RenetJapanGroup, Inc. (3556) AI Stock Analysis

• Market Cap: ¥16.81B
• Dividend Yield: N/A
• Average Volume (3M): 168.77K
• Price to Earnings (P/E): 33.8
• Beta (1Y): 1.18
• 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: ¥1,146.00 ▲(25.66% 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

Circular business model

RenetJapanGroup’s core business is collection, refurbishment and resale/recycling of IT devices. This circular model creates multiple durable revenue streams (service fees, refurbished sales, recovered-material proceeds) and aligns with ongoing demand for device reuse, supporting steady long-term cash inflows if execution holds.

High gross margin

A sustained gross margin near 75% indicates efficient direct operations and strong unit economics in refurbishment/recovery. High gross margins provide a durable buffer against input cost swings, enabling the company to cover fixed costs and invest in processing capabilities that support long-term profitability if top-line stabilizes.

Strong return on equity

ROE near 49% shows management has historically generated high returns on shareholders’ equity. That suggests effective asset deployment and operational leverage in the business model, a durable strength for equity holders provided profitability and capital allocation remain disciplined over time.

Negative Factors

High leverage

A debt-to-equity ratio of 4.64 denotes heavy reliance on borrowings, which raises refinancing, interest-rate and covenant risks over the medium term. High leverage constrains strategic flexibility, increases fixed financial costs, and magnifies downside if revenue or cash flows weaken.

Weak cash conversion

Negative free cash flow and an OCF-to-net-income ratio of 0.03 indicate earnings poorly convert to cash. This is a structural concern: limited internal cash generation restricts reinvestment, debt servicing, and capital returns, forcing dependence on external financing or asset sales to fund operations.

Revenue decline & low net margin

A recent revenue decline and modest net margin limit operating leverage and room to absorb cost pressures. Persistently shrinking top-line with low net profitability undermines sustainable free cash flow generation and makes it harder to deleverage the balance sheet absent a clear, durable revenue recovery.

RenetJapanGroup, Inc. Business Overview & Revenue Model

Company Description

RenetJapanGroup,Inc. engages in internet reuse, recycling, and social care businesses in Japan and internationally. It offers used books, CDs, DVDs, game software, branded goods, and precious metals under the NET OFF brand. The company also provides used small electronic devices, etc. under the ReNet.jp brand. In addition, it engages in vehicle sales, leasing, and microfinance businesses. The company was founded in 1998 and is headquartered in Nagoya, Japan.

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

Financials are pressured by weak cash generation and leverage: cash flow is the key drag (negative free cash flow; operating cash flow to net income ratio 0.03), balance sheet risk is elevated (debt-to-equity 4.64; low equity ratio), and income statement shows declining revenue (-1.99%) with only modest net margin (4.78%) despite strong gross margin (75.21%).

Income Statement

RenetJapanGroup, Inc. has shown fluctuating revenue growth with a recent decline of 1.99%. The gross profit margin remains strong at 75.21%, indicating efficient cost management. However, the net profit margin is relatively low at 4.78%, and there is a concerning trend of negative EBIT and EBITDA margins in previous years, though they have improved in the latest period.

Balance Sheet

The company has a high debt-to-equity ratio of 4.64, indicating significant leverage, which poses a risk. Return on equity is strong at 48.96%, suggesting effective use of equity to generate profits. However, the equity ratio is low, reflecting a heavy reliance on debt financing.

Cash Flow

Cash flow analysis reveals challenges, with negative free cash flow and a free cash flow to net income ratio of -0.62. The operating cash flow to net income ratio is low at 0.03, indicating potential issues in converting income into cash. The company needs to improve its cash flow management to ensure sustainability.

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: Positive
• 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 1143.60, below the 50-day MA of 1031.48, and above the 200-day MA of 791.95, indicating a bullish trend. The MACD of 29.72 indicates Positive momentum. The RSI at 56.08 is Neutral, neither overbought nor oversold. The STOCH value of 64.36 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	¥4.94B	14.70	―	3.47%	-11.32%	1.10%
3190	66 Neutral	¥4.04B	14.50	―	1.75%	4.95%	17.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3396	60 Neutral	¥5.73B	10.62	―	1.76%	2.24%	―
3556	49 Neutral	¥16.81B	33.79	―	―	-10.83%	―
3726	46 Neutral	¥5.11B	-19.43	―	―	8.12%	19.19%
3059	45 Neutral	¥4.06B	-4.66	―	2.40%	-3.69%	-11429.88%