USS Co (4732) AI Stock Analysis

• Market Cap: ¥877.93B
• Dividend Yield: 2.64%
• Average Volume (3M): 1.02M
• Price to Earnings (P/E): 22.0
• Beta (1Y): 0.37
• Revenue Growth: 7.58%
• EPS Growth: 15.12%
• Country: JP
• Employees: 1,130
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): N/A
• Shares Outstanding: 474,000,000
• 10 Day Avg. Volume: 964,960
• 30 Day Avg. Volume: 1,019,026
• PEG Ratio: 1.16
• Price to Book (P/B): 3.26
• Price to Sales (P/S): 6.40
• P/FCF Ratio: 18.82
• 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): 87.56
• Revenue Forecast (FY): ¥112.47B

• Rating: 83 Outperform
• Price Target: ¥2,141.00 ▲(25.54% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

Score is driven primarily by excellent financial performance (very strong profitability, minimal leverage, and strong free cash flow). Technicals are supportive with an upward trend, though momentum is somewhat overbought. Valuation is acceptable but not particularly inexpensive, tempering the overall score.

Positive Factors

High profitability margins

USS's TTM net margin (~36.7%) and EBIT margin (~53%) create a durable profitability moat from auction fee economics. These elevated margins generate recurring operating earnings, fund reinvestment into platform services, support shareholder returns, and provide a buffer against cyclical dips in used-car volumes over the next several months.

Conservative balance-sheet leverage

A debt-to-equity ratio near 1% signals very low leverage and ample financial flexibility. This conservative capital structure reduces refinancing and interest-rate risks, enables opportunistic investment in auction infrastructure or strategic M&A, and supports resilience through industry cycles without pressuring operating cash flow.

Strong free cash flow generation

TTM FCF of ~43.4bn (about 89% of net income) shows substantial cash generation from core auction operations. Reliable absolute FCF supports dividends, capex for platform upgrades and ancillary services, and reduces dependence on external funding, underpinning durable capital allocation flexibility over the medium term.

Negative Factors

Historical earnings volatility

Past sharp earnings swings (notably FY2021) indicate USS's results can be sensitive to macro conditions, auction volumes, or one-offs. This structural variability complicates medium-term forecasting, can force more conservative capital allocation, and reduces visibility into sustainable earnings power despite current strong margins.

Operating cash flow lags reported earnings

OCF running at roughly 0.75–0.88x of reported earnings shows cash conversion volatility driven by timing or working-capital dynamics. This reduces predictability of free cash flow availability for buybacks, dividends, or capex in the near term and can necessitate temporary liquidity measures despite strong accounting profits.

Working-capital driven balance-sheet swings

Year-to-year fluctuations in assets and equity point to working-capital sensitivity tied to auction volumes and settlement timing. These swings increase liquidity and forecasting risk, can create transient funding needs, and make short- to medium-term cash planning and covenant management more complex for a low-leverage company.

USS Co Business Overview & Revenue Model

Company Description

USS Co (4732) is a prominent company in the metal recycling and waste management sector, specializing in the collection, processing, and recycling of ferrous and non-ferrous metals. The company operates in various segments, including scrap metal trading, environmental services, and resource recovery, providing sustainable solutions for industries and municipalities. USS Co is committed to promoting circular economy practices by transforming waste into valuable resources and offering innovative recycling solutions tailored to customer needs.

How the Company Makes Money

USS Co generates revenue primarily through the sale of processed scrap metals to manufacturing and industrial clients, who use these materials as raw inputs for their production processes. The company also earns income from its waste management services, which include collecting and disposing of industrial waste. Additionally, USS Co may have partnerships with local governments and businesses for waste recycling initiatives, providing a steady stream of contracts and agreements that contribute to its earnings. The effectiveness of its operations in sourcing, processing, and selling metal scrap, along with its ability to navigate fluctuating commodity prices, plays a critical role in the company's profitability.

USS Co Financial Statement Overview

Summary

Overall fundamentals are very strong: exceptional profitability (TTM net margin ~36.7%, EBIT margin ~53%), conservatively financed balance sheet (debt-to-equity ~1%), and solid free cash flow generation (TTM FCF ~43.4bn; ~89% of net income). Main risks are historical earnings volatility (FY2021 weakness) and somewhat weaker recent cash conversion vs earnings (OCF ~0.75–0.88x in FY2024–TTM).

Income Statement

Profitability is exceptionally strong for the industry, with TTM (Trailing-Twelve-Months) net margin around 36.7% and very high operating profitability (EBIT margin ~53%). Revenue has expanded steadily across the last several annual periods (2022–2025 annual), and TTM revenue is also up. The main weakness is volatility in earnings quality historically—FY2021 shows a sharp drop in net income and margins versus later years—suggesting results can be sensitive to market conditions or one-offs.

Balance Sheet

The balance sheet is conservatively financed, with extremely low leverage (debt-to-equity ~1% in both TTM and the latest annual), giving strong financial flexibility. Returns on equity are solid and improving (about 15.7% in FY2023 to ~18.4% in FY2025 annual and ~20.0% in TTM). A watch item is that equity and assets fluctuate year-to-year (e.g., assets peaked in FY2024–FY2025 annual and are lower in TTM), which may reflect working-capital swings typical for the business.

Cash Flow

Cash generation is strong, with TTM (Trailing-Twelve-Months) free cash flow of ~43.4bn and a sharp TTM free cash flow increase (~28%). Free cash flow tracks net income reasonably well (TTM free cash flow is ~89% of net income; annual periods are typically ~88–94%). The key weakness is that operating cash flow has been somewhat light versus reported earnings in recent periods (about 0.75–0.88x in FY2024–TTM), indicating some working-capital or timing headwinds despite solid absolute cash flow.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	110.34B	104.02B	97.61B	88.78B	81.48B	74.87B
Gross Profit	69.19B	64.82B	59.03B	53.64B	50.77B	46.53B
EBITDA	64.29B	60.25B	53.91B	49.80B	49.52B	22.35B
Net Income	40.46B	37.64B	32.91B	30.01B	29.75B	4.02B
Balance Sheet
Total Assets	245.94B	267.35B	271.56B	242.35B	229.35B	210.70B
Cash, Cash Equivalents and Short-Term Investments	91.48B	116.22B	112.01B	95.69B	82.38B	70.77B
Total Debt	2.36B	2.28B	2.66B	2.42B	2.83B	3.17B
Total Liabilities	46.19B	59.99B	72.54B	48.20B	46.88B	37.18B
Stockholders Equity	196.51B	204.20B	196.00B	191.45B	180.34B	171.83B
Cash Flow
Free Cash Flow	43.43B	35.39B	44.48B	32.34B	34.59B	29.42B
Operating Cash Flow	47.32B	38.16B	47.15B	36.91B	36.63B	38.41B
Investing Cash Flow	-14.91B	-6.00B	-2.65B	-9.07B	-1.34B	-9.33B
Financing Cash Flow	-41.21B	-29.95B	-28.19B	-17.12B	-24.68B	-15.04B

USS Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1705.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4732, the sentiment is Positive. The current price of 1705.5 is below the 20-day moving average (MA) of 1811.90, below the 50-day MA of 1765.27, and above the 200-day MA of 1691.30, indicating a bullish trend. The MACD of 41.22 indicates Negative momentum. The RSI at 71.27 is Negative, neither overbought nor oversold. The STOCH value of 82.61 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4732.

USS Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4732	83 Outperform	¥877.93B	22.02	19.13%	2.64%	7.58%	15.12%
8291	76 Outperform	¥28.66B	11.79	―	4.79%	-6.89%	-50.31%
7599	70 Outperform	¥153.82B	12.08	―	2.82%	11.66%	-7.47%
7593	63 Neutral	¥68.05B	11.94	―	4.49%	8.56%	-13.47%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3186	61 Neutral	¥298.91B	23.85	―	1.24%	21.79%	9.89%
7602	48 Neutral	¥4.94B	-18.45	―	1.08%	-2.36%	-1738.42%

USS Co Corporate Events

USS Raises Earnings and Dividend Forecasts on Strong Auction Performance

USS Co., Ltd. has raised its full-year consolidated earnings forecast for the fiscal year ending March 31, 2026, after stronger-than-expected performance in the first nine months. Favorable market conditions and robust sales activities drove higher numbers of consigned vehicles and contract completions, lifting expected net sales and profits slightly above the prior outlook.

Reflecting the improved earnings, USS also increased its year-end dividend forecast from 26.20 yen to 26.60 yen per share, keeping its consolidated dividend payout ratio at or above 60%. The move aligns with the company’s broader shareholder return policy targeting at least a 60% dividend payout and a total payout ratio of at least 100% over three years from FY3/2026 to FY3/2028.

The most recent analyst rating on (JP:4732) stock is a Buy with a Yen1898.00 price target. To see the full list of analyst forecasts on USS Co stock, see the JP:4732 Stock Forecast page.

USS Co. Lifts Profit, Dividend Outlook on Strong Nine-Month Results

USS Co., Ltd. reported consolidated net sales of ¥82.97 billion for the nine months ended December 31, 2025, up 8.2% year on year, with operating profit rising 10.2% to ¥43.90 billion and profit attributable to owners of parent climbing 10.2% to ¥30.43 billion. Basic earnings per share increased to ¥65.25 as the company maintained a high equity-to-asset ratio of 79.7% despite a reduction in total assets, while also revising upward its dividend and full-year earnings forecasts for the fiscal year ending March 31, 2026, signaling confidence in continued profit growth.

The company now expects full-year net sales of ¥111.9 billion, operating profit of ¥58.0 billion, and profit attributable to owners of parent of ¥40.0 billion, representing mid–single-digit to high–single-digit growth rates compared with the prior year. USS has also raised its annual dividend forecast to ¥51.80 per share, including a higher interim dividend, suggesting a shareholder-friendly capital allocation stance supported by robust profitability and an ongoing reduction in shares outstanding through treasury stock management.

The most recent analyst rating on (JP:4732) stock is a Buy with a Yen1898.00 price target. To see the full list of analyst forecasts on USS Co stock, see the JP:4732 Stock Forecast page.

USS Co. Posts Solid Growth in Used Car Auction Volumes

USS Co., Ltd. reported higher activity in its used car auction business for the third quarter of the fiscal year ending March 31, 2026, with consigned vehicles up 3.0% and contracted vehicles up 9.7% year-on-year, while the contract completion rate rose to 67.7% from 63.6%. For the first nine months of the fiscal year, consigned vehicles increased 11.3% and contracted vehicles grew 9.2% versus the prior-year period, although the overall contract completion rate edged down to 66.3% from 67.5%, suggesting solid volume growth across its auction platform even as conversion efficiency slightly softened over the longer period.

The most recent analyst rating on (JP:4732) stock is a Buy with a Yen1898.00 price target. To see the full list of analyst forecasts on USS Co stock, see the JP:4732 Stock Forecast page.

USS Co. Finalizes Adjustment of Japanese ASR Share Repurchase

USS Co., Ltd. has finalized the adjustment phase of its previously announced facility share repurchase program structured as a Japanese accelerated share repurchase (ASR), in coordination with SMBC Nikko Securities. SMBC Nikko exercised the 22nd Series Warrants and waived the 23rd Series Warrants, resulting in a substantive buyback of 9,319,500 shares at a total purchase price of ¥15,999,982,050, with the number of shares determined by the average volume-weighted average price over the specified period. The transaction confirms the final size and pricing of USS’s share repurchase, bringing clarity and completion to the capital management initiative and signaling continued focus on shareholder returns through disciplined buyback execution.

The most recent analyst rating on (JP:4732) stock is a Buy with a Yen1898.00 price target. To see the full list of analyst forecasts on USS Co stock, see the JP:4732 Stock Forecast page.