Improved Cash GenerationMaterially stronger operating and free cash flow in 2025 indicates the company's core operations are converting revenue into cash more reliably. High FCF alignment with net income (~0.97) improves funding for capex, dividends and debt reduction, enhancing financial flexibility over the medium term.

Consistent Revenue GrowthSustained top-line growth (~10% y/y in 2025) reflects stable demand and market traction for the company's services. Persistent revenue expansion supports scale, investment in capabilities and margin recovery potential, creating a durable base for earnings growth and cash generation over the next several quarters.

Improved Balance-Sheet ResilienceLower leverage (debt/equity ~0.26) and rising equity signal a stronger balance sheet and greater capacity to absorb shocks. This improved capital structure reduces refinancing risk and increases ability to fund strategic initiatives or weather cyclical pressure, supporting stability over the medium term.

Bears Say

Margin ErosionA multi-year decline in gross margin suggests cost pressure or pricing erosion in core services, constraining operating leverage. Persistently lower gross margins make it harder to translate revenue growth into meaningful profit improvement and limit long-term margin recovery absent structural cost or pricing fixes.

Thin Net ProfitabilityNet margins around 3–4% indicate limited profitability buffer after operating costs and non-operating items. Thin net earnings reduce retained earnings for reinvestment, limit shock absorption, and make the business more sensitive to small revenue or cost swings, constraining durable earnings growth.

Modest Cash Flow Margins & VolatilityOperating cash flow under 10% of sales and past volatility raise concerns about cash conversion consistency. While 2025 improved, lower cash-flow margins mean less buffer for investments or payouts and greater reliance on maintaining revenue momentum to sustain free cash flow over coming quarters.

5868 FAQ

What was Rococo Co. Ltd.’s price range in the past 12 months?

Rococo Co. Ltd. lowest stock price was ¥703.00 and its highest was ¥1223.00 in the past 12 months.

What is Rococo Co. Ltd.’s market cap?

Rococo Co. Ltd.’s market cap is ¥3.90B.

When is Rococo Co. Ltd.’s upcoming earnings report date?

Rococo Co. Ltd.’s upcoming earnings report date is May 14, 2026 which is in 61 days.

How were Rococo Co. Ltd.’s earnings last quarter?

Rococo Co. Ltd. released its earnings results on Feb 13, 2026. The company reported ¥7.99 earnings per share for the quarter, beating the consensus estimate of N/A by ¥7.99.

Is Rococo Co. Ltd. overvalued?

According to Wall Street analysts Rococo Co. Ltd.’s price is currently Overvalued. Get more investment ideas with TipRanks Premium

Does Rococo Co. Ltd. pay dividends?

Rococo Co. Ltd. pays a Annually dividend of ¥35 which represents an annual dividend yield of 0.94%. See more information on Rococo Co. Ltd. dividends here

What is Rococo Co. Ltd.’s EPS estimate?

Rococo Co. Ltd.’s EPS estimate for its next earnings report is not yet available.

How many shares outstanding does Rococo Co. Ltd. have?

Rococo Co. Ltd. has 3,727,100 shares outstanding.

What happened to Rococo Co. Ltd.’s price movement after its last earnings report?

Rococo Co. Ltd. reported an EPS of ¥7.99 in its last earnings report, beating expectations of N/A. Following the earnings report the stock price went down -1.647%.

Which hedge fund is a major shareholder of Rococo Co. Ltd.?

Currently, no hedge funds are holding shares in JP:5868

What is the TipRanks Smart Score and how is it calculated?

Smart Score combines eight research factors - such as analyst recommendations, hedge fund trends, and technical indicators - to measure a stock’s outlook. These signals are unified into a single score that reflects bullish or bearish momentum. See detailed methodology

Company Description

Rococo Co. Ltd.

Rococo Co. Ltd. is an IT consulting services company. The company provides IT outsourcing services, including PC-life cycle management support, helpdesk, kitting, infrastructure and network configuration, and resident engineer services; DX promotion support services; BPO services; and system development, maintenance, and introduction support services. It also offers AUTH thru, a face recognition access control system; AUTH thru KEY, a system that links an electric lock to the facial recognition entrance and exit control system; RocoTime, an attendance management system; tike-series, a ticketing system; and Re-tass LIVE for one-to-one online streaming services. The company was founded in 1994 and is based in Osaka, Japan.