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CORREC CO., LTD. (JP:6578)
:6578
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CORREC CO., LTD.
(6578)
Select Model
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Rating:72Outperform
Price Target:
¥447.00
▲(12.31% Upside)
Action:UpgradedDate:02/27/26
The score is driven primarily by strong financial performance (growth, improving profitability, and solid cash flow) with manageable leverage. Technicals are mixed—near-term weakness but longer-term trend support—while valuation is pressured by a negative P/E and only modest dividend yield.
Positive Factors
Revenue & Profit Growth
CORREC's reported strong revenue and profit growth with improving net margins indicates durable expansion of core business economics. Sustained top-line growth plus margin improvement supports reinvestment, enhances resilience to cycles, and increases capacity to fund strategic initiatives over multiple quarters.
Cash Flow Generation
Stable operating cash flow and rising free cash flow demonstrate reliable cash conversion from operations. This reduces refinancing dependence, funds capex and working capital needs internally, and provides management flexibility to pursue growth or returns without eroding the balance sheet over the medium term.
Balance Sheet Strength
A healthy equity ratio and manageable leverage signal a conservative capital structure that supports financial resilience. Improved ROE indicates better shareholder returns from existing capital. Together these traits preserve credit optionality and reduce vulnerability to economic stress over coming quarters.
Negative Factors
Rising Liabilities
The increase in total liabilities points to growing obligations that could outpace asset or cash-flow growth if unchecked. Over several months this can compress liquidity cushions, elevate interest or covenant risk, and constrain capital allocation unless matched by recurring cash generation or liability management actions.
Margin Structure
While net margins improved, subdued EBIT/EBITDA margins reveal underlying operating leverage or cost structure issues. Persistent lower operating margins limit free cash flow upside and leave profitability dependent on either sustained revenue growth or structural cost initiatives to realize durable margin expansion.
Earnings Volatility
A deeply negative EPS growth figure signals significant earnings volatility or one-off impacts that erode consistent profitability. If EPS recovery does not follow revenue gains, the company may face pressure to convert top-line momentum into reliable bottom-line results, risking investor confidence and reinvestment capacity.
CORREC CO., LTD. (6578) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥2.96B
Dividend Yield2.07%
Average Volume (3M)24.38K
Price to Earnings (P/E)33.6
Beta (1Y)0.85
Revenue Growth49.99%
EPS Growth142.46%
CountryJP
Employees366
SectorIndustrials
Sector Strength72
IndustryConsulting Services
Share Statistics
EPS (TTM)2.62
Shares Outstanding7,348,900
10 Day Avg. Volume12,410
30 Day Avg. Volume24,376
Financial Highlights & Ratios
PEG Ratio-1.56
Price to Book (P/B)2.23
Price to Sales (P/S)0.37
P/FCF Ratio14.16
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
CORREC CO., LTD. Business Overview & Revenue Model
Company DescriptionCORREC Co., Ltd., together with its subsidiaries, engages in the sales promotion, media, and application development and operation businesses in Japan. It operates through three segments: Sales Promotion Business, Media Business, and Application Development and Management Business. The Sales Promotion Business segment provides sales, contracts, and collection agency services, as well as sells optical and solar panels. The Media Business segment operates Rooch, a digital media site, that provides real estate and local information; Ultema, a game strategy site; Matching App Plus and Match Life, digital media sites that provides matching map information; Care High Career Change, an information site for job-changers; and Ie AGENT, a real estate brokerage store. The Application Development and Management Business segment operates Pairful, a smartphone matching app. The company was formerly known as NLINKS Co., Ltd. and changed its name to CORREC Co., Ltd. in March 2024. CORREC Co., Ltd. was incorporated in 2010 and is headquartered in Tokyo, Japan.
How the Company Makes Moneynull
CORREC CO., LTD. Earnings Call Summary
Earnings Call Date:Jan 09, 2026
(Q3-2025)
| % Change Since: |
Next Earnings Date:Apr 09, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive picture: group revenue and profits grew YoY, several full-year forecasts were revised upward (including a double-digit upgrade to net income), Games, Music and sensors showed strong momentum, MAUs and streaming metrics reached record or robust growth, and shareholder returns continued via buybacks. Lowlights were concentrated in Pictures (marketing-driven profit decline and strike-related timing shifts), a modest sales decline in ET&S, near-term profit pressure in I&SS and Financial Services' volatility from market-related gains/losses. Management highlighted active mitigation actions (cost reductions, inventory control, supply-chain duplication, bond sales at Sony Life) and a clear strategic focus on entertainment and global expansion. Overall the positive operational and guidance trends outweigh the isolated segment challenges, indicating constructive forward momentum.Q3-2025 Updates
Positive Updates
Consolidated Quarterly Revenue and Profit Growth
Consolidated sales (excluding Financial Services) for Q3 rose 7% YoY to JPY 3,695.7 billion and operating income increased 10% YoY to JPY 423.0 billion. Consolidated sales including Financial Services grew 18% YoY to JPY 4,409.6 billion, operating income rose 1% YoY to JPY 469.3 billion (a Q3 record), and net income increased 3% YoY to JPY 373.7 billion.
Upward Revisions to Full-Year Forecasts
Full-year consolidated outlook was revised up: sales (ex-FS) to JPY 11,900 billion, operating income (ex-FS) up 2% to JPY 1,190 billion, and operating cash flow up 15% to JPY 1,660 billion. Including Financial Services, sales were revised up 4% to JPY 13,200 billion, operating income up 2% to JPY 1,335 billion, and net income up 10% to JPY 1,080 billion.
Games & Network Services: Strong Momentum and Profitability
G&NS sales increased 16% YoY to JPY 1,682.3 billion; operating income jumped 37% YoY to JPY 118.1 billion (Q3 record for the segment). PlayStation MAUs reached a record 129 million in December (+5% YoY), total play time +2% YoY (seventh consecutive quarter of YoY growth), PlayStation Plus revenue +20% YoY (USD basis) driven by ARPU increases and price revisions, and PS5-related promotion expense per unit declined ~20% YoY. PS5 inventory at end-December fell 46% YoY. FY forecast for the segment raised: sales +3% to JPY 4,610 billion and operating income +7% to JPY 380 billion.
Music Segment Expansion and Streaming Growth
Music sales rose 14% YoY to JPY 481.7 billion and operating income increased 28% YoY to JPY 97.4 billion. Streaming revenue increased ~9% YoY (USD basis) for recorded music and ~8% for publishing. Full-year Music sales and operating income forecasts were each revised up by 3% to JPY 1,790 billion and JPY 340 billion, respectively. Notable artist successes (e.g., Bad Bunny, Beyoncé) and strategic local investments in fast-growing markets (Latin America, India) were highlighted.
Sensor (I&SS) Momentum and Yield Recovery
I&SS cumulative sales for the 9 months rose 15% YoY. Production yields on key mobile image sensor products improved to nearly normal levels during the quarter. The average annual growth rate for mobile sensor sales (FY2022–FY2025) is expected at ~23% on a yen basis and ~11% on a USD basis, and full-year sales forecast was slightly increased to JPY 1,790 billion.
Financial Services: Revenue Gain and New-Policy Growth
Financial Services revenue for the quarter increased by JPY 406.7 billion YoY to JPY 718.5 billion. Sony Life new policy amounts grew 12% YoY on a cumulative basis through Q3. The full-year Financial Services revenue forecast was raised by JPY 390 billion to JPY 1,300 billion.
Shareholder Returns and Balance Sheet Actions
Completed a previously authorized buyback program (maximum JPY 250 billion) by November and established a new buyback facility of up to JPY 50 billion through May. Sony Life began selling some bonds and trading derivatives to mitigate net-asset pressure from rising interest rates, and the full-year forecast incorporates offsets from realized bond sale losses.
Strategic Partnerships and Content Wins
Became largest shareholder in Kadokawa to deepen cross-entertainment collaboration. First-party and partner titles earned major awards (e.g., Astro Bot won Game of the Year), Crunchyroll anime releases (Solo Leveling S2) performed strongly, and major game updates (Helldivers 2) boosted engagement.
Negative Updates
Pictures Operating Income Decline and Increased Marketing Costs
Pictures sales rose 9% YoY to JPY 398.2 billion, but operating income fell 18% YoY to JPY 34.0 billion primarily because of higher marketing expenses for theatrical releases. Some major theatrical releases were postponed due to industry strikes, shifting timing into later fiscal years.
ET&S Revenue Decline and Cost Actions
ET&S sales decreased 4% YoY to JPY 704.5 billion and imaging sales and profit decreased slightly. Inventory at end-December increased slightly to JPY 350 billion. Management expects the operating environment to remain severe, is implementing further fixed-cost reductions in Q4, and has reflected associated expenses in the current forecast.
I&SS Operating Income Pressure Despite Volume Gains
I&SS operating income declined 2% YoY to JPY 97.5 billion due to increased manufacturing costs and a quarter-on-quarter decline in mobile image sensor sales (though 9-month cumulative sales rose 15% YoY).
Financial Services Profitability Volatility
Although Financial Services revenue rose significantly, operating income decreased by JPY 30.9 billion YoY to JPY 46.4 billion due to the absence of prior significant market-related gains. Insurance service results fell 11% YoY in the quarter, highlighting sensitivity to market fluctuations and interest-rate exposure.
Content Timing and Strike-Related Delays
Production and release timing for certain major motion pictures (e.g., next Spider-Man and Jumanji) were postponed to the fiscal year ending March 31, 2027 due to strikes, creating timing risks for Pictures segment revenue and profitability.
Exposure to Geopolitical / Tariff Risk and Supply-Chain Costs
Management noted potential additional U.S. import tariffs and geographic risk; while preparedness measures (supply-chain duplication, U.S. strategic inventory) are in place and current financial impact is described as minor, tariff developments remain an operational risk.
Market Maturity and Smartphone/Automotive Headwinds
Smartphone market recovery is slow and mature; this creates uncertainty for mobile-sensor demand and pricing. Automotive sensor growth is affected by slower EV expansion in the U.S. and Europe, which could moderate outlook despite strong demand in China.
Company Guidance
Sony provided an upwardly revised full‑year outlook and strong Q3 guidance: consolidated Q3 sales excl. Financial Services were JPY 3,695.7bn (up 7% YoY) with operating income JPY 423.0bn (up 10%); consolidated Q3 sales including Financial Services were JPY 4,409.6bn (up 18%), operating income JPY 469.3bn (up 1%, a Q3 record) and net income JPY 373.7bn (up 3%). For the full year the company raised sales excl. Financial Services to JPY 11,900bn and operating income to JPY 1,190bn (up 2%), with operating cash flow revised up 15% to JPY 1,660bn; consolidated sales incl. Financial Services were raised to JPY 13,200bn (up 4%), operating income to JPY 1,335bn (up 2%) and net income to JPY 1,080bn (up 10%). Key segment guidance and metrics include G&NS sales of JPY 1,682.3bn in Q3 (up 16%) and operating income JPY 118.1bn (up 37%, Q3 record) with MAUs at a record 129m (Dec, +5% YoY), PS5 cumulative sell‑through comparable to PS4 at the same post‑launch point and promotion cost per PS5 unit down ~20% YoY; G&NS full‑year sales were revised to JPY 4,610bn (+3%) and operating income to JPY 380bn (+7%). Music Q3 sales JPY 481.7bn (+14%) and op. income JPY 97.4bn (+28%) prompted full‑year upward revisions to JPY 1,790bn sales and JPY 340bn operating income (both +3%); Pictures Q3 sales JPY 398.2bn (+9%) with op. income JPY 34.0bn (‑18%) and an unchanged full‑year forecast; ET&S Q3 sales JPY 704.5bn (‑4%) and op. income JPY 77.1bn (flat) with no change to FY guidance; I&SS Q3 sales JPY 500.9bn (flat) and op. income JPY 97.5bn (‑2%) with a slight FY sales lift to JPY 1,790bn; Financial Services Q3 revenue rose to JPY 718.5bn (up JPY 406.7bn YoY) with operating income JPY 46.4bn (down JPY 30.9bn YoY) and the full‑year Financial Services revenue forecast raised by JPY 390bn to JPY 1,300bn (op. income unchanged). The company also completed a JPY 250bn buyback and established a new JPY 50bn repurchase facility.CORREC CO., LTD. Financial Statement Overview
Summary
Strong revenue and profit growth with improved net margins and solid cash generation (stable operating cash flow and growing free cash flow). Balance sheet leverage is manageable with a healthy equity ratio, but rising liabilities and only moderate EBIT/EBITDA margins temper the score.Income Statement
CORREC CO., LTD. has demonstrated strong revenue growth, with a significant increase from the previous year. The gross profit margin is robust, indicating efficient cost management. The net profit margin has improved considerably, reflecting enhanced profitability. However, EBIT and EBITDA margins show room for improvement, suggesting potential operational inefficiencies.85
Very Positive
Balance Sheet
The company maintains a healthy equity ratio, indicative of a solid financial structure. The debt-to-equity ratio is manageable, suggesting prudent leverage use. Return on equity has improved, highlighting better returns for shareholders. However, the total liabilities have increased, which could pose future risks if not managed carefully.78
Positive
Cash Flow
Operating cash flow has remained stable, supporting the company's liquidity position. Free cash flow has grown, indicating improved cash generation capabilities. The operating cash flow to net income ratio is strong, reflecting efficient cash conversion. However, fluctuations in investing cash flow suggest potential volatility in capital expenditures.82
Very Positive
| Breakdown | TTM | Feb 2025 | Feb 2024 | Feb 2023 | Feb 2022 | Feb 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.28B | 6.47B | 3.94B | 4.12B | 4.82B | 4.05B |
| Gross Profit | 4.79B | 4.39B | 3.43B | 3.85B | 4.62B | 3.95B |
| EBITDA | 473.94M | 299.07M | 155.19M | 318.31M | -125.70M | -1.22B |
| Net Income | 172.71M | 19.94M | 88.79M | 201.76M | -371.05M | 108.74M |
Balance Sheet | ||||||
| Total Assets | 3.05B | 2.94B | 2.38B | 1.82B | 1.93B | 2.54B |
| Cash, Cash Equivalents and Short-Term Investments | 1.70B | 1.56B | 1.41B | 1.05B | 1.04B | 1.58B |
| Total Debt | 754.45M | 792.78M | 640.00M | 316.67M | 341.66M | 200.00M |
| Total Liabilities | 1.93B | 1.86B | 1.27B | 807.81M | 1.05B | 1.27B |
| Stockholders Equity | 1.11B | 1.08B | 1.10B | 1.01B | 876.70M | 1.27B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 170.12M | 162.68M | -41.42M | -646.53M | 660.87M |
| Operating Cash Flow | 0.00 | 174.61M | 175.05M | -41.21M | -644.53M | 703.78M |
| Investing Cash Flow | 0.00 | -131.46M | -33.65M | 22.11M | -63.13M | -181.80M |
| Financing Cash Flow | 0.00 | 105.84M | 323.95M | -23.70M | 119.13M | 170.14M |
CORREC CO., LTD. Technical Analysis
Negative
398.00
Price Trends
450.62
Negative
395.86
Positive
349.82
Positive
Market Momentum
-15.81
Positive
33.08
Neutral
10.20
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6578, the sentiment is Negative. The current price of 398 is below the 20-day moving average (MA) of 433.02, below the 50-day MA of 450.62, and above the 200-day MA of 349.82, indicating a neutral trend. The MACD of -15.81 indicates Positive momentum. The RSI at 33.08 is Neutral, neither overbought nor oversold. The STOCH value of 10.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6578.
CORREC CO., LTD. Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | ¥13.06B | 14.72 | ― | 2.91% | 7.68% | 39.87% | |
72 Outperform | ¥2.96B | 33.64 | ― | 2.07% | 49.99% | 142.46% | |
72 Outperform | ¥23.99B | 16.33 | ― | 3.50% | 15.91% | 36.39% | |
71 Outperform | ¥706.12B | 28.67 | ― | 1.30% | 25.07% | 26.47% | |
71 Outperform | ¥21.96B | 8.70 | ― | 2.18% | 17.87% | 5.31% | |
64 Neutral | ¥31.49B | 31.60 | ― | 4.39% | 2.46% | -31.77% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.