No.1 Co.,Ltd (3562) AI Stock Analysis

• Market Cap: ¥12.60B
• Dividend Yield: 1.5%
• Average Volume (3M): 17.57K
• Price to Earnings (P/E): 24.6
• Beta (1Y): 0.75
• Revenue Growth: 9.64%
• EPS Growth: -38.80%
• Country: JP
• Employees: 649
• Sector: Industrials
• Sector Strength: 72
• Industry: Business Equipment & Supplies
• EPS (TTM): -13.34
• Shares Outstanding: 7,024,980
• 10 Day Avg. Volume: 12,410
• 30 Day Avg. Volume: 17,570
• PEG Ratio: -0.55
• Price to Book (P/B): 2.59
• Price to Sales (P/S): 0.81
• P/FCF Ratio: 9.47
• 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: 66 Neutral
• Price Target: ¥1,993.00 ▼(-5.05% Downside)

The company's strong financial performance, particularly in cash flow management, is a significant strength. However, technical indicators show a bearish trend, and the valuation suggests limited upside potential. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Strong free cash flow generation

Exceptional free cash flow growth (225.3%) and an operating-cash-to-net-income ratio of 2.52 provide durable internal funding. This improves resilience to downturns, supports continued R&D, product investment, and working capital needs without reliance on external financing, strengthening long-term strategic optionality.

Moderate leverage and strong equity base

A debt-to-equity ratio of 0.36 and a 51.3% equity ratio signal moderate leverage and a solid capitalization. This structural balance reduces refinancing risk, preserves financial flexibility for capex or M&A, and enhances the company's ability to sustain operations and investments through industry cycles.

Diversified multi-channel business model

A multi-channel distribution model plus retail partnerships, e-commerce, and after-sales services diversifies revenue sources and customer touchpoints. Structural channel breadth and service revenues increase customer retention, reduce single-channel dependence, and support steadier revenue over the medium term.

Negative Factors

Declining return on equity

ROE halved from 23.6% to 12.8%, a meaningful deterioration in capital efficiency. If persistent this reduces shareholder returns, suggests lower profitability or poorer asset utilization, and may force management to reallocate capital or alter strategy to restore long-term return profiles.

Operating margin compression

EBIT margin fell from 9.1% to 7.3%, indicating rising operating costs or pricing pressure. Sustained margin compression would erode free cash flow and limit reinvestment capacity for R&D or marketing, weakening competitive positioning and long-term profitability unless cost or pricing dynamics improve.

Significant EPS contraction

EPS declined roughly 34.7%, reflecting a sharp drop in earnings per share. Persistent EPS contraction undermines capacity to fund growth, dividends, or buybacks, and signals potential operational, demand, or margin issues that could impair investor confidence and limit long-term capital deployment options.

No.1 Co.,Ltd Business Overview & Revenue Model

Company Description

No.1 Co.,Ltd sells and maintains OA and information security equipment. The company's products include copiers and multifunction machines, business phones, network security products, and file servers. It also engages in the sale and maintenance of communication equipment; line and mobile sales, and related agency business; mail-order agency business related to office equipment and services; internet-related business; and advertising agency business. The company was incorporated in 1989 and is headquartered in Tokyo, Japan.

How the Company Makes Money

The company generates revenue primarily through its retail operations, selling a wide variety of consumer goods directly to customers. Key revenue streams include sales from its physical retail stores, as well as online sales through its e-commerce platform. Strategic partnerships with suppliers and manufacturers help No.1 Co.,Ltd to source products at competitive prices, enabling them to maintain a profitable margin. Additionally, the company may engage in marketing and promotional activities to drive sales and enhance its market presence.

No.1 Co.,Ltd Financial Statement Overview

Summary

The company demonstrates robust financial health with strong revenue growth and impressive cash flow management. The income statement reflects steady profitability, though a slight dip in operational efficiency is noted. The balance sheet is solid, with moderate leverage and a strong equity position, though the decline in ROE warrants attention.

Income Statement

The company showcases a strong revenue growth trajectory with an 8.9% increase from 2024 to 2025. Gross and net profit margins stand at healthy levels, with a gross profit margin of 45.6% and a net profit margin of 4.0% in 2025. Margins have remained relatively stable over the years, reflecting the company's effective cost management. However, the decrease in EBIT margin from 9.1% to 7.3% may indicate rising operational expenses.

Balance Sheet

The balance sheet reflects a stable financial structure with a debt-to-equity ratio of 0.36, indicating moderate leverage. The equity ratio of 51.3% suggests a strong equity base relative to assets. However, the decline in ROE from 23.6% in 2024 to 12.8% in 2025 highlights a decrease in profitability relative to shareholder equity, which could be a concern if it continues.

Cash Flow

The company shows impressive cash flow management with a significant increase in free cash flow, growing by 225.3% from 2024 to 2025. The operating cash flow to net income ratio of 2.52 indicates efficient conversion of income into cash. Such strong cash flow metrics provide financial flexibility and resilience against potential economic downturns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.79B	14.21B	13.45B	13.31B	13.92B	11.84B
Gross Profit	6.80B	6.48B	6.32B	6.21B	5.72B	4.68B
EBITDA	1.49B	1.40B	1.77B	1.76B	1.18B	920.79M
Net Income	536.84M	574.39M	886.27M	911.88M	531.87M	403.28M
Balance Sheet
Total Assets	8.24B	8.71B	8.10B	7.94B	7.23B	7.09B
Cash, Cash Equivalents and Short-Term Investments	2.46B	3.02B	2.42B	2.45B	1.67B	1.91B
Total Debt	1.47B	1.61B	1.87B	1.60B	1.79B	1.80B
Total Liabilities	3.83B	4.23B	4.34B	4.38B	4.49B	4.60B
Stockholders Equity	4.41B	4.47B	3.76B	3.56B	2.73B	2.47B
Cash Flow
Free Cash Flow	0.00	1.22B	375.50M	901.40M	282.31M	623.76M
Operating Cash Flow	0.00	1.45B	565.21M	1.14B	498.50M	796.09M
Investing Cash Flow	0.00	-542.39M	-185.75M	-1.75M	-361.49M	-1.80B
Financing Cash Flow	0.00	-469.95M	-414.34M	-368.46M	-382.56M	1.45B

No.1 Co.,Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2099.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3562, the sentiment is Negative. The current price of 2099 is below the 20-day moving average (MA) of 2115.55, below the 50-day MA of 2248.86, and below the 200-day MA of 2124.43, indicating a bearish trend. The MACD of -139.87 indicates Positive momentum. The RSI at 21.08 is Positive, neither overbought nor oversold. The STOCH value of 13.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3562.

No.1 Co.,Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7991	76 Outperform	¥16.73B	7.47	―	5.73%	-27.22%	-62.64%
7999	75 Outperform	¥13.57B	25.21	―	4.37%	0.33%	-65.09%
7975	70 Neutral	¥4.29B	20.52	―	2.03%	3.24%	―
3562	66 Neutral	¥12.60B	24.63	―	1.50%	9.64%	-38.80%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7957	61 Neutral	¥2.21B	3.92	―	5.27%	0.34%	―
7992	51 Neutral	¥3.38B	-3.19	―	―	4.11%	33.06%