PA Co., Ltd. (4766) AI Stock Analysis

• Market Cap: ¥2.53B
• Dividend Yield: N/A
• Average Volume (3M): 14.77K
• Price to Earnings (P/E): 26.4
• Beta (1Y): 0.35
• Revenue Growth: 8.11%
• EPS Growth: 255.15%
• Country: JP
• Employees: 153
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): 1.78
• Shares Outstanding: 11,229,800
• 10 Day Avg. Volume: 16,790
• 30 Day Avg. Volume: 14,770
• PEG Ratio: 1.01
• Price to Book (P/B): 5.70
• Price to Sales (P/S): 1.47
• P/FCF Ratio: 55.48
• 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: 63 Neutral
• Price Target: ¥302.00 ▲(9.42% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily driven by improving financial performance (earnings recovery and better leverage, but uneven cash flow) and supportive technical momentum (price above major moving averages with positive MACD). These positives are tempered by a relatively high P/E and no dividend yield data, which lowers the valuation component.

Positive Factors

Steady revenue growth and earnings recovery

Consistent revenue growth from 2022–2025 and a return to positive earnings establish a durable operating baseline for the staffing business. That recovery indicates sustained demand and operational fixes, supporting predictable top-line cash flow and credibility with clients and lenders over the next 2–6 months.

Material leverage improvement

The marked reduction in leverage and equity growth strengthens financial flexibility and reduces insolvency risk. A lower debt/equity ratio and solid ROE improve capacity to withstand shocks, support incremental investment or strategic hiring, and make refinancing or covenant management easier over a multi-quarter horizon.

2025 cash‑flow rebound

The rebound in operating and free cash flow demonstrates the company's ability to convert earnings into spendable cash when operations stabilize. This strengthens near-term liquidity, supports debt reduction or targeted reinvestment, and reduces dependence on external financing for working capital needs.

Negative Factors

Modest and declining margins

Declining gross margin and a modest net margin constrain the firm's ability to absorb cost inflation or invest in growth initiatives. Low margins reduce the buffer against demand shocks and limit retained earnings, making long-term margin recovery essential for durable profitability and capital accumulation.

Inconsistent cash conversion

Volatile cash conversion—periods of negative operating cash flow in 2020–2021 and FCF at 46% of net income in 2025—signals working capital swings and operational sensitivity. Inconsistent cash flows can strain liquidity, complicate planning, and increase reliance on debt during downturns.

Sizable remaining debt exposure

Although leverage improved, the absolute level of debt (~¥580M) keeps refinancing and interest burden risks meaningful. Elevated debt reduces strategic optionality, raises vulnerability to margin compression, and could force conservative capital allocation if earnings dip, affecting long-term investment capacity.

PA Co., Ltd. Business Overview & Revenue Model

Company Description

PA Co., Ltd. develops revitalization projects for individuals and businesses in Japan. The company offers in-house recruiting media for job seekers; and temporary staffing and recruitment services, as well as manages childcare and nursery schools. The company was incorporated in 1973 and is headquartered in Tokyo, Japan.

How the Company Makes Money

PA Co., Ltd. generates revenue through multiple streams, primarily from the sale of software licenses, subscription services for its cloud-based platforms, and consulting services related to IT infrastructure and digital transformation. The company also benefits from partnerships with major technology firms, allowing it to integrate its solutions with widely used platforms and expand its market reach. Additionally, PA Co., Ltd. engages in long-term contracts with enterprises, providing ongoing support and maintenance services, which contribute to stable, recurring revenue. The company's focus on innovation and adapting to market trends further enhances its ability to attract new clients and retain existing ones, thereby driving growth and profitability.

PA Co., Ltd. Financial Statement Overview

Summary

Income statement is solid (Score 74) with steady revenue growth and a recovery to positive earnings, but margins are modest and gross margin has trended down. Balance sheet is mixed (Score 62): leverage has improved materially yet debt remains sizable. Cash flow is the main drag (Score 56) due to inconsistent cash conversion despite a 2025 rebound in operating and free cash flow.

Income Statement

Revenue has grown steadily from 2022–2025 (with 2025 up ~3.3%), and profitability has meaningfully recovered from the 2020–2021 loss period to positive earnings in 2022–2025. However, margins have been mixed: gross margin has trended down since 2022, while net margin remains modest (~4.7% in 2025), indicating limited pricing power and some sensitivity to cost pressure.

Balance Sheet

Leverage is elevated but improving: debt relative to equity has declined from ~2.15x (2021) to ~1.11x (2025), and equity has grown over the period. Total debt is still sizable (~¥580M in 2025), leaving the company more exposed to earnings volatility than lower-leverage peers, though return on equity is solid in recent years (~18% in 2025) following the sharp 2021 downturn.

Cash Flow

Cash generation improved in 2025 with operating cash flow of ~¥116M and free cash flow of ~¥53M, a strong rebound from weak 2024 levels. Still, cash flow has been inconsistent (including negative operating cash flow and free cash flow in 2020–2021), and recent free cash flow is not consistently tracking earnings (free cash flow was only ~46% of net income in 2025), suggesting working-capital or investment swings that can pressure liquidity.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.96B	2.02B	1.88B	1.79B	1.67B	1.58B
Gross Profit	802.19M	785.31M	772.42M	783.88M	744.24M	684.72M
EBITDA	132.51M	147.77M	94.68M	87.78M	107.36M	-208.07M
Net Income	102.32M	95.88M	73.42M	44.96M	49.24M	-280.54M
Balance Sheet
Total Assets	1.31B	1.40B	1.34B	1.36B	1.33B	1.40B
Cash, Cash Equivalents and Short-Term Investments	823.50M	803.66M	824.30M	878.86M	822.28M	853.15M
Total Debt	567.39M	580.47M	595.48M	650.49M	705.50M	755.00M
Total Liabilities	828.96M	877.09M	871.69M	957.67M	978.71M	1.05B
Stockholders Equity	477.19M	520.61M	465.27M	395.37M	350.53M	351.20M
Cash Flow
Free Cash Flow	0.00	53.49M	11.12M	105.01M	11.60M	-120.78M
Operating Cash Flow	0.00	116.35M	21.83M	111.27M	58.30M	-92.68M
Investing Cash Flow	0.00	-76.89M	-19.87M	-1.41M	-40.07M	225.08M
Financing Cash Flow	0.00	-60.10M	-55.44M	-55.01M	-49.50M	-45.07M

PA Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 276.00
• 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:4766, the sentiment is Negative. The current price of 276 is above the 20-day moving average (MA) of 258.85, above the 50-day MA of 268.34, and above the 200-day MA of 272.28, indicating a bearish trend. The MACD of -11.17 indicates Positive momentum. The RSI at 28.43 is Positive, neither overbought nor oversold. The STOCH value of 5.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4766.

PA Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
4766	63 Neutral	¥2.53B	26.36	―	―	8.11%	255.15%
6563	59 Neutral	¥3.27B	37.64	―	―	5.06%	37.14%
6558	52 Neutral	¥1.98B	-4.88	―	―	-12.60%	-335.07%
3900	51 Neutral	¥10.63B	-25.21	―	2.24%	32.39%	-127.51%
9331	46 Neutral	¥1.41B	-6.04	―	―	3.33%	-80.47%
6198	43 Neutral	¥2.06B	-18.54	―	2.66%	-10.61%	-160.10%