Zenhoren Co., Ltd. (5845) AI Stock Analysis

• Market Cap: ¥27.06B
• Dividend Yield: 3.49%
• Average Volume (3M): 47.64K
• Price to Earnings (P/E): 18.1
• Beta (1Y): 0.87
• Revenue Growth: 3.45%
• EPS Growth: 35.36%
• Country: JP
• Employees: N/A
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 8.62
• Shares Outstanding: 26,653,000
• 10 Day Avg. Volume: 41,440
• 30 Day Avg. Volume: 47,643
• PEG Ratio: -1.16
• Price to Book (P/B): 3.15
• Price to Sales (P/S): 0.88
• P/FCF Ratio: 7.86
• 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: 74 Outperform
• Price Target: ¥1,185.00 ▲(18.50% Upside)
• Action: Reiterated Date: 10/23/25
• Date: Action: Reiterated 10/23/25

Zenhoren Co., Ltd. receives a strong overall stock score driven by its robust financial performance and reasonable valuation. The company's financial stability and attractive dividend yield are significant strengths. Technical analysis presents a mixed picture, with short-term bearish signals but longer-term strength. The absence of earnings call and corporate events data does not impact the score.

Positive Factors

High gross and healthy operating margins

Sustained high gross margin (66.87%) and solid EBIT/EBITDA margins indicate durable pricing power and efficient cost structure in the specialty services business. These margins support long-term cash generation, reinvestment capacity and resilience against modest revenue slowdowns.

Marked improvement in leverage and strong ROE

A substantial drop in debt-to-equity (0.51 -> 0.18) with ROE at 22.54% reflects stronger financial flexibility and efficient use of equity. Lower leverage reduces interest risk and increases capacity to fund capex, M&A or dividends without jeopardizing balance sheet stability.

High cash conversion and ample operating cash flow

Operating cash flow nearly twice net income and FCF ~1.8x net income indicate strong earnings quality and cash conversion. This durable cash generation supports ongoing operations, dividend payments and selective reinvestment despite short-term fluctuations in FCF growth.

Negative Factors

Negative EPS growth year-over-year

A notable decline in EPS (-17.5%) despite positive revenue and cash metrics signals profit per share pressure that may stem from non-operating items, share count changes or one-off costs. If persistent, it can weaken long-term earnings power and shareholder returns.

Year-over-year free cash flow contraction

Negative FCF growth indicates cash generation has weakened year-over-year. Even with strong conversion ratios, declining FCF can constrain investment, reduce buffer for dividends or share buybacks, and make the firm more sensitive to cyclical downturns if the trend continues.

Modest top-line growth

Mid-single-digit revenue growth (4.67%) in a specialty services sector may limit scalability of operating leverage. Without stronger organic growth or acquisitions, sustaining higher margins and accelerating returns could be challenging in the face of competition or slower market expansion.

Zenhoren Co., Ltd. Business Overview & Revenue Model

Company Description

Zenhoren Co.,Ltd. provides rent liability guarantee services in Japan. It offers rent guarantee services for residential buildings, stores and offices, parking lots, warehouses and trunk rooms, and fire insurance and real estate companies, as well as tuition fee guarantee services. The company was incorporated in 2001 and is headquartered in Naha, Japan.

How the Company Makes Money

Zenhoren Co., Ltd. generates revenue through the sale of its electronic components and systems to a diverse clientele, including manufacturers in the telecommunications and consumer electronics sectors. The company employs a multi-channel revenue model that includes direct sales to original equipment manufacturers (OEMs), partnerships with distributors, and online sales through its e-commerce platform. Key revenue streams include bulk orders for semiconductors, long-term contracts for circuit boards, and licensing agreements for proprietary technologies. Additionally, Zenhoren benefits from strategic partnerships with leading tech firms, enhancing its market reach and enabling collaborative product development, which further contributes to its earnings.

Zenhoren Co., Ltd. Financial Statement Overview

Summary

Zenhoren Co., Ltd. demonstrates strong financial performance with robust revenue growth, high profit margins, improved leverage, and efficient cash management. The company's financial metrics indicate a positive trajectory with a balanced approach to growth and stability.

Income Statement

Zenhoren Co., Ltd. has demonstrated strong revenue growth with a 4.67% increase from 2024 to 2025. The company maintains a robust gross profit margin of 66.87% and a healthy net profit margin of 6.32%. EBIT and EBITDA margins are also solid at 9.93% and 12.87%, respectively, indicating efficient operational management. The consistent growth in revenue and profitability metrics reflects a positive trajectory in the company's financial performance.

Balance Sheet

The balance sheet shows a significant improvement in the debt-to-equity ratio, decreasing from 0.51 in 2024 to 0.18 in 2025, indicating reduced leverage and improved financial stability. Return on equity is strong at 22.54%, showcasing effective utilization of equity. The equity ratio stands at 31.59%, suggesting a balanced capital structure. Overall, the company exhibits a stable financial position with reduced risk from debt.

Cash Flow

Zenhoren Co., Ltd. has achieved a notable free cash flow growth rate of -3.12% from 2024 to 2025, indicating efficient cash management. The operating cash flow to net income ratio is 1.89, and the free cash flow to net income ratio is 1.78, reflecting strong cash generation relative to net income. The company's cash flow metrics suggest a healthy ability to generate cash and sustain operations.

Breakdown	Mar 2025	Mar 2025	Mar 2024	Mar 2022
Income Statement
Total Revenue	25.66B	24.51B	23.85B	21.70B
Gross Profit	17.15B	17.32B	15.59B	14.30B
EBITDA	3.30B	3.33B	3.07B	2.78B
Net Income	1.62B	1.54B	773.00M	1.39B
Balance Sheet
Total Assets	22.76B	21.79B	20.43B	24.72B
Cash, Cash Equivalents and Short-Term Investments	7.77B	5.20B	3.87B	9.49B
Total Debt	1.32B	2.45B	5.43B	7.59B
Total Liabilities	15.57B	17.03B	18.97B	21.74B
Stockholders Equity	7.19B	4.76B	1.45B	2.98B
Cash Flow
Free Cash Flow	2.88B	2.97B	-1.16B	2.46B
Operating Cash Flow	3.06B	3.32B	-808.00M	2.61B
Investing Cash Flow	-668.00M	-560.00M	2.05B	-146.00M
Financing Cash Flow	-328.00M	-1.22B	-4.46B	-2.17B

Zenhoren Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1000.00
• 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:5845, the sentiment is Positive. The current price of 1000 is below the 20-day moving average (MA) of 1030.05, below the 50-day MA of 1013.60, and above the 200-day MA of 916.70, indicating a bullish trend. The MACD of 12.09 indicates Negative momentum. The RSI at 59.29 is Neutral, neither overbought nor oversold. The STOCH value of 48.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5845.

Zenhoren Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4658	78 Outperform	¥59.00B	17.38	―	3.33%	9.63%	11.40%
5845	74 Outperform	¥27.06B	18.07	―	3.49%	3.45%	35.36%
6044	71 Outperform	¥12.05B	14.34	―	1.08%	18.17%	191.50%
6083	71 Outperform	¥37.36B	16.27	―	1.75%	17.36%	70.92%
8876	68 Neutral	¥294.46B	14.01	30.73%	2.20%	4.52%	―
6086	67 Neutral	¥26.69B	19.06	―	1.34%	16.06%	31.24%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%