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

• Market Cap: ¥25.47B
• Dividend Yield: 3.49%
• Average Volume (3M): 47.64K
• Price to Earnings (P/E): 29.0
• 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: 26,653,900
• 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: 7.50
• 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: ¥1,129.00 ▲(12.90% 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

Balance sheet improvement

Significant reduction in leverage (debt/equity 0.51→0.18) alongside a strong ROE of 22.54% materially improves financial flexibility. Lower leverage reduces interest burden and insolvency risk, enabling durable capacity for capital allocation, M&A or higher shareholder distributions over the medium term.

Strong cash conversion

High cash conversion—operating cash flow to net income of 1.89 and free cash flow to net income of 1.78—indicates the company reliably converts accounting profits into cash. Durable cash generation supports sustained dividends, organic investment and a liquidity buffer that reduces dependence on external financing over the coming quarters.

High margins and steady revenue

Revenue growth of 4.67% with a very high gross margin (66.87%) and solid operating margins (EBIT 9.93%, EBITDA 12.87%) suggests structural pricing power or low cost of goods sold. Such durable profitability depth supports consistent operating earnings and resilience to demand swings, aiding medium-term profitability stability.

Negative Factors

Declining EPS

EPS contracted by about 17.5%, signaling weakening earnings per share momentum. Persistent EPS decline can erode investor returns, constrain dividend or buyback capacity, and reflect underlying profit or capital structure pressure that could limit recovery over the next several quarters if not addressed.

Modest top-line growth

Underlying revenue growth near 2.6% is modest, indicating relatively slow organic expansion. Limited top-line momentum can restrict the company’s ability to scale fixed-cost leverage, compress unit economics improvement, and slow the pace at which investments translate into materially higher earnings over a 2–6 month horizon.

Declining free cash flow

Free cash flow declined by 3.12% year-over-year despite strong conversion ratios, indicating emerging cash-generation headwinds. A sustained FCF decline would constrain capital allocation choices—dividends, capex, or strategic initiatives—and could pressure liquidity or force greater reliance on balance-sheet adjustments.

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.

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	16.12B	16.25B	14.46B	13.12B
EBITDA	3.59B	3.31B	3.03B	2.78B
Net Income	1.62B	1.54B	773.00M	1.39B
Balance Sheet
Total Assets	22.77B	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	3.02B	3.25B	-927.00M	2.52B
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: Negative
• Last Price: 1000.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 Negative. The current price of 1000 is below the 20-day moving average (MA) of 1022.95, below the 50-day MA of 1016.04, and above the 200-day MA of 927.65, indicating a neutral trend. The MACD of -5.86 indicates Positive momentum. The RSI at 42.55 is Neutral, neither overbought nor oversold. The STOCH value of 35.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥53.96B	20.65	―	3.33%	9.63%	11.40%
5845	74 Outperform	¥25.47B	29.00	―	3.49%	3.45%	35.36%
6044	71 Outperform	¥11.07B	14.99	―	1.08%	18.17%	191.50%
6083	71 Outperform	¥37.24B	9.48	―	1.75%	17.36%	70.92%
8876	69 Neutral	¥299.66B	14.55	30.73%	2.20%	4.52%	―
6086	67 Neutral	¥23.15B	14.17	―	1.34%	16.06%	31.24%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%