Studio Atao Co., Ltd. (3550) AI Stock Analysis

• Market Cap: ¥3.13B
• Dividend Yield: 2.48%
• Average Volume (3M): 10.34K
• Price to Earnings (P/E): 33.2
• Beta (1Y): 0.45
• Revenue Growth: 16.51%
• EPS Growth: 35.70%
• Country: JP
• Employees: 71
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): 1.50
• Shares Outstanding: 14,037,000
• 10 Day Avg. Volume: 10,510
• 30 Day Avg. Volume: 10,340
• PEG Ratio: 1.13
• Price to Book (P/B): 1.10
• Price to Sales (P/S): 0.75
• P/FCF Ratio: 7.95
• 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: ¥235.00 ▲(17.50% Upside)
• Action: N/A Date: 07/28/25
• Date: Action: N/A 07/28/25

Studio Atao Co., Ltd. demonstrates strong financial performance with robust revenue growth and solid balance sheet stability. The technical analysis supports a positive stock trend, although the valuation suggests potential overvaluation. The absence of earnings call data and corporate events does not impact the overall assessment.

Positive Factors

Low leverage / strong equity ratio

The company's minimal leverage and high equity ratio provide durable financial flexibility. Low debt burden reduces default risk, preserves borrowing capacity for strategic investments or downturns, and supports sustained capital allocation to growth or shareholder returns over months.

High gross margin and revenue growth

A very high gross margin combined with double-digit revenue growth points to structural product or cost advantages and healthy demand. This margin buffer supports reinvestment in brand, channels and product development, enhancing durable competitive positioning.

Strong cash generation

Rapid FCF growth and strong OCF conversion indicate sustainable internal funding for capex, working capital and dividends. Reliable cash generation improves financial resilience and lowers reliance on external financing for multi‑quarter initiatives.

Negative Factors

Slim net and operating margins

Despite high gross margins, low EBIT/EBITDA and net margins show operating leverage is weak. Thin bottom‑line profitability limits retained earnings and makes the business more sensitive to SG&A or cost inflation, constraining durable earnings power.

Free cash flow volatility risk

A high FCF-to-net-income ratio flagged as volatile implies cash timing or one‑off effects may drive FCF moves. Persistent volatility undermines predictability for investment planning, dividends, and deleveraging over the medium term.

Low return on equity

ROE near 3% is low given the strong equity base, indicating suboptimal capital efficiency. With a high equity ratio, the company may be conservatively资本ized but this reduces long‑term shareholder returns unless ROE is improved through higher margins or asset turns.

Studio Atao Co., Ltd. Business Overview & Revenue Model

Company Description

Studio Atao Co., Ltd. (3550) is a creative studio specializing in digital content production, including animation, video production, and multimedia design. The company operates in the entertainment and advertising sectors, providing innovative solutions for brands and clients looking to enhance their visual storytelling and engagement through high-quality digital media.

How the Company Makes Money

Studio Atao generates revenue primarily through service contracts with clients in various industries, offering tailored solutions for advertising campaigns, promotional videos, and animated content. Key revenue streams include project-based fees for custom content creation, retainer agreements for ongoing production services, and licensing fees for proprietary content. Additionally, the company may collaborate with other media firms or brands, creating strategic partnerships that enhance their service offerings and expand their market reach, contributing to overall earnings.

Studio Atao Co., Ltd. Financial Statement Overview

Summary

Studio Atao Co., Ltd. exhibits strong revenue growth and profitability improvements. The balance sheet reflects low leverage and high equity, ensuring financial stability. Cash flow generation is robust, though some volatility in free cash flow relative to net income could pose risks.

Income Statement

Studio Atao Co., Ltd. shows a strong gross profit margin of 66.7% for the latest year, indicating efficient production and cost management. The net profit margin improved to 1.85% from the previous year, reflecting better profitability. Revenue growth was notable at 14.02% year-over-year, suggesting a positive trajectory in sales. However, EBIT and EBITDA margins are relatively low at 4.94% and 5.68%, respectively, indicating room for improvement in operational efficiency.

Balance Sheet

The company maintains a solid financial position with a low debt-to-equity ratio of 0.08, indicating minimal leverage and financial risk. The return on equity improved to 2.74%, showing better utilization of shareholder funds. The equity ratio stands at a robust 78.9%, highlighting strong financial stability with a high proportion of assets financed by equity.

Cash Flow

Free cash flow grew by 42.5% year-over-year, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio is favorable at 5.2, indicating efficient cash conversion from earnings. However, the free cash flow to net income ratio of 5.06 suggests potential volatility in cash flow relative to earnings, warranting close monitoring.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	3.71B	3.70B	3.24B	3.71B	3.62B	4.01B
Gross Profit	2.44B	2.42B	2.14B	2.39B	2.29B	2.53B
EBITDA	-203.17M	230.87M	175.18M	-203.17M	40.69M	120.23M
Net Income	-229.16M	68.45M	50.78M	-229.16M	-21.88M	35.01M
Balance Sheet
Total Assets	3.79B	3.18B	3.54B	3.79B	3.76B	4.26B
Cash, Cash Equivalents and Short-Term Investments	1.79B	1.83B	1.92B	1.79B	2.12B	2.35B
Total Debt	916.44M	198.34M	556.67M	916.44M	653.08M	877.30M
Total Liabilities	1.23B	680.67M	1.04B	1.23B	903.50M	1.33B
Stockholders Equity	2.55B	2.50B	2.50B	2.55B	2.86B	2.93B
Cash Flow
Free Cash Flow	0.00	346.56M	562.67M	-417.77M	62.04M	-214.88M
Operating Cash Flow	0.00	356.03M	575.77M	-239.55M	86.03M	-181.87M
Investing Cash Flow	0.00	-13.17M	24.22M	-236.40M	-25.00M	-50.61M
Financing Cash Flow	0.00	-430.72M	-472.96M	194.40M	-293.09M	667.56M

Studio Atao Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 200.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3550, the sentiment is Positive. The current price of 200 is below the 20-day moving average (MA) of 222.66, below the 50-day MA of 218.86, and below the 200-day MA of 210.23, indicating a bullish trend. The MACD of 0.99 indicates Positive momentum. The RSI at 52.10 is Neutral, neither overbought nor oversold. The STOCH value of 81.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3550.

Studio Atao Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3569	78 Outperform	¥169.00B	9.78	10.24%	2.43%	6.08%	8.55%
3104	75 Outperform	¥117.04B	15.30	―	1.79%	10.76%	54.82%
3550	70 Outperform	¥3.13B	33.23	―	2.48%	16.51%	35.70%
8011	66 Neutral	¥39.16B	13.45	―	5.23%	―	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
8166	47 Neutral	¥3.93B	1.99	―	―	-5.25%	-77.53%
8107	46 Neutral	¥9.36B	-162.43	―	―	90.06%	-98.03%