RenetJapanGroup, Inc. (3556) AI Stock Analysis

• Market Cap: ¥17.19B
• Dividend Yield: N/A
• Average Volume (3M): 168.77K
• Price to Earnings (P/E): 34.6
• Beta (1Y): 1.13
• Revenue Growth: -10.83%
• EPS Growth: N/A
• Country: JP
• Employees: 369
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 22.18
• Shares Outstanding: 14,606,700
• 10 Day Avg. Volume: 110,220
• 30 Day Avg. Volume: 168,773
• PEG Ratio: -0.22
• Price to Book (P/B): 12.98
• Price to Sales (P/S): 1.27
• P/FCF Ratio: -182.35
• 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: 49 Neutral
• Price Target: ¥1,080.00 ▲(18.42% Upside)

Overall score is held back primarily by weak financial quality—especially negative free cash flow and high leverage—despite strong price momentum above major moving averages. Valuation is also a headwind with a relatively high P/E and no dividend yield data.

Positive Factors

Strong gross margin

A 75%+ gross margin indicates durable product or service-level pricing power and efficient direct cost control. This supports sustained operating leverage, funds for R&D and product investment, and resilience to moderate cost inflation over the next several quarters.

High return on equity

ROE near 49% reflects effective use of equity to generate profits, implying management can extract strong returns from invested capital. If maintained, this quality supports shareholder value creation and signals competitive operating efficiency over a multi-quarter horizon.

Diversified service revenue and partnerships

Multiple recurring revenue streams (cloud, licensing, consulting) plus telco partnerships and R&D investments create durable customer relationships, cross-sell potential, and innovation capacity. This diversification reduces dependence on any single market segment long-term.

Negative Factors

High financial leverage

Very high debt-to-equity raises refinancing, interest burden and covenants risk. Over 2–6 months this constrains capital allocation, increases sensitivity to earnings volatility, and can limit ability to invest organically or via M&A without deleveraging or external funding.

Poor cash conversion and negative FCF

Negative FCF and near-zero operating cash conversion mean reported profits are not translating into usable cash. This undermines the firm's ability to service debt, fund R&D or reinvest internally and raises reliance on external financing, a structural weakness if persistent.

Declining revenue trend

A multi-period downtrend in revenue signals weakening demand or competitive pressure. Sustained top-line contraction limits margin expansion, strains cash flow generation and makes deleveraging harder; reversing this trend is critical for medium-term financial stability.

RenetJapanGroup, Inc. Business Overview & Revenue Model

Company Description

RenetJapanGroup, Inc. (3556) is a diversified company based in Japan, primarily operating in the technology and telecommunications sectors. The company focuses on providing innovative solutions and services, including cloud computing, network infrastructure, and software development. RenetJapanGroup aims to enhance operational efficiency for businesses through its advanced technology offerings, which cater to various industries such as finance, healthcare, and logistics.

How the Company Makes Money

RenetJapanGroup generates revenue through multiple streams. Its primary revenue model includes service fees from its cloud computing solutions and software licensing agreements. Additionally, the company earns income from consulting services, where it helps businesses implement and optimize technology solutions. Partnerships with major telecommunications providers and technology firms also contribute significantly to its earnings, allowing the company to expand its market reach and offer bundled services. Moreover, RenetJapanGroup invests in research and development to create proprietary technologies, which further enhance its portfolio and revenue potential.

RenetJapanGroup, Inc. Financial Statement Overview

Summary

RenetJapanGroup, Inc. is facing significant financial challenges with negative profitability and cash flow issues. The high leverage and low equity base raise concerns about financial stability. The company needs to address inefficiencies and improve cash flow management to enhance its financial health.

Income Statement

RenetJapanGroup, Inc. exhibits declining revenue and profitability metrics. The TTM data shows a negative EBIT and net income, indicating operational challenges. The gross profit margin remains relatively strong at 75.2%, but both EBIT and EBITDA margins are negative, reflecting inefficiencies and high operating costs. The net profit margin is also negative, suggesting poor bottom-line performance.

Balance Sheet

The company has a high debt-to-equity ratio of approximately 9.77, indicating significant leverage and potential financial risk. Return on equity is negative, highlighting poor profitability relative to shareholder investments. The equity ratio is low at around 7.3%, pointing to a heavy reliance on debt financing, which may affect financial stability.

Cash Flow

Cash flow metrics are concerning, with zero free cash flow in the TTM period and a negative operating cash flow in previous years. The operating cash flow to net income and free cash flow to net income ratios are not calculable due to zero or negative values, indicating liquidity issues and limited cash generation from operations.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	10.62B	10.41B	11.68B	11.06B	8.59B	7.75B
Gross Profit	8.10B	7.83B	8.68B	7.90B	6.23B	5.68B
EBITDA	534.34M	858.96M	-1.54B	232.32M	729.80M	628.27M
Net Income	38.33M	497.43M	-1.88B	-352.28M	500.85M	200.40M
Balance Sheet
Total Assets	6.55B	7.04B	8.45B	14.79B	9.62B	8.46B
Cash, Cash Equivalents and Short-Term Investments	510.51M	310.62M	880.00M	2.22B	1.60B	1.86B
Total Debt	4.57B	4.71B	6.53B	10.87B	6.17B	5.30B
Total Liabilities	5.80B	5.95B	8.12B	12.74B	7.41B	6.67B
Stockholders Equity	687.28M	1.02B	290.38M	2.01B	2.21B	1.78B
Cash Flow
Free Cash Flow	0.00	-72.31M	333.39M	-1.05B	-226.22M	398.98M
Operating Cash Flow	0.00	116.62M	654.22M	-712.31M	-16.16M	554.34M
Investing Cash Flow	0.00	-200.34M	-1.33B	-567.24M	-338.27M	-231.61M
Financing Cash Flow	0.00	-243.54M	-876.95M	2.03B	-201.40M	-1.48B

RenetJapanGroup, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 912.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3556, the sentiment is Positive. The current price of 912 is below the 20-day moving average (MA) of 991.85, below the 50-day MA of 979.40, and above the 200-day MA of 720.36, indicating a bullish trend. The MACD of 34.84 indicates Negative momentum. The RSI at 67.92 is Neutral, neither overbought nor oversold. The STOCH value of 57.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3556.

RenetJapanGroup, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3172	70 Outperform	¥5.05B	15.00	―	3.47%	-11.32%	1.10%
3190	66 Neutral	¥4.04B	13.71	―	1.75%	4.95%	17.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3396	60 Neutral	¥5.67B	10.57	―	1.76%	2.24%	―
3556	49 Neutral	¥17.19B	34.56	―	―	-10.83%	―
3726	46 Neutral	¥5.36B	-20.41	―	―	8.12%	19.19%
3059	45 Neutral	¥4.07B	-4.67	―	2.40%	-3.69%	-11429.88%