ARE Holdings, Inc. (5857) AI Stock Analysis

• Market Cap: ¥276.41B
• Dividend Yield: 3.14%
• Average Volume (3M): 302.09K
• Price to Earnings (P/E): 15.0
• Beta (1Y): 0.79
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: ¥3,812.00 ▲(19.31% Upside)

The overall stock score of 60 reflects significant financial challenges, particularly in cash flow management and high leverage, which pose financial risks. However, strong technical momentum and a reasonable valuation with an attractive dividend yield provide some positive aspects. The absence of earnings call data and corporate events limits further insights.

Positive Factors

Diversified business model

ARE Holdings' combined real estate ownership, development and third‑party asset management platform spreads operational risk across activities and revenue sources. That structural mix supports resilience to localized property cycles and enables durable fee income and value‑creation through active asset management.

Multiple recurring revenue streams

The firm’s reliance on rental income and ongoing asset management fees creates steady, recurring cash inflows. Coupled with development and JV upside, these diversified, repeatable cash sources improve predictability of earnings over a multi‑month horizon and support reinvestment and payout flexibility.

Operational profitability maintained

Despite top‑line pressures, ARE retains positive EBIT/EBITDA margins and a positive ROE, indicating the core business converts revenue to operating profit efficiently. Sustained operating margins provide a foundation for recovery if revenue stabilizes and support long‑term cash generation potential.

Negative Factors

High financial leverage

A D/E of ~2.1 signals heavy reliance on debt financing, constraining financial flexibility. Elevated leverage increases refinancing and interest risks, reduces capacity for opportunistic investments, and can amplify earnings volatility during property market or rate stress over the coming months.

Weak cash flow generation

Negative operating cash flow and a dramatic FCF decline indicate the business is not converting accounting profits into liquid resources reliably. This impairs the company’s ability to service debt, fund capex or distributions without access to external financing—a structural vulnerability.

Declining revenue and margin pressure

A negative revenue trend and shrinking gross/net margins point to deteriorating pricing power or higher costs across the property and development portfolio. If sustained, this erodes free cash generation and return on invested capital, making deleveraging and strategic reinvestment more difficult.

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 a combination of rental income from its property portfolio and capital appreciation from real estate investments. The company also earns management fees by providing asset management services to third-party investors. Key revenue streams include leasing commercial and residential spaces, real estate sales, and partnerships with other investment firms for joint ventures in property development. ARE Holdings capitalizes on market trends to enhance its earnings, leveraging its established relationships in the real estate sector to secure lucrative investment opportunities.

ARE Holdings, Inc. Financial Statement Overview

Summary

ARE Holdings, Inc. is facing financial challenges with declining revenue growth and profitability margins. The high leverage and negative cash flow position indicate potential financial risks. While the company maintains operational efficiency, it needs to address cash flow and leverage issues to improve financial stability.

Income Statement

ARE Holdings, Inc. has experienced a decline in revenue growth with a negative rate of -8.52% in the TTM period. The gross profit margin has decreased over time, indicating pressure on profitability. Net profit margin has also declined, reflecting challenges in maintaining bottom-line efficiency. Despite these challenges, the company maintains a positive EBIT and EBITDA margin, suggesting operational efficiency in managing core activities.

Balance Sheet

The company's debt-to-equity ratio is high at 2.08, indicating significant leverage which could pose financial risk. However, the return on equity remains positive, albeit lower than previous periods, suggesting the company is still generating returns for shareholders. The equity ratio is stable, reflecting a consistent proportion of equity financing relative to total assets.

Cash Flow

ARE Holdings, Inc. faces challenges in cash flow management, with a significant decline in free cash flow growth by -1208.70% in the TTM period. The operating cash flow is negative, indicating potential liquidity issues. The free cash flow to net income ratio is positive, but the overall cash flow situation suggests the need for improved cash management strategies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	504.09B	506.21B	322.25B	274.21B	192.44B	164.78B
Gross Profit	35.42B	28.94B	21.36B	31.12B	34.66B	32.81B
EBITDA	27.99B	21.51B	17.14B	16.71B	28.97B	29.43B
Net Income	18.55B	14.32B	24.49B	10.93B	18.73B	25.73B
Balance Sheet
Total Assets	671.51B	490.04B	318.00B	287.45B	298.39B	244.80B
Cash, Cash Equivalents and Short-Term Investments	17.24B	17.55B	6.88B	21.56B	6.26B	12.19B
Total Debt	374.75B	289.86B	141.16B	144.36B	150.93B	104.84B
Total Liabilities	538.31B	363.69B	191.52B	180.49B	193.25B	146.90B
Stockholders Equity	133.17B	126.30B	126.48B	106.96B	105.14B	97.90B
Cash Flow
Free Cash Flow	-55.31B	7.26B	4.20B	31.62B	2.35B	-38.77B
Operating Cash Flow	-45.56B	14.69B	12.62B	36.75B	11.10B	-33.35B
Investing Cash Flow	-3.56B	250.00M	-28.71B	-3.94B	-7.82B	-2.80B
Financing Cash Flow	40.62B	-6.21B	7.05B	-23.82B	-6.04B	24.42B

ARE Holdings, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3195.00
• 50DMA: Positive
• 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:5857, the sentiment is Positive. The current price of 3195 is below the 20-day moving average (MA) of 3563.25, below the 50-day MA of 3268.66, and above the 200-day MA of 2317.60, indicating a bullish trend. The MACD of 152.95 indicates Positive momentum. The RSI at 60.35 is Neutral, neither overbought nor oversold. The STOCH value of 67.20 is Neutral, 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
9247	76 Outperform	¥88.05B	5.15	―	2.77%	24.61%	185.90%
9793	73 Outperform	¥165.06B	18.20	10.88%	2.20%	6.63%	-3.05%
5698	73 Outperform	¥25.77B	17.68	―	2.62%	-9.37%	590.66%
9336	73 Outperform	¥407.06B	29.07	―	1.30%	8.33%	1.73%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5857	60 Neutral	¥276.41B	14.98	―	3.14%	22.74%	-28.17%