	1.96%
7562	59 Neutral	¥17.17B	46.08	―	0.41%	0.55%	-62.17%
3075	58 Neutral	¥22.06B	31.33	―	0.77%	―	―
3068	54 Neutral	¥20.73B	-54.03	―	0.54%	1.09%	-128.63%
2694	45 Neutral	¥16.90B	-23.33	―	0.70%	2.26%	-335.39%