Solasto Corp. (6197) AI Stock Analysis

• Market Cap: ¥96.26B
• Dividend Yield: 2.47%
• Average Volume (3M): 1.21M
• Price to Earnings (P/E): 20.7
• Beta (1Y): 0.71
• Revenue Growth: 1.86%
• EPS Growth: 1370.48%
• Country: JP
• Employees: 33,884
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 13.23
• Shares Outstanding: 94,741,790
• 10 Day Avg. Volume: 3,043,910
• 30 Day Avg. Volume: 1,212,820
• PEG Ratio: 0.14
• Price to Book (P/B): 1.86
• Price to Sales (P/S): 0.31
• P/FCF Ratio: 7.73
• 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): 44.7
• Revenue Forecast (FY): ¥140.41B

• Rating: 68 Neutral
• Price Target: ¥965.00 ▲(92.61% Upside)
• Action: Downgraded Date: 02/18/26
• Date: Action: Downgraded 02/18/26

The score is driven primarily by improving financial performance (rapid TTM revenue growth, better operating margin, strong cash conversion, and reduced leverage). Technicals are mixed with short-term weakness but a still-supportive longer-term uptrend, while valuation appears reasonable but not notably discounted.

Positive Factors

Revenue Acceleration

A sustained TTM revenue surge of +74.8% signals stronger market demand or successful service expansion. Over the next 2-6 months this scale gain should support pricing leverage, higher utilization of fixed costs, and continued top-line momentum that underpins durable cash generation and strategic reinvestment.

Improving Operating Margin

Operating margin improvement from ~3.3% to ~5.1% reflects better cost control or mix shift. If structural (cost base optimization, higher-margin services), this improvement increases resilience to reimbursement and wage pressures, supports free cash flow, and provides room to invest in growth without eroding returns.

Strong Cash Conversion & Lower Leverage

High FCF conversion (~0.95x NI) plus materially improved leverage (debt/equity ~0.73) strengthens financial flexibility. Durable cash conversion supports debt servicing, dividend capacity and reinvestment. Improved leverage reduces refinancing risk and increases optionality for M&A or capex over months ahead.

Negative Factors

Thin Net Profitability

A net margin near ~3.2% leaves limited buffer against cost inflation, reimbursement cuts, or demand slowdowns. With modest absolute profitability, small revenue or cost swings can materially impact earnings and cash flow, raising operational and financial sensitivity over the medium term.

Eroding Gross Margin

A multi-year gross margin decline indicates structural pressure—pricing erosion, higher input/labor costs, or unfavorable mix. Persisting lower gross margins constrain operating leverage and long-term margin recovery, making earnings and cash generation more dependent on sustained high revenue growth.

Cash-Flow Volatility

Historical swings in free cash flow growth suggest working-capital or timing risks that can create uneven liquidity. With meaningful absolute debt noted in reports, cash-flow volatility increases refinancing and operational risk, potentially forcing defensive measures if adverse events occur within the next few quarters.

Solasto Corp. Business Overview & Revenue Model

Company Description

Solasto Corp. (6197) is a leading provider of healthcare services in Japan, focusing primarily on the management of medical facilities and the provision of various healthcare-related solutions. The company operates in multiple sectors including outpatient services, rehabilitation, and nursing care. Solasto is committed to enhancing the quality of healthcare delivery through innovative services and technology-driven solutions, catering to both patients and healthcare providers.

How the Company Makes Money

Solasto Corp. generates revenue through multiple streams, predominantly from its medical facility management services, which include outpatient clinics and rehabilitation centers. The company receives fee-for-service payments from patients and health insurance providers for the medical services rendered. Additionally, Solasto earns income from its nursing care services, which include home care and institutional care for the elderly. Key revenue streams also include partnerships with local governments and healthcare institutions that seek to improve healthcare accessibility and efficiency. The company continuously explores opportunities for expansion and collaboration in the healthcare sector, contributing to its overall financial performance.

Solasto Corp. Financial Statement Overview

Summary

Strong TTM revenue acceleration (+74.8%) and improving operating margin (~5.1% vs ~3.3% FY2024) support the score. Free cash flow conversion is solid (~0.95x net income) and leverage improved (debt-to-equity ~0.73). The main constraint is thin profitability (~3.2% net margin) and some historical cash-flow volatility.

Income Statement

TTM (Trailing-Twelve-Months) revenue shows a sharp acceleration (+74.8%), but profitability remains modest for the sector with ~15.2% gross margin and ~3.2% net margin. Operating profitability improved versus prior years (TTM operating margin ~5.1% vs ~3.3% in FY2024), suggesting better cost control/volume leverage. The key weakness is margin pressure versus earlier years (gross margin down from ~17–18% in FY2021–FY2022 to ~15% in TTM), leaving earnings more sensitive to cost inflation or reimbursement/price constraints.

Balance Sheet

Leverage has improved materially: debt-to-equity declined from ~1.39 (FY2024) and ~1.42 (FY2022) to ~0.73 in TTM, supporting a healthier risk profile. Returns on shareholder capital are solid (TTM return on equity ~19%), consistent with the recent earnings recovery. A remaining watch item is that the business still carries meaningful absolute debt and operates with relatively thin margins, which can amplify downside if profitability softens.

Cash Flow

Cash generation is a strength: TTM free cash flow is high relative to earnings (free cash flow is ~0.95x net income), indicating profits are converting well into cash. Free cash flow also rebounded strongly in TTM (growth ~+14.8) after declines in FY2024 and FY2025, improving financial flexibility. The main weakness is volatility in cash flow growth over the past several years, suggesting working-capital and/or investment timing can create uneven year-to-year cash outcomes.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	140.12B	137.44B	135.14B	131.09B	117.24B	106.18B
Gross Profit	20.96B	20.75B	21.93B	21.75B	20.46B	18.86B
EBITDA	10.24B	9.85B	7.77B	8.82B	8.47B	7.91B
Net Income	4.24B	3.96B	2.26B	3.17B	3.50B	3.54B
Balance Sheet
Total Assets	68.75B	70.10B	75.20B	69.85B	70.75B	60.10B
Cash, Cash Equivalents and Short-Term Investments	12.40B	14.00B	15.12B	11.96B	10.34B	8.97B
Total Debt	16.73B	23.08B	28.52B	25.89B	28.65B	21.75B
Total Liabilities	45.10B	47.41B	54.72B	48.28B	50.60B	41.63B
Stockholders Equity	23.64B	22.68B	20.48B	21.57B	20.15B	18.47B
Cash Flow
Free Cash Flow	7.10B	5.46B	6.28B	7.69B	4.72B	5.78B
Operating Cash Flow	7.43B	5.88B	7.86B	9.01B	5.52B	6.73B
Investing Cash Flow	-908.00M	347.00M	-2.76B	-2.17B	-7.45B	-3.82B
Financing Cash Flow	-7.41B	-7.33B	-1.84B	-5.21B	3.20B	-5.72B

Solasto Corp. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 501.00
• 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:6197, the sentiment is Positive. The current price of 501 is below the 20-day moving average (MA) of 942.30, below the 50-day MA of 896.28, and below the 200-day MA of 584.79, indicating a bullish trend. The MACD of 20.38 indicates Negative momentum. The RSI at 70.85 is Negative, neither overbought nor oversold. The STOCH value of 90.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6197.

Solasto Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2374	75 Outperform	¥30.33B	17.64	―	2.48%	3.88%	0.31%
6062	72 Outperform	¥46.37B	14.37	―	2.63%	0.30%	-31.28%
6059	69 Neutral	¥7.77B	3.54	―	2.71%	1.26%	562.09%
6197	68 Neutral	¥96.26B	20.67	―	2.47%	1.86%	1370.48%
7071	62 Neutral	¥50.14B	14.99	―	0.91%	15.77%	-50.57%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
7061	45 Neutral	¥7.45B	27.36	―	1.41%	18.03%	-11.68%

Solasto Corp. Corporate Events

Solasto lifts FY2025 Q3 profit and keeps outlook, raises annual dividend

Solasto Corporation reported consolidated net sales of ¥105.6 billion for the first nine months of FY2025, up 2.6% year on year, while operating profit edged down 1.9% to ¥5.5 billion and ordinary profit rose 2.2% to ¥5.5 billion, lifting net income 8.4% to ¥3.6 billion and improving its capital adequacy ratio to 34.4%. The company kept its full-year forecast unchanged, projecting modest revenue and profit growth for FY2025 and signaling confidence in earnings stability, while also planning to raise the annual dividend from ¥20.0 to ¥22.0 per share, underscoring a continued commitment to shareholder returns despite only modest top-line expansion and flat operating margins.

The most recent analyst rating on (JP:6197) stock is a Buy with a Yen1095.00 price target. To see the full list of analyst forecasts on Solasto Corp. stock, see the JP:6197 Stock Forecast page.

Solasto Continues Share Buy-Back, Repurchasing 1.49 Million Shares to Date

Solasto Corporation has disclosed the latest progress of its ongoing share buy-back program authorized by its board in August 2025, reporting that it repurchased 169,900 shares of common stock for a total of ¥148.4 million via market purchases on the Tokyo Stock Exchange between January 1 and January 31, 2026. As of January 31, 2026, cumulative repurchases under this program have reached 1,488,200 shares for an aggregate ¥837.7 million, indicating continued execution of a sizeable capital allocation initiative that may support shareholder returns and signal management’s confidence in the company’s valuation.

The most recent analyst rating on (JP:6197) stock is a Buy with a Yen1048.00 price target. To see the full list of analyst forecasts on Solasto Corp. stock, see the JP:6197 Stock Forecast page.

Solasto Finalizes Terms of Children Business Spin-Off to Solasto KIDS NEXT

Solasto Corporation has approved and signed an absorption-type company split agreement to spin off its Children business into a wholly owned subsidiary, Solasto KIDS NEXT Corporation, with the split scheduled to take effect on April 1, 2026. The company finalized details of the transaction, including the timing and the specific assets and liabilities to be transferred, following a detailed review under Accounting Standards for Social Welfare Corporations and adjustments to align with the group’s financial strategy; as a result, the scope of transferred assets and liabilities was revised upward in book value terms while certain subsidiary shares were excluded from the transfer, clarifying the balance sheet impact of the reorganization for the Children business segment.

The most recent analyst rating on (JP:6197) stock is a Buy with a Yen867.00 price target. To see the full list of analyst forecasts on Solasto Corp. stock, see the JP:6197 Stock Forecast page.

Solasto Revamps Corporate Officer Structure and Creates New Business Operations Division

Solasto Corporation has announced a new corporate officer structure, effective April 1, 2026, following recommendations from its Nomination, Evaluation, and Compensation Committee and approval by the Board of Directors. President and CEO Toru Noda will continue as Chief Executive Officer, while senior and managing corporate officers are assigned to key roles overseeing IT strategy and business development, medical services, elderly care operations, and management functions. The company is also creating a Business Operations Division, underscoring a push toward more integrated, IT-driven and efficient business management, which is likely aimed at strengthening operational oversight and supporting future growth in its medical and elderly care businesses.

The most recent analyst rating on (JP:6197) stock is a Buy with a Yen867.00 price target. To see the full list of analyst forecasts on Solasto Corp. stock, see the JP:6197 Stock Forecast page.

Solasto Reports Progress on Ongoing Share Buyback Program

Solasto Corporation has reported the latest progress on its ongoing share buyback program authorized by its board in August 2025. During the period from December 1 to December 31, 2025, the company repurchased 172,800 shares of its common stock on the Tokyo Stock Exchange for a total of ¥117.3 million. Under the broader authorization to buy back up to 4.4 million shares or ¥1.4 billion by May 31, 2026, Solasto has cumulatively repurchased 1,318,300 shares for approximately ¥689.2 million as of December 31, 2025, indicating that the program is a significant but not yet fully utilized component of its capital allocation, with potential implications for shareholder returns and earnings per share going forward.

The most recent analyst rating on (JP:6197) stock is a Buy with a Yen855.00 price target. To see the full list of analyst forecasts on Solasto Corp. stock, see the JP:6197 Stock Forecast page.