LTS, Inc. (6560) AI Stock Analysis

• Market Cap: ¥8.05B
• Dividend Yield: 1.34%
• Average Volume (3M): 12.15K
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.69
• Revenue Growth: 5.97%
• EPS Growth: -5.60%
• Country: JP
• Employees: 1,022
• Sector: Industrials
• Sector Strength: 72
• Industry: Consulting Services
• EPS (TTM): 50.24
• Shares Outstanding: 4,725,085
• 10 Day Avg. Volume: 13,890
• 30 Day Avg. Volume: 12,150
• PEG Ratio: -0.48
• Price to Book (P/B): 2.03
• Price to Sales (P/S): 0.56
• P/FCF Ratio: -20.72
• 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: 52 Neutral
• Price Target: ¥1,713.00 ▼(-19.65% Downside)
• Action: Downgraded Date: 02/18/26
• Date: Action: Downgraded 02/18/26

The score is held back primarily by the 2025 deterioration in revenue and the move to negative operating/free cash flow, alongside a strong downtrend and weak momentum signals. A reasonable P/E and modest dividend yield provide partial offset but do not fully counter the near-term financial and technical weakness.

Positive Factors

Diversified recurring revenue

LTS's mix of one-time product sales, cloud subscriptions and consulting creates multiple revenue streams and a recurring base. Subscription income improves revenue predictability and supports long-term customer relationships, reducing cyclicality and enabling more stable planning and reinvestment.

Improving leverage and equity growth

A materially lower debt-to-equity ratio and rising equity indicate stronger balance-sheet resilience versus 2023. Improved leverage expands financial flexibility for strategic investment or cushioning shocks, and reduces debt servicing risk, which supports durable operational execution over the medium term.

Multi-year revenue growth and healthy margins

Sustained revenue expansion through 2024 combined with solid gross margins implies competitive products and pricing power. Consistent margins provide room to absorb cost fluctuations and fund R&D or customer investments, supporting the company's ability to maintain profitability as it scales.

Negative Factors

2025 revenue and cash flow shock

A steep revenue drop and simultaneous swing to negative operating and free cash flow in 2025 materially impairs revenue visibility and internal funding capacity. If persistent, this can force reprioritization of investments, pressure margins, and raise the prospect of external financing or asset sales to bridge shortfalls.

Cash generation volatility

Volatile cash conversion undermines the company's ability to consistently self-fund operations, dividends, or growth initiatives. Recurring swings from healthy FCF to negative operating cash flow increase refinancing risk and complicate multi-quarter planning for working capital and capex.

Declining assets and meaningful absolute debt

A shrinking asset base reduces balance-sheet flexibility and potential collateral, while a still-significant absolute debt load limits strategic options. Combined with weaker cash flow, this can constrain investment, slow recovery initiatives, and increase vulnerability to prolonged demand weakness.

LTS, Inc. Business Overview & Revenue Model

Company Description

LTS, Inc. provides consulting, business process management, and digital utilization services in Japan. It offers business consulting services in the areas of business development, merger and acquisition, business revitalization, formulation of customer strategies and changes in customer channels, and construction of management foundations; IT consulting services in the areas of IT management support, support for IT implementation for project planning and introduction, new business transitions, IT development and construction of infrastructure, and IT outsourcing, as well as ERP system implementation, operation, and operational support; and HR consulting services related to business process performance measurement, human resource development, e-learning, and human resource development for process management. The company also provides business process management services, including business process modeling, performance measurement, transformation, and outsourcing, as well as outsourcing planning and human resource development for process management. In addition, it offers digital transformation services, such as technology research, advanced technology verification, data analysis, digital marketing, robotic process automation, artificial intelligence, and cloud integration. LTS, Inc. was incorporated in 2002 and is headquartered in Tokyo, Japan.

How the Company Makes Money

LTS, Inc. generates revenue through a multi-faceted business model primarily focused on product sales, subscription services, and consulting solutions. Key revenue streams include the sale of networking hardware and software licenses, which provide a one-time payment and ongoing maintenance contracts. Additionally, the company offers cloud-based services on a subscription basis, creating a steady income flow from recurring revenues. Strategic partnerships with major telecommunications providers and technology firms further enhance LTS's market reach and lead to joint ventures that can yield significant financial returns. The company also engages in consulting services, helping clients optimize their technology investments, which contributes to its overall revenue mix.

LTS, Inc. Financial Statement Overview

Summary

Multi-year growth and improving profitability through 2024 are positives, and leverage improved materially. However, 2025 shows a sharp revenue decline and a swing to negative operating/free cash flow, raising concerns about near-term earnings quality and cash conversion.

Income Statement

Revenue expanded strongly from 2020–2024, and profitability generally improved into 2024 with solid gross margin (~36%) and net margin (~5.9%). However, 2025 annual results show a sharp revenue decline (about -24.5% growth) and lower net income versus 2024, which raises concerns about demand/engagement softness and earnings durability despite still-positive operating profit.

Balance Sheet

Leverage has improved materially versus 2023 (debt-to-equity moved from ~1.45x in 2023 to ~0.85x in 2024), and equity has grown over time, supporting balance-sheet resilience. The main watch-out is that total debt remains meaningful in absolute terms, and total assets have trended down since 2023, implying less balance-sheet flexibility than the equity build alone suggests.

Cash Flow

Cash generation was healthy in 2023–2024, with 2024 free cash flow positive and covering a large portion of net income (about 72%). That said, 2025 annual cash flow deteriorated sharply to negative operating cash flow and negative free cash flow, signaling working-capital pressure and/or higher reinvestment; this volatility is the key financial risk in the statements provided.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	17.14B	17.10B	16.59B	12.24B	9.64B	7.38B
Gross Profit	5.97B	6.09B	5.90B	4.27B	3.21B	2.63B
EBITDA	1.76B	1.44B	1.84B	897.00M	454.47M	636.32M
Net Income	841.00M	696.00M	973.00M	456.00M	232.58M	388.41M
Balance Sheet
Total Assets	9.72B	10.03B	11.40B	11.98B	5.60B	5.08B
Cash, Cash Equivalents and Short-Term Investments	3.97B	3.38B	5.45B	3.85B	2.98B	2.43B
Total Debt	2.36B	2.92B	3.88B	5.19B	682.22M	965.88M
Total Liabilities	5.08B	5.27B	6.84B	8.36B	2.35B	3.00B
Stockholders Equity	4.64B	4.76B	4.56B	3.57B	3.24B	2.08B
Cash Flow
Free Cash Flow	0.00	-466.00M	560.00M	604.00M	-33.20M	331.65M
Operating Cash Flow	0.00	-326.00M	777.00M	647.00M	255.25M	421.96M
Investing Cash Flow	0.00	-135.00M	2.14B	-3.66B	-329.86M	-399.68M
Financing Cash Flow	0.00	-1.60B	-1.35B	4.07B	626.85M	-277.61M

LTS, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2132.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6560, the sentiment is Negative. The current price of 2132 is above the 20-day moving average (MA) of 1847.25, above the 50-day MA of 2035.58, and below the 200-day MA of 2145.48, indicating a bearish trend. The MACD of -108.53 indicates Positive momentum. The RSI at 38.88 is Neutral, neither overbought nor oversold. The STOCH value of 52.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6560.

LTS, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4490	71 Outperform	¥5.08B	6.47	―	―	0.36%	―
7034	71 Outperform	¥5.20B	25.25	―	―	283.85%	-35.61%
7039	70 Outperform	¥7.27B	12.93	―	2.94%	8.00%	3.22%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
9246	54 Neutral	¥6.20B	47.76	―	―	-1.71%	-303.36%
6560	52 Neutral	¥8.05B	11.39	―	1.34%	5.97%	-5.60%

LTS, Inc. Corporate Events

LTS Outlines FY2025 Results, Segment Overhaul and FY2026 Outlook

LTS, Inc. has released an outline of its financial results for FY2025 along with a strategic update and outlook. The disclosure highlights the company’s recent performance, upcoming reorganization of business segments, and planned shareholder return and capital management policies.

The company also presented its FY2026 earnings forecast and a medium- to long-term growth scenario aimed at strengthening its market position. These initiatives suggest an emphasis on more efficient operations, clearer segment reporting, and a capital strategy intended to align growth investments with enhanced returns to shareholders.

The most recent analyst rating on (JP:6560) stock is a Buy with a Yen2288.00 price target. To see the full list of analyst forecasts on LTS, Inc. stock, see the JP:6560 Stock Forecast page.

LTS, Inc. Posts Modest Sales Growth but Lower Profit, Targets Strong Rebound in 2026

LTS, Inc. reported consolidated net sales of ¥17.1 billion for the year ended December 2025, up 3.1% year on year, with operating profit rising 7.0% to ¥1.19 billion and ordinary profit up 21.0%. Profit attributable to owners of parent fell 28.5% to ¥696 million, yet the company strengthened its financial position, lifting its capital adequacy ratio to 46.3% and net assets per share to ¥1,055.68.

Cash and cash equivalents declined to ¥3.38 billion amid negative operating and investing cash flows and sizeable financing outflows, while the company continued shareholder returns with a year-end dividend of ¥35 per share and plans to raise it to ¥40 in 2026. For the fiscal year ending December 2026, LTS forecasts 7.0% sales growth to ¥18.3 billion and a 50.8% jump in profit attributable to owners of parent to ¥1.05 billion, reflecting expectations of improved profitability and a firmer earnings base despite the exclusion of ISIS Co., Ltd. from the consolidation scope and changes in accounting policies.

The most recent analyst rating on (JP:6560) stock is a Buy with a Yen2288.00 price target. To see the full list of analyst forecasts on LTS, Inc. stock, see the JP:6560 Stock Forecast page.

LTS, Inc. Outlines FY2025 Results and Strategic Roadmap

LTS, Inc., a TSE Prime Market-listed business services company, has released its FY2025 financial results and outlined a comprehensive update on its operations and strategic direction. The disclosure frames the company’s performance within a broader plan that includes segment reorganization, medium- to long-term growth initiatives, and policies for shareholder returns and capital management.

The company also presented its FY2026 earnings forecast, signaling expectations for future performance and operational priorities. Management’s focus on restructuring business segments and articulating a long-term growth scenario suggests an effort to sharpen its market positioning and provide greater visibility to investors and other stakeholders.

The most recent analyst rating on (JP:6560) stock is a Buy with a Yen2288.00 price target. To see the full list of analyst forecasts on LTS, Inc. stock, see the JP:6560 Stock Forecast page.

LTS Posts Modest Sales Growth but Lower Net Profit, Signals Strong 2026 Rebound

LTS reported consolidated net sales of ¥17.1 billion for the year ended December 2025, up 3.1% year on year, with operating profit rising 7.0% to ¥1.19 billion and ordinary profit climbing 21.0%, but profit attributable to owners of parent fell 28.5% to ¥696 million, partly reflecting equity-method impacts and other factors. The balance sheet showed total assets down to ¥10.0 billion while shareholders’ equity rose, lifting the capital adequacy ratio to 46.3%, though cash and cash equivalents declined sharply due to negative operating and investing cash flows and higher outflows from financing activities.

The company maintained its dividend with an increase in the year-end payout to ¥35 per share and forecasts a further rise to ¥40 in 2026, signaling confidence despite the profit drop. For the fiscal year ending December 2026, LTS projects 7.0% sales growth to ¥18.3 billion and a 50.8% jump in profit attributable to owners of parent to ¥1.05 billion, supported by a 34.9% increase in operating profit, while it also recorded the deconsolidation of ISIS Co., Ltd. and adopted revised accounting standards that affected reported figures.

The most recent analyst rating on (JP:6560) stock is a Buy with a Yen2288.00 price target. To see the full list of analyst forecasts on LTS, Inc. stock, see the JP:6560 Stock Forecast page.