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

• Market Cap: ¥5.73B
• Dividend Yield: 2.03%
• Average Volume (3M): 55.65K
• Price to Earnings (P/E): 7.3
• Beta (1Y): 0.53
• 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: ¥597.00 ▲(17.29% 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 Momentum

Sustained revenue growth indicates strengthening demand for cotta's confectionery, bakery and packaging products and expanding market penetration. Durable top-line expansion supports scale benefits, distribution investments (including e-commerce channels) and longer-term margin recovery potential.

Free Cash Flow Generation

Robust free cash flow relative to net income provides enduring financial flexibility: it funds capex, working capital, dividends or debt reduction. Strong FCF supports execution of strategic initiatives and cushions the business through cyclical pressure in foodservice and packaging demand.

Operational Efficiency (EBIT/EBITDA)

Stable EBIT/EBITDA margins point to consistent cost control and operational resilience across production and distribution. This durability helps the company absorb input cost swings, maintain supplier and customer relationships, and sustain cash generation over a multi-month horizon.

Negative Factors

Declining Profit Margins

Lower gross and very thin net margins constrain the company's capacity to reinvest, build reserves or absorb future cost inflation. Persistently compressed margins reduce earnings resilience, making long-term profitability and debt servicing more sensitive to volume or price shocks.

Rising Leverage

Higher leverage reduces financial flexibility and raises fixed financial obligations, which is material given thin net margins. Elevated debt levels can limit investment options, increase refinancing risk, and magnify downside in a demand slowdown or if margins fail to recover.

Weak Cash Conversion from Income

Poor conversion of reported earnings into operating cash signals working capital inefficiencies or timing mismatches. Over time this can strain liquidity despite strong FCF metrics, complicate debt servicing and limit the company's ability to sustainably fund growth or buffer margin volatility.

cotta Co., Ltd. Business Overview & Revenue Model

Company Description

cotta CO.,LTD engages in manufacture and sale of confectionary food materials and food packaging materials in Japan and internationally. It offers packing materials, including cake boxes, carrier bags, wrapping papers, ribbons, and freshness preservatives, as well as confectionary materials, such as butter and flour. The company serves confectionary shops, bakeries, and individuals. It also sells its products through mail orders. The company was formerly known as Taisei Co.,Ltd (Fukuoka) and changed its name to cotta CO.,LTD in March 2020. cotta CO.,LTD was incorporated in 1998 and is headquartered in Tsukumi, Japan.

How the Company Makes Money

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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	6.40B	6.42B	6.00B	5.85B
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	2.24B	2.52B	2.64B	2.74B
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: Neutral
• Last Price: 509.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3359, the sentiment is Neutral. The current price of 509 is below the 20-day moving average (MA) of 553.85, below the 50-day MA of 525.20, and above the 200-day MA of 499.11, indicating a neutral trend. The MACD of 1.34 indicates Positive momentum. The RSI at 45.68 is Neutral, neither overbought nor oversold. The STOCH value of 20.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	¥496.44B	10.13	6.90%	2.71%	-0.06%	137.47%
7917	77 Outperform	¥100.64B	7.99	7.53%	3.01%	5.44%	45.99%
3954	76 Outperform	¥13.65B	8.51	―	1.20%	6.42%	-6.32%
3950	76 Outperform	¥78.14B	12.05	―	6.64%	2.85%	-9.13%
7864	70 Outperform	¥145.80B	4.25	10.46%	2.35%	4.56%	49.23%
3359	69 Neutral	¥5.73B	7.26	―	2.03%	52.77%	28.19%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%