ARE Holdings, Inc. (5857) AI Stock Analysis

• Market Cap: ¥195.62B
• Dividend Yield: 3.61%
• Average Volume (3M): 302.09K
• Price to Earnings (P/E): 10.6
• Beta (1Y): 0.71
• Revenue Growth: 22.74%
• EPS Growth: -28.17%
• Country: JP
• Employees: 952
• Sector: Industrials
• Sector Strength: 72
• Industry: Waste Management
• EPS (TTM): 94.09
• Shares Outstanding: 79,708,690
• 10 Day Avg. Volume: 356,860
• 30 Day Avg. Volume: 302,093
• PEG Ratio: -0.26
• Price to Book (P/B): 1.20
• Price to Sales (P/S): 0.30
• P/FCF Ratio: 20.87
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: ¥3,009.00 ▲(0.43% Upside)

ARE Holdings, Inc. benefits from strong technical momentum and an attractive valuation, but financial performance concerns due to declining margins and high leverage pose risks. The stock's overbought technical indicators suggest caution despite the positive price trend.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and stability.

Diversified Revenue Streams

Diversified revenue streams reduce reliance on a single sector, providing stability and resilience against market fluctuations.

Operational Efficiency

Maintaining positive operational margins despite profitability pressures suggests strong cost management and operational control.

Negative Factors

Declining Profit Margins

Declining profit margins indicate increased cost pressures or pricing challenges, potentially impacting long-term profitability.

High Leverage

High leverage can limit financial flexibility and increase risk, especially in volatile market conditions, affecting future growth.

Cash Flow Challenges

Declining cash flow growth can strain operations and limit investment capacity, impacting the company's ability to fund future growth.

ARE Holdings, Inc. Business Overview & Revenue Model

Company Description

Asahi Holdings, Inc. engages in recycling and selling precious and rare metals in Japan, rest of Asia, and North America. The company operates in two segments, Precious Metals and Environmental Preservation. It recycles and sells various metals, including gold, silver, palladium, and platinum that are used in a range of industry fields, such as E-scrap, dentistry, jewelry, plating treatment, precision cleaning, and catalysts. The company also refines and processes precious metals, such as gold and silver; and recycles waste oil and sludge, wood waste, fire-proof bricks, glass products, waste acids and reagents, alkalis, and sludge. In addition, it engages in the collection, transportation, and treatment of industrial waste. The company was founded in 1952 and is headquartered in Kobe, Japan.

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 declining margins and increased debt levels, posing risks to financial stability. Cash flow management is strained, with significant declines in free cash flow growth.

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: 2996.00
• 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 2996 is above the 20-day moving average (MA) of 2744.15, above the 50-day MA of 2422.38, and above the 200-day MA of 1993.00, indicating a bullish trend. The MACD of 155.19 indicates Negative momentum. The RSI at 77.96 is Negative, neither overbought nor oversold. The STOCH value of 87.03 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
5698	77 Outperform	¥15.41B	13.09	―	2.47%	-9.37%	590.66%
1712	77 Outperform	¥31.01B	21.71	―	0.81%	15.80%	11.11%
9247	76 Outperform	¥80.24B	4.94	―	3.03%	24.61%	185.90%
9793	73 Outperform	$156.50B	17.21	10.88%	2.14%	6.63%	-3.05%
9336	73 Outperform	¥362.11B	25.86	―	1.38%	8.33%	1.73%
5857	72 Outperform	¥195.62B	10.60	―	3.61%	22.74%	-28.17%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

ARE Holdings, Inc. Corporate Events

ARE Holdings, Inc. Revises Financial Forecasts and Dividends Amid Strong Gold Sales

ARE Holdings, Inc. reported a significant increase in its actual financial results for the six months ended September 30, 2025, compared to its previous forecasts, driven by strong gold sales and record-high arbitrage gains in trading. As a result, the company has revised its full-year financial forecasts for the fiscal year ending March 31, 2026, and increased its interim dividend, reflecting a positive outlook amid rising gold prices and increased market activity.

The most recent analyst rating on (JP:5857) stock is a Hold with a Yen2512.00 price target. To see the full list of analyst forecasts on ARE Holdings, Inc. stock, see the JP:5857 Stock Forecast page.

ARE Holdings Issues First Unsecured Bonds to Boost Financial Flexibility

ARE Holdings, Inc., a company listed on the Tokyo Stock Exchange, has announced the issuance of its first unsecured straight bonds, aiming to diversify its financing methods and enhance financial stability. The 20 billion yen raised will be used for redeeming existing bonds or supporting North American operations, reflecting the company’s strategy to combine direct and indirect financing for stable growth.

The most recent analyst rating on (JP:5857) stock is a Buy with a Yen2284.00 price target. To see the full list of analyst forecasts on ARE Holdings, Inc. stock, see the JP:5857 Stock Forecast page.