Universal Entertainment (6425) AI Stock Analysis

• Market Cap: ¥76.86B
• Dividend Yield: 3.09%
• Average Volume (3M): 197.69K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.08
• Revenue Growth: -22.76%
• EPS Growth: -424.10%
• Country: JP
• Employees: 7,437
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Leisure
• EPS (TTM): -30.07
• Shares Outstanding: 80,195,000
• 10 Day Avg. Volume: 111,050
• 30 Day Avg. Volume: 197,690
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥1,009.57
• Price Target Upside: 3.65% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 47 Neutral
• Price Target: ¥1,009.00 ▲(3.59% Upside)

The overall stock score is primarily impacted by the company's weak financial performance and negative valuation metrics. Technical analysis indicates neutral to bearish momentum, further weighing down the score. The absence of earnings call insights and corporate events leaves these areas unaddressed.

Universal Entertainment Business Overview & Revenue Model

Company Description

Universal Entertainment Corporation, together with its subsidiaries, manufactures, develops, and sells Pachislot and Pachinko machines in Japan. The company operates in two segments, Amusement Equipment Business and Integrated Resort Business. The company also develops Falcon X, a peripheral system for parlors; and Hot Stadium, a digital signage system, as well as operates OKADA MANILA, a casino resort in the Philippines. In addition, it operates Universal Kingdom, a members-only mobile Website; and develops and supplies Pachislot simulation applications for smartphones, as well as engages in real estate development business. The company was formerly known as Aruze Corp. and changed its name to Universal Entertainment Corporation in November 2009. Universal Entertainment Corporation was founded in 1969 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Universal Entertainment generates revenue through several key streams. The primary source of income comes from the development, manufacturing, and sale of pachinko and pachislot machines, which are widely used in gaming parlors across Japan. These machines require regular updates and replacements, ensuring a steady demand. The company also earns significant revenue from its integrated resort operations, particularly through its flagship property, Okada Manila, a large-scale casino resort in the Philippines. This resort contributes to earnings through various channels, including gaming operations, hospitality services, and recreational facilities. Additionally, partnerships and collaborations with other companies in the gaming and entertainment industry enhance its earnings potential by expanding market reach and diversifying its product offerings.

Universal Entertainment Financial Statement Overview

Summary

Universal Entertainment faces significant financial challenges, with declining revenues and profitability impacting its overall financial health. While the balance sheet shows a relatively stable equity position, the negative cash flow and profitability trends present risks. The company needs to address its revenue decline and improve cash generation to stabilize its financial situation.

Income Statement

Universal Entertainment has shown a significant decline in revenue from 2023 to 2024, with revenue dropping by approximately 29.4%. The Gross Profit Margin decreased from 55.5% in 2023 to 59.5% in 2024, indicating a slight improvement in cost efficiency. However, the Net Profit Margin has turned negative at -12.3% in 2024, from 15.9% in 2023, reflecting a decline in profitability. The EBIT and EBITDA margins have also deteriorated substantially over the year.

Balance Sheet

The company's Debt-to-Equity Ratio has increased slightly, indicating higher leverage, but remains manageable. The Return on Equity (ROE) has turned negative in 2024, from 7.3% in 2023, due to negative net income. The Equity Ratio improved slightly to 58.4% in 2024, suggesting a solid equity base relative to total assets.

Cash Flow

Universal Entertainment's cash flow situation is concerning, with Free Cash Flow turning negative at -7.04 billion in 2024 from a positive 16.28 billion in 2023. The Operating Cash Flow to Net Income ratio indicates challenges in converting profits into cash, as operating cash flow decreased significantly. The Free Cash Flow to Net Income ratio also reflects the company's struggle to maintain positive cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	119.18B	126.33B	179.00B	141.00B	90.44B	90.87B
Gross Profit	68.77B	75.10B	99.33B	78.34B	46.54B	50.09B
EBITDA	16.46B	30.64B	71.25B	41.23B	14.06B	8.59B
Net Income	-26.57B	-15.57B	28.44B	11.51B	-19.05B	-19.22B
Balance Sheet
Total Assets	603.94B	632.79B	628.01B	596.18B	572.38B	568.50B
Cash, Cash Equivalents and Short-Term Investments	22.00B	24.07B	46.75B	38.07B	31.22B	37.35B
Total Debt	178.33B	187.43B	174.93B	173.53B	171.84B	158.07B
Total Liabilities	247.98B	263.06B	239.62B	246.86B	233.46B	210.93B
Stockholders Equity	355.96B	369.73B	388.39B	349.31B	338.92B	357.58B
Cash Flow
Free Cash Flow	0.00	-7.04B	16.28B	16.43B	-6.92B	-8.78B
Operating Cash Flow	0.00	1.52B	28.02B	24.46B	1.75B	3.11B
Investing Cash Flow	0.00	-13.37B	-10.12B	-9.00B	-7.04B	-18.50B
Financing Cash Flow	0.00	-9.80B	-11.33B	-11.25B	-1.82B	14.44B

Universal Entertainment Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 974.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6425, the sentiment is Negative. The current price of 974 is below the 20-day moving average (MA) of 1032.35, below the 50-day MA of 1011.18, and below the 200-day MA of 1037.88, indicating a bearish trend. The MACD of -7.77 indicates Positive momentum. The RSI at 38.47 is Neutral, neither overbought nor oversold. The STOCH value of 3.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6425.

Universal Entertainment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7458	80 Outperform	¥180.19B	9.95	15.56%	3.28%	5.69%	48.81%
7944	80 Outperform	¥89.30B	14.92	15.59%	4.98%	-4.39%	-27.30%
6412	72 Outperform	¥218.18B	13.97	6.29%	3.67%	31.75%	-9.71%
7867	71 Outperform	¥291.63B	16.91	15.37%	1.87%	17.05%	66.00%
4680	61 Neutral	¥385.68B	23.29	22.16%	1.27%	11.92%	33.70%
6425	47 Neutral	¥76.86B	―	-7.12%	3.09%	-22.76%	-424.10%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%