Cota Co., Ltd. (4923) AI Stock Analysis

• Market Cap: ¥39.23B
• Dividend Yield: 1.81%
• Average Volume (3M): 63.93K
• Price to Earnings (P/E): 26.3
• Beta (1Y): 0.43
• Revenue Growth: 0.22%
• EPS Growth: 4.15%
• Country: JP
• Employees: 373
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Household & Personal Products
• EPS (TTM): 40.99
• Shares Outstanding: 32,934,660
• 10 Day Avg. Volume: 38,720
• 30 Day Avg. Volume: 63,933
• PEG Ratio: -14.86
• Price to Book (P/B): 3.51
• Price to Sales (P/S): 4.20
• P/FCF Ratio: 57.82
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ¥1,441.00 ▲(25.85% Upside)
• Action: Downgraded Date: 12/30/25
• Date: Action: Downgraded 12/30/25

The score is supported by strong financial performance (high margins and a zero-debt balance sheet) but held back by weak technicals (price below key moving averages and negative MACD) and a valuation that is only moderate given a 23.9 P/E and ~1.76% dividend yield.

Positive Factors

Zero debt and growing equity

A zero-debt balance sheet and a rising equity base materially lower financial risk and provide durable optionality. This conservatism supports investment in product development, salon programs, and weathering demand shocks without refinancing pressure, preserving long-term strategic flexibility and capital allocation choices.

High gross and operating margins

Sustained high gross and healthy operating margins reflect strong pricing power and a premium, salon-exclusive product mix. Such margin structure supports reinvestment in education and brand programs, funds dividend capacity, and cushions profitability against modest volume swings, underpinning durable earnings quality.

Salon-focused recurring consumable model

The business model centers on consumable haircare sold through salon partners with training and retention programs, creating recurring orders and channel stickiness. This structural demand from professional usage and retail sell-through supports predictable revenue streams and long-term customer lifetime value.

Negative Factors

Weaker cash conversion in 2025

A meaningful drop in operating cash flow and coverage of less than half of net income weakens cash quality. Over time this can constrain internal funding for marketing, inventory or R&D, increase sensitivity to working capital swings, and reduce the firm's buffer against cyclical downturns.

Declining margins and returns vs. prior peaks

A multi-year drift lower in net margins and ROE signals rising cost pressure or reinvestment diluting returns. If persistent, this reduces capital efficiency and the firm's capacity to generate outsized shareholder returns, making sustaining growth and dividend/supporting cash flows harder without margin recovery.

Modest top-line growth pace

Steady but slow revenue growth suggests limited near-term runway for rapid scale; reliance on domestic salon demand and consumable replenishment may cap expansion. Without acceleration from product extensions or geographic expansion, earnings growth may be constrained, limiting long-term upside.

Cota Co., Ltd. Business Overview & Revenue Model

Company Description

Cota Co., Ltd. manufactures and sells quasi drugs in Japan and internationally. The company offers hair and scalp care, styling, perm and curl, and coloring products. It serves beauty salons through sales offices and agents. Cota Co., Ltd. was incorporated in 1979 and is headquartered in Kyoto, Japan.

How the Company Makes Money

Cota Co., Ltd. generates revenue through the sale of its hair care products to professional salons and distributors. The company's primary revenue streams include direct sales to salons and bulk sales to distributors who then supply salons and retail outlets. By focusing on high-quality ingredients and innovative formulations, Cota Co., Ltd. maintains a competitive edge in the professional hair care market. The company may also engage in strategic partnerships and collaborations with salons and industry experts to enhance its market presence and drive sales growth.

Cota Co., Ltd. Financial Statement Overview

Summary

Strong fundamentals overall: steady revenue growth and high profitability (gross margin ~70%, operating margin ~19.6% in 2025) alongside a very conservative balance sheet with zero debt and growing equity. The main offsets are softer margins versus 2022–2023 peaks and weaker/volatile cash conversion in 2025 (operating cash flow ~44% of net income).

Income Statement

Revenue has grown steadily over the period (from 7.46B in 2020 to 9.38B in 2025), including ~3% growth in 2025. Profitability remains strong with a high gross margin (~70%) and solid operating margin (~19.6%) in 2025. However, margins and earnings have drifted down from 2022–2023 peaks (net margin fell to ~13.9% in 2025 from ~17.7% in 2023), signaling some cost pressure or reinvestment that is moderating bottom-line performance.

Balance Sheet

The company shows a very conservative balance sheet with zero debt across all reported years and a consistently growing equity base (8.58B in 2021 to 11.21B in 2025). Returns on equity remain healthy (~11.6% in 2025), though down versus earlier highs (~15.3% in 2023), indicating profitability has softened while capital has grown. Overall financial risk appears low given the lack of leverage.

Cash Flow

Cash generation is positive but has been volatile. Operating cash flow fell materially in 2025 (0.999B vs. 2.168B in 2024), and operating cash flow covers less than half of net income in 2025 (~44%), suggesting weaker cash conversion this year. Free cash flow remains positive (0.681B in 2025) and equates to ~68% of net income, but free cash flow has fluctuated meaningfully over time (e.g., 1.215B in 2020 down to 0.359B in 2023), which reduces cash flow quality and predictability.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	9.48B	9.38B	9.14B	8.80B	8.69B	7.76B
Gross Profit	6.59B	6.52B	6.37B	6.28B	6.21B	5.23B
EBITDA	2.24B	2.20B	2.27B	2.30B	2.23B	1.83B
Net Income	1.35B	1.30B	1.35B	1.56B	1.39B	1.17B
Balance Sheet
Total Assets	13.05B	14.88B	14.80B	13.69B	13.08B	11.59B
Cash, Cash Equivalents and Short-Term Investments	3.51B	5.17B	5.69B	5.37B	5.82B	5.44B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	2.43B	3.67B	3.76B	3.52B	3.54B	3.00B
Stockholders Equity	10.62B	11.21B	11.04B	10.18B	9.54B	8.58B
Cash Flow
Free Cash Flow	0.00	680.57M	906.18M	359.46M	749.57M	818.60M
Operating Cash Flow	0.00	998.56M	2.17B	1.30B	1.66B	1.38B
Investing Cash Flow	0.00	-389.42M	-1.21B	-473.40M	-1.29B	-88.42M
Financing Cash Flow	0.00	-1.14B	-485.84M	-922.50M	-434.21M	-331.97M

Cota Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1145.00
• 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:4923, the sentiment is Positive. The current price of 1145 is below the 20-day moving average (MA) of 1287.90, below the 50-day MA of 1204.52, and below the 200-day MA of 1317.50, indicating a bullish trend. The MACD of 34.13 indicates Negative momentum. The RSI at 72.55 is Negative, neither overbought nor oversold. The STOCH value of 82.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4923.

Cota Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4928	76 Outperform	¥161.05B	19.22	―	5.00%	1.41%	0.75%
4919	71 Outperform	¥89.11B	26.45	6.83%	3.53%	3.05%	-32.61%
4452	70 Outperform	¥3.02T	25.64	11.70%	2.41%	4.62%	47.68%
4922	69 Neutral	¥355.71B	23.54	2.72%	2.61%	1.37%	-5.60%
4923	66 Neutral	¥39.23B	26.30	―	1.81%	0.22%	4.15%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
4911	58 Neutral	¥1.32T	-32.41	―	2.11%	-1.20%	-2896.72%

Cota Co., Ltd. Corporate Events

Cota Offers Hit Haircare Product as Special Shareholder Benefit After Boosting Supply

Cota Co., Ltd. will grant its new haircare product “COTA COUTURE BASE Y-LINE” as a special shareholder benefit to investors holding 100 or more shares as of March 31, 2026, with one item per eligible shareholder to be shipped from early June 2026. The initiative, postponed from 2025 due to stronger-than-expected demand and temporary inventory shortages, follows expanded production capacity and aims to deepen shareholder understanding and usage of the company’s products; the featured leave-in treatment, launched in August 2024, has materially supported business performance and is underpinned by patented multi-layered hair cosmetic technology and a 2025 Good Design Award, underscoring Cota’s innovation credentials and strengthening its brand positioning in the professional haircare market.

The most recent analyst rating on (JP:4923) stock is a Hold with a Yen1220.00 price target. To see the full list of analyst forecasts on Cota Co., Ltd. stock, see the JP:4923 Stock Forecast page.

Cota Announces 1.05-for-1 Stock Split and Boost to Authorized Shares

Cota Co., Ltd. has approved a 1.05-for-1 stock split of its common shares, effective April 1, 2026, for shareholders of record on March 31, 2026, increasing its total issued shares from 32,934,663 to 34,581,396. The move is designed to lower the per-investment unit price, improve liquidity, and broaden its investor base, with no change to total capital; the company will handle fractional shares through collective sale or purchase and provide mechanisms for shareholders to adjust odd-lot holdings. In conjunction with the split, Cota will amend its Articles of Incorporation to raise the total number of authorized shares from 99,425,406 to 104,396,676, reinforcing flexibility for future equity-related actions and supporting its capital policy within the TSE Prime Market framework.

The most recent analyst rating on (JP:4923) stock is a Hold with a Yen1220.00 price target. To see the full list of analyst forecasts on Cota Co., Ltd. stock, see the JP:4923 Stock Forecast page.

Cota Posts Higher Nine-Month Earnings and Confirms Full-Year Forecasts

Cota Co., Ltd. reported non-consolidated results for the nine months ended December 31, 2025, with net sales rising 2.6% year-on-year to ¥7.6 billion and profit improving across all levels, including a 5.3% increase in operating profit to ¥1.8 billion and an 8.8% rise in net profit to ¥1.27 billion, lifting basic earnings per share to ¥45.81. The company’s financial position remained solid, with total assets of ¥15.4 billion, an equity ratio of 77.4%, and no changes to its full-year earnings or dividend forecasts, which project modest growth for the year ending March 31, 2026 and maintain an annual dividend of ¥20 per share, underscoring management’s confidence in stable performance and capital discipline, despite a small stock split planned for April 2026.

The most recent analyst rating on (JP:4923) stock is a Hold with a Yen1220.00 price target. To see the full list of analyst forecasts on Cota Co., Ltd. stock, see the JP:4923 Stock Forecast page.