ARE Holdings, Inc. (5857) AI Stock Analysis

• Market Cap: ¥165.46B
• Dividend Yield: 3.62%
• Average Volume (3M): 392.35K
• Price to Earnings (P/E): 11.3
• Beta (1Y): 0.73
• Revenue Growth: 58.33%
• EPS Growth: -41.60%
• Country: JP
• Employees: 952
• Sector: Industrials
• Sector Strength: 71
• Industry: Waste Management
• EPS (TTM): 47.51
• Shares Outstanding: 79,708,690
• 10 Day Avg. Volume: 254,540
• 30 Day Avg. Volume: 392,350
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥2,284.00
• Price Target Upside: 3.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 73 Outperform
• Price Target: ¥2,284.00 ▲(3.25% Upside)

ARE Holdings, Inc. benefits from strong technical momentum and reasonable valuation, making it attractive despite financial challenges. The stock's bullish trend and attractive dividend yield are significant positives, while financial performance highlights the need for improved profitability and reduced leverage.

Positive Factors

Revenue Growth

Consistent revenue growth indicates the company's ability to expand its market presence and effectively manage its diverse portfolio, contributing to long-term financial stability.

Diversified Revenue Streams

Diversified revenue streams reduce dependency on a single sector, enhancing resilience against sector-specific downturns and supporting sustained financial performance.

Operational Efficiency

Positive EBIT and EBITDA margins demonstrate effective cost management and operational efficiency, which are crucial for maintaining profitability despite margin pressures.

Negative Factors

Declining Margins

Declining margins indicate increasing cost pressures or pricing challenges, which could impact profitability and require strategic adjustments to sustain long-term growth.

High Leverage

High leverage poses financial risks, limiting flexibility and increasing vulnerability to interest rate changes, potentially impacting future investment capacity.

Cash Flow Challenges

Declining free cash flow growth suggests potential liquidity issues, which could constrain the company's ability to invest in growth opportunities and meet financial obligations.

ARE Holdings, Inc. Business Overview & Revenue Model

Company Description

ARE Holdings, Inc. (5857) is a diversified investment holding company primarily engaged in the real estate, technology, and financial services sectors. The company focuses on acquiring and managing a portfolio of assets across various industries, including commercial properties, innovative tech solutions, and financial investment services. ARE Holdings aims to leverage its expertise to create value through strategic investments and operational efficiencies, enhancing its overall market presence and financial performance.

How the Company Makes Money

ARE Holdings generates revenue through multiple key streams, including rental income from its real estate assets, fees from financial advisory services, and income derived from technology investments and partnerships. The company capitalizes on its property portfolio by leasing commercial spaces to businesses, providing a steady cash flow. Additionally, ARE Holdings engages in strategic partnerships with tech firms, allowing it to invest in emerging technologies and receive returns on these investments. The diversification of its revenue sources, coupled with effective asset management, plays a crucial role in contributing to the company's overall earnings.

ARE Holdings, Inc. Financial Statement Overview

Summary

ARE Holdings, Inc. shows strong revenue growth but faces challenges with declining margins and increased debt levels, posing risks to financial stability. Cash flow management is strained, with significant declines in free cash flow growth, indicating a need for improved profitability and reduced leverage.

Income Statement

ARE Holdings, Inc. has shown a consistent revenue growth trend, with a notable 8.85% increase in TTM. However, margins have been declining over the years, with the gross profit margin dropping from 18% in 2022 to 5.7% in TTM. The net profit margin also decreased, indicating pressure on profitability. Despite these challenges, the company maintains a positive EBIT and EBITDA margin, reflecting operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has increased significantly, reaching 2.29 in TTM, indicating high leverage. This poses a risk, especially with declining equity ratios. Return on equity has decreased from 26.28% in 2021 to 10.95% in TTM, suggesting reduced profitability for shareholders. The balance sheet shows a need for improved financial stability.

Cash Flow

ARE Holdings, Inc. experienced a significant decline in free cash flow growth, down by 31.3% in TTM. The operating cash flow to net income ratio is low at 0.047, indicating potential cash flow challenges. The free cash flow to net income ratio is below 1, suggesting that the company is not generating sufficient free cash flow relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	551.03B	506.21B	322.25B	274.21B	192.44B	164.78B
Gross Profit	31.37B	28.94B	21.36B	29.46B	34.66B	32.81B
EBITDA	23.47B	21.51B	17.14B	16.71B	28.97B	29.43B
Net Income	14.75B	14.32B	24.49B	10.93B	18.73B	25.73B
Balance Sheet
Total Assets	505.99B	490.04B	318.00B	287.45B	298.39B	244.80B
Cash, Cash Equivalents and Short-Term Investments	17.16B	17.55B	6.88B	21.56B	6.26B	12.19B
Total Debt	292.06B	289.86B	141.16B	144.36B	150.93B	104.84B
Total Liabilities	365.31B	363.69B	191.52B	180.49B	193.25B	146.90B
Stockholders Equity	140.63B	126.30B	126.48B	106.96B	105.14B	97.90B
Cash Flow
Free Cash Flow	4.99B	7.26B	4.20B	31.62B	2.35B	-38.77B
Operating Cash Flow	14.69B	14.69B	12.62B	36.75B	11.10B	-33.35B
Investing Cash Flow	-1.60B	250.00M	-28.71B	-3.94B	-7.82B	-2.80B
Financing Cash Flow	-12.10B	-6.21B	7.05B	-23.82B	-6.04B	24.42B

ARE Holdings, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2212.00
• 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:5857, the sentiment is Positive. The current price of 2212 is above the 20-day moving average (MA) of 2059.50, above the 50-day MA of 1969.60, and above the 200-day MA of 1828.82, indicating a bullish trend. The MACD of 64.66 indicates Negative momentum. The RSI at 71.34 is Negative, neither overbought nor oversold. The STOCH value of 80.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5857.

ARE Holdings, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5857	73 Outperform	¥165.46B	11.27		3.62%	58.33%	-41.60%
Sector *	63 Neutral	$10.70B	15.26	7.37%	2.02%	2.87%	-14.59%
DSKIF	―	$1.26B	19.11	11.27%	2.10%	―	―
9247	78 Outperform	¥82.35B	5.07		2.79%	29.51%	283.81%
1712	77 Outperform	¥20.36B	14.97		1.16%	-5.25%	-11.55%
9336	73 Outperform	¥344.13B	24.65		1.39%	8.10%	-1.24%
5698	67 Neutral	¥14.72B	12.50		3.09%	-5.98%	117.92%

ARE Holdings, Inc. Corporate Events

ARE Holdings Reports Strong Q2 Financial Performance with Increased Profitability

ARE Holdings, Inc. reported a significant increase in its financial performance for the three months ending June 30, 2025, with revenue rising by 48.6% compared to the previous year. The company’s total comprehensive income more than doubled, indicating a strong operational performance. The financial outlook for the year ending March 31, 2026, shows a slight decrease in revenue but an increase in operating profit, suggesting a strategic focus on profitability. The company maintained its dividend forecast, reflecting stability and commitment to shareholder returns.

ARE Holdings Announces Year-End Dividend of ¥40 Per Share

ARE Holdings, Inc. has announced the resolution to pay year-end dividends of surplus with a record date of March 31, 2025, amounting to ¥40 per share, totaling ¥3,096 million. This decision aligns with the company’s policy of maintaining a dividend payout ratio of approximately 40% while ensuring sufficient reserves for future growth through capital investment and M&A activities.