PAPYLESS CO., LTD. (3641) AI Stock Analysis

• Market Cap: ¥8.85B
• Dividend Yield: 1.02%
• Average Volume (3M): 6.02K
• Price to Earnings (P/E): 82.0
• Beta (1Y): 0.39
• Revenue Growth: -8.03%
• EPS Growth: N/A
• Country: JP
• Employees: 148
• Sector: Communication Services
• Sector Strength: 97
• Industry: Publishing
• EPS (TTM): 7.27
• Shares Outstanding: 10,326,880
• 10 Day Avg. Volume: 5,130
• 30 Day Avg. Volume: 6,020
• PEG Ratio: 0.30
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.54
• P/FCF Ratio: -14.91
• 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: 48 Neutral
• Price Target: ¥978.00 ▲(1.14% Upside)

The score is held back primarily by deteriorating financial performance—multi-year revenue decline, a swing to losses, and negative operating/free cash flow in 2025—despite a conservative, low-debt balance sheet. Technicals are moderately supportive (above key moving averages with positive MACD), but valuation remains a major concern given the very high P/E and modest dividend yield.

Positive Factors

Strong Balance Sheet

A low-debt balance sheet provides financial flexibility, allowing the company to invest in growth opportunities and weather economic downturns.

Stable Gross Margin

Stable gross margins indicate effective cost management and pricing power, which can support profitability even amid revenue challenges.

Financial Flexibility

Stable asset levels ensure the company can leverage its resources for strategic initiatives and manage liabilities effectively.

Negative Factors

Revenue Decline

Continued revenue decline suggests challenges in market competitiveness or product demand, impacting long-term growth prospects.

Negative Cash Flow

Negative cash flow indicates potential liquidity issues, limiting the company's ability to reinvest in its business or cover operational costs.

Profitability Deterioration

Deteriorating profitability suggests operational inefficiencies or increased competition, challenging the company's ability to sustain earnings.

PAPYLESS CO., LTD. Business Overview & Revenue Model

Company Description

Papyless Co., Ltd. sells and rents electronic books in Japan, the United States, and internationally. It offers novel and non-fiction books, practical books, photo books, comics, hobbies/life/magazines, utility books, business/education books, and audio and video books. The company also operates upppi, an e-book posting and editing platform; develops and produces next-generation content; and operates e-book agency. Papyless Co., Ltd. was founded in 1995 and is based in Tokyo, Japan.

How the Company Makes Money

PAPYLESS CO., LTD. generates revenue primarily through the sale of digital content on its platform. This includes individual e-book purchases, subscription services, and partnerships with publishers and content creators. The company leverages its digital platform to offer a vast collection of manga and other reading materials, attracting a large user base. Additionally, PAPYLESS may engage in strategic partnerships with publishers to expand its content offerings and drive more traffic to its platform, further increasing its revenue potential.

PAPYLESS CO., LTD. Financial Statement Overview

Summary

PAPYLESS CO., LTD. shows financial stability with a strong balance sheet and no debt. However, the company faces significant challenges with declining revenues, negative operational margins, and absent cash flows, indicating potential liquidity and profitability issues.

Income Statement

The company's TTM revenue shows a declining trend from the previous years, with a significant drop from 2022 to TTM. Gross profit margin remains strong at approximately 47.5% in TTM, although EBIT and EBITDA margins are negative, indicating operational challenges. Net profit margin is positive but has decreased significantly compared to previous years, showing deteriorating profitability.

Balance Sheet

The balance sheet appears robust with a strong equity base and no debt, leading to a solid equity ratio of approximately 70.2% in TTM. The debt-to-equity ratio is effectively zero, underscoring financial stability. However, the declining stockholders' equity trend warrants attention.

Cash Flow

Cash flow analysis reveals potential issues, with zero operating and free cash flows in TTM, a stark contrast from positive figures in previous years. The lack of cash flow could pose liquidity risks if it persists, despite past periods of positive free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.35B	15.77B	17.18B	18.63B	20.70B	25.39B
Gross Profit	7.34B	7.55B	8.26B	8.76B	10.09B	12.16B
EBITDA	-529.00M	-274.00M	263.00M	433.00M	966.00M	2.24B
Net Income	-349.00M	-164.00M	217.00M	657.00M	751.00M	1.54B
Balance Sheet
Total Assets	12.87B	12.73B	14.53B	13.39B	13.83B	15.19B
Cash, Cash Equivalents and Short-Term Investments	10.15B	10.08B	11.92B	10.23B	10.78B	11.84B
Total Debt	0.00	0.00	1.00M	2.00M	0.00	1.00M
Total Liabilities	3.94B	3.70B	4.16B	3.97B	5.06B	6.14B
Stockholders Equity	8.81B	8.90B	10.30B	9.39B	8.73B	9.02B
Cash Flow
Free Cash Flow	0.00	-576.00M	687.00M	-614.00M	-101.00M	2.43B
Operating Cash Flow	0.00	-573.00M	691.00M	-613.00M	-101.00M	2.43B
Investing Cash Flow	0.00	158.00M	-16.00M	101.00M	-541.00M	-55.00M
Financing Cash Flow	0.00	-1.37B	582.00M	-151.00M	-1.18B	-182.00M

PAPYLESS CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 967.00
• 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:3641, the sentiment is Positive. The current price of 967 is below the 20-day moving average (MA) of 1013.90, below the 50-day MA of 985.24, and above the 200-day MA of 911.44, indicating a bullish trend. The MACD of 18.25 indicates Negative momentum. The RSI at 57.04 is Neutral, neither overbought nor oversold. The STOCH value of 41.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3641.

PAPYLESS CO., LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7849	79 Outperform	¥14.42B	9.95	―	3.16%	-7.41%	-17.57%
6176	73 Outperform	¥9.81B	14.12	―	―	7.76%	12.44%
9478	73 Outperform	¥6.64B	16.89	―	0.87%	-3.02%	-30.86%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
9475	58 Neutral	¥9.00B	39.60	―	1.06%	0.02%	-88.78%
3641	48 Neutral	¥8.85B	82.05	―	1.02%	-8.03%	―