cotta Co., Ltd. (3359) AI Stock Analysis

• Market Cap: ¥6.27B
• Dividend Yield: 2.03%
• Average Volume (3M): 55.65K
• Price to Earnings (P/E): 13.2
• Beta (1Y): 0.51
• Revenue Growth: 52.77%
• EPS Growth: 28.19%
• Country: JP
• Employees: 111
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Packaging & Containers
• EPS (TTM): 17.22
• Shares Outstanding: 11,223,513
• 10 Day Avg. Volume: 25,110
• 30 Day Avg. Volume: 55,653
• PEG Ratio: 0.46
• Price to Book (P/B): 1.30
• Price to Sales (P/S): 0.42
• P/FCF Ratio: 7.39
• 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): 47.6
• Revenue Forecast (FY): ¥15.20B

• Rating: 69 Neutral
• Price Target: ¥632.00 ▲(24.17% Upside)
• Action: Reiterated Date: 12/11/25
• Date: Action: Reiterated 12/11/25

The stock's overall score is driven by a strong valuation, with a low P/E ratio and attractive dividend yield. However, financial performance is hindered by declining profit margins and increased leverage. Technical indicators show weak momentum, which could impact short-term performance.

Positive Factors

Revenue Growth

Sustained revenue growth indicates expanding demand for its confectionery and bakery supplies. Over 2-6 months this supports scale benefits, distribution leverage (including e-commerce), and the ability to invest in inventory and service capabilities to deepen customer relationships.

Cash Generation

High free cash flow relative to net income shows the business reliably converts earnings to cash. This durable cash generation supports reinvestment, dividend funding, and potential debt reduction, improving financial flexibility over the medium term.

Operational Efficiency / Stable Margins

Stable EBIT/EBITDA margins indicate consistent core operating performance and control over direct costs. For a niche supplier to bakeries/confectioners, this operational resilience supports predictable profitability and competitive service levels across business cycles.

Negative Factors

Margin Pressure

Eroding gross margin and a thin net margin reduce the company’s buffer against cost shocks and competitive pricing. Over months, margin pressure limits reinvestment capacity and heightens sensitivity to commodity or input cost volatility in the packaging/ingredients supply chain.

Rising Leverage

Higher leverage raises financial risk and reduces strategic flexibility. With a near 0.9 debt/equity and only moderate ROE, persistent elevated debt can increase interest burden and constrain capital allocation, making long-term investment or downturn management harder.

Weak Cash Conversion

Low operating cash conversion suggests earnings are not translating into cash, possibly due to working capital needs. This structural conversion weakness can strain liquidity, hamper debt reduction, and limit sustainable funding for growth or dividends over several months.

cotta Co., Ltd. Business Overview & Revenue Model

Company Description

cotta Co., Ltd. (3359) is a leading Japanese company specializing in the e-commerce sector, focusing primarily on the sale of baking and cooking supplies. The company offers a wide range of products, including baking ingredients, kitchen tools, and accessories, catering to both professional chefs and home bakers. cotta also provides a platform for sharing recipes and baking ideas, enhancing its community engagement and customer loyalty.

How the Company Makes Money

cotta Co., Ltd. generates revenue primarily through its e-commerce sales of baking and cooking supplies. The company has established a robust online platform where customers can purchase various products, including ingredients and tools essential for baking and cooking. Key revenue streams include direct sales from their website, subscription services for regular customers, and partnerships with manufacturers to distribute exclusive products. Additionally, cotta may benefit from advertising revenues by featuring sponsored content or products on its platform, as well as collaborations with culinary influencers to reach a broader audience.

cotta Co., Ltd. Financial Statement Overview

Summary

The company demonstrates solid revenue growth and operational efficiency, but faces challenges with declining profit margins and increased leverage. Cash flow generation is strong, yet the conversion of income to cash could be improved. Focus on enhancing profitability and managing debt levels is needed.

Income Statement

The company has shown a strong revenue growth rate of 12.22% in the most recent year, indicating a positive trajectory. However, the gross profit margin has decreased from previous years, currently at 29.71%. The net profit margin is relatively low at 3.20%, suggesting room for improvement in cost management. EBIT and EBITDA margins are stable, reflecting consistent operational efficiency.

Balance Sheet

The debt-to-equity ratio has increased to 0.90, indicating higher leverage, which could pose a risk if not managed properly. Return on equity is at 9.85%, which is decent but has declined from previous years. The equity ratio stands at 43.12%, showing a balanced capital structure but with increased debt levels.

Cash Flow

Free cash flow has grown significantly, but the operating cash flow to net income ratio is low at 0.25, suggesting potential issues in converting income into cash. The free cash flow to net income ratio is strong at 0.90, indicating good cash generation relative to net income.

Breakdown	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	13.68B	8.95B	8.62B	8.84B	9.26B
Gross Profit	4.06B	2.82B	2.93B	2.74B	3.88B
EBITDA	1.09B	665.03M	964.94M	724.22M	623.25M
Net Income	437.12M	341.30M	570.91M	399.98M	324.64M
Balance Sheet
Total Assets	10.29B	6.39B	6.42B	6.00B	5.83B
Cash, Cash Equivalents and Short-Term Investments	2.54B	1.83B	1.93B	1.80B	1.62B
Total Debt	3.97B	1.20B	1.43B	1.48B	1.44B
Total Liabilities	5.80B	2.23B	2.51B	2.64B	2.72B
Stockholders Equity	4.44B	4.16B	3.91B	3.35B	3.11B
Cash Flow
Free Cash Flow	778.95M	211.91M	395.89M	320.81M	-317.16M
Operating Cash Flow	868.91M	280.47M	445.58M	447.04M	-106.97M
Investing Cash Flow	-2.60B	7.01M	-242.57M	-136.72M	-223.84M
Financing Cash Flow	2.44B	-387.21M	-78.04M	-130.74M	-27.12M

cotta Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 509.00
• 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:3359, the sentiment is Positive. The current price of 509 is below the 20-day moving average (MA) of 528.70, below the 50-day MA of 510.54, and above the 200-day MA of 488.50, indicating a bullish trend. The MACD of 20.18 indicates Negative momentum. The RSI at 72.70 is Negative, neither overbought nor oversold. The STOCH value of 83.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3359.

cotta Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5901	79 Outperform	¥549.06B	13.65	6.55%	2.71%	-0.06%	137.47%
7917	77 Outperform	¥118.55B	14.56	7.53%	3.01%	5.44%	45.99%
3954	76 Outperform	¥13.94B	11.03	―	1.20%	6.42%	-6.32%
3950	76 Outperform	¥78.67B	12.49	―	6.64%	2.85%	-9.13%
7864	70 Outperform	¥157.69B	7.06	10.46%	2.35%	4.56%	49.23%
3359	69 Neutral	¥6.27B	13.25	―	2.03%	52.77%	28.19%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%