ERI Holdings Co., Ltd. (6083) AI Stock Analysis

• Market Cap: ¥30.74B
• Dividend Yield: 1.66%
• Average Volume (3M): 22.68K
• Price to Earnings (P/E): 17.0
• Beta (1Y): 0.57
• Revenue Growth: 17.36%
• EPS Growth: 70.92%
• Country: JP
• Employees: 1,512
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 68.63
• Shares Outstanding: 7,832,400
• 10 Day Avg. Volume: 14,690
• 30 Day Avg. Volume: 22,683
• PEG Ratio: 2.10
• Price to Book (P/B): 2.53
• Price to Sales (P/S): 0.81
• P/FCF Ratio: 39.86
• 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: 78 Outperform
• Price Target: ¥4,419.00 ▲(12.59% Upside)

ERI Holdings Co., Ltd. receives a strong overall stock score driven by robust financial performance and technical analysis. The company's solid revenue growth and profitability, coupled with strong market momentum, are key strengths. However, cash flow management issues and overbought technical indicators slightly temper the score. Valuation is fair but not particularly attractive, which also impacts the overall assessment.

Positive Factors

Revenue Growth

The company's consistent revenue growth indicates a strong market position and effective business model, enhancing long-term profitability.

Market Position

Long-term contracts with major manufacturers ensure a steady revenue stream and reinforce ERI Holdings' competitive position in key industries.

Profitability

Strong profit margins reflect efficient cost management and pricing power, supporting long-term financial health and shareholder value.

Negative Factors

Cash Flow Management

Challenges in cash flow management can constrain operational flexibility and investment capacity, potentially impacting future growth.

Debt Levels

Rising debt levels may increase financial risk and interest obligations, potentially affecting the company's ability to invest in growth opportunities.

EBITDA Margin Decline

A declining EBITDA margin may signal rising costs or pricing pressures, which could erode profitability if not addressed.

ERI Holdings Co., Ltd. Business Overview & Revenue Model

Company Description

ERI Holdings Co., Ltd. provides building confirmation and inspection services in Japan. It also provides housing performance evaluation services; and other services related to building and housing safety and evaluation. In addition, the company offers various solutions, such as assessment of compliance with the building standard law service; due diligence service, such as to create PCA reporting; inspection service, comprising of building condition assessment and construction audit; housing design performance evaluations of existing building; technical assessments for long-life quality housing; and other inspection services such as home inspection, CASBEE certification, etc. The company was incorporated in 2013 and is headquartered in Tokyo, Japan.

How the Company Makes Money

ERI Holdings generates revenue through multiple streams, primarily by offering IT consulting services, custom software development, and system integration projects to businesses. The company charges clients based on project scope, which may include hourly fees, fixed project fees, or ongoing service contracts. Key revenue streams include subscription fees from cloud services, licensing fees from proprietary software, and maintenance contracts for ongoing support. Additionally, partnerships with technology providers and industry stakeholders enhance ERI's service offerings and contribute to its earnings by expanding its market reach and providing bundled solutions.

ERI Holdings Co., Ltd. Financial Statement Overview

Summary

ERI Holdings Co., Ltd. exhibits strong revenue growth and profitability, supported by a solid balance sheet. However, cash flow management presents some challenges, which slightly tempers the overall financial performance score.

Income Statement

ERI Holdings Co., Ltd. has demonstrated strong revenue growth with a 7.79% increase in the latest year. The company maintains healthy margins, with a gross profit margin of 32.43% and a net profit margin of 6.55%. The EBIT margin is robust at 10.35%, indicating efficient operational management. However, there is a slight decline in EBITDA margin compared to previous years, which could be a point of concern.

Balance Sheet

The balance sheet shows a stable financial position with a debt-to-equity ratio of 0.40, indicating moderate leverage. The return on equity is strong at 20.40%, reflecting effective use of shareholder funds. The equity ratio stands at 47.21%, suggesting a solid equity base. However, the increase in total debt over the years should be monitored.

Cash Flow

Cash flow analysis reveals a challenging year with a significant drop in operating cash flow. The free cash flow growth rate is notably high due to a low base effect, but the operating cash flow to net income ratio is low at 0.61, indicating potential cash flow management issues. The free cash flow to net income ratio is healthy at 0.31, showing good cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.04B	19.77B	18.02B	17.41B	16.15B	14.40B
Gross Profit	7.09B	6.41B	6.35B	6.36B	5.56B	3.94B
EBITDA	2.24B	2.53B	2.36B	2.66B	2.30B	772.24M
Net Income	1.76B	1.29B	1.23B	1.53B	1.23B	264.76M
Balance Sheet
Total Assets	13.95B	13.44B	11.47B	10.86B	8.57B	6.48B
Cash, Cash Equivalents and Short-Term Investments	7.76B	5.86B	6.74B	6.41B	4.91B	2.65B
Total Debt	3.19B	2.55B	2.22B	2.38B	1.07B	1.03B
Total Liabilities	7.27B	7.05B	5.69B	5.78B	4.55B	3.45B
Stockholders Equity	6.64B	6.34B	5.73B	5.04B	3.98B	2.99B
Cash Flow
Free Cash Flow	0.00	403.28M	1.17B	1.28B	2.33B	116.40M
Operating Cash Flow	0.00	784.60M	1.51B	1.39B	2.42B	209.06M
Investing Cash Flow	0.00	-852.10M	-391.62M	-562.61M	52.20M	114.39M
Financing Cash Flow	0.00	-866.01M	-740.99M	563.87M	-210.42M	-422.22M

ERI Holdings Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3925.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6083, the sentiment is Positive. The current price of 3925 is above the 20-day moving average (MA) of 3698.00, above the 50-day MA of 3704.61, and above the 200-day MA of 2745.53, indicating a bullish trend. The MACD of 53.09 indicates Negative momentum. The RSI at 66.24 is Neutral, neither overbought nor oversold. The STOCH value of 84.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6083.

ERI Holdings Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6083	78 Outperform	¥30.74B	16.95	―	1.66%	17.36%	70.92%
7814	76 Outperform	¥38.44B	15.37	―	1.58%	9.04%	-0.91%
4809	72 Outperform	¥20.20B	9.86	―	3.36%	7.63%	11.87%
7377	72 Outperform	¥17.52B	9.25	―	3.84%	4.47%	0.42%
6086	67 Neutral	¥25.05B	18.85	―	1.34%	16.06%	31.24%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7320	44 Neutral	¥16.83B	-16.49	―	0.99%	18.21%	-179.11%

ERI Holdings Co., Ltd. Corporate Events

ERI Holdings Completes Share Repurchase to Boost Capital Efficiency

ERI Holdings Co., Ltd. has completed the acquisition of 120,000 of its own common shares through the Tokyo Stock Exchange’s off-auction own share repurchase trading system, ToSTNeT-3, at a cost of ¥354,840,000. This strategic move aims to enhance capital efficiency and provide the company with a flexible capital policy to adapt to changing business environments, as resolved by the Board of Directors.

ERI Holdings Sets Price for Treasury Stock Repurchase

ERI Holdings Co., Ltd. has announced the determination of the acquisition price for its treasury stock through off-auction own share repurchase trading. The purchase price is set at 2,957 yen per share, with a total acquisition cost capped at ¥396,000,000 for up to 120,000 shares, representing 1.58% of the total issued shares. This strategic move is aimed at optimizing the company’s capital structure and potentially enhancing shareholder value.

ERI Holdings Announces Share Buyback to Boost Capital Efficiency

ERI Holdings Co., Ltd. has announced a decision by its Board of Directors to acquire its own shares, aiming to enhance capital efficiency and maintain a flexible capital policy in response to the evolving business environment. The company plans to purchase up to 120,000 common shares, representing 1.58% of its total issued shares, with a maximum expenditure of ¥396,000,000, through the Tokyo Stock Exchange’s off-auction own share repurchase trading system.

ERI Holdings Boosts Q1 Sales and Earnings Amid Regulatory Changes

ERI Holdings Co., Ltd. reported increased sales and earnings in Q1, driven by a major revision to the Building Confirmation system and expansion through mergers and acquisitions. The company has successfully navigated regulatory changes by investing in organizational enhancements, positioning itself as a key player in the construction market while fulfilling its social responsibility to prevent procedural delays.

ERI Holdings Reports Robust Q1 Financial Growth and Dividend Increase

ERI Holdings Co., Ltd. reported a significant increase in its financial performance for the first quarter of the fiscal year ending May 31, 2026, with net sales rising by 31.1% and profit attributable to owners of the parent surging by 890.5% compared to the previous year. The company also announced an increase in its annual dividend forecast, reflecting a strong outlook for the fiscal year, which could positively impact shareholder value and market positioning.

ERI Holdings Affirms Independence Despite Significant Shareholding by HIKARI TSUSHIN

ERI Holdings Co., Ltd. has announced details regarding its relationship with HIKARI TSUSHIN, INC., which holds 22.49% of ERI’s voting rights through subsidiaries, classifying it as an ‘other affiliated company.’ Despite this significant shareholding, ERI maintains its independence with no material business or personnel transactions with HTI, ensuring autonomous management decisions.

ERI Holdings Restructures Reporting Segments Amid Strategic Expansion

ERI Holdings Co., Ltd. announced changes to its reporting segments in response to a new medium-term management plan aimed at operational restructuring and business expansion. The company has integrated several services into a new segment to align with regulatory changes in building codes and increased its focus on infrastructure and environmental services, reflecting a strategic shift to enhance its market position and capitalize on growth opportunities.