Frontier Management, Inc. (7038) AI Stock Analysis

• Market Cap: ¥8.23B
• Dividend Yield: 6.22%
• Average Volume (3M): 53.36K
• Price to Earnings (P/E): 67.2
• Beta (1Y): 0.96
• Revenue Growth: 0.06%
• EPS Growth: -255.58%
• Country: JP
• Employees: 433
• Sector: Industrials
• Sector Strength: 83
• Industry: Specialty Business Services
• EPS (TTM): -11.02
• Shares Outstanding: 11,815,101
• 10 Day Avg. Volume: 48,280
• 30 Day Avg. Volume: 53,360
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥722.00
• Price Target Upside: 3.44% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 48 Neutral
• Price Target: ¥676.00 ▼(-3.15% Downside)

The overall stock score is driven by significant financial performance challenges, including declining revenue and profitability, and negative cash flow trends. Technical indicators suggest bearish momentum, further weighing on the stock's outlook. Valuation concerns are highlighted by a negative P/E ratio, indicating ongoing financial struggles. Immediate strategic adjustments are necessary to improve financial health and restore investor confidence.

Frontier Management, Inc. Business Overview & Revenue Model

Company Description

Frontier Management, Inc. (7038) is a Japanese company primarily engaged in the provision of investment advisory and management services. The company operates in the financial sector, offering a range of services including asset management and consulting. Frontier Management, Inc. caters to a diverse clientele, including individual investors, corporations, and institutional entities, providing tailored financial solutions to meet their investment needs.

How the Company Makes Money

Frontier Management, Inc. generates revenue through various streams primarily centered around investment advisory and management fees. The company charges fees for its asset management services, which are typically based on a percentage of the assets under management (AUM). Additionally, the firm may earn performance-based fees contingent upon achieving specific investment returns. Consulting services also contribute to its earnings by providing strategic financial advice to corporate clients. Key partnerships with financial institutions and corporate entities enhance its service offerings and expand its client base, further bolstering revenue potential.

Frontier Management, Inc. Financial Statement Overview

Summary

Frontier Management, Inc. faces financial challenges with recent declines in revenue, profitability, and cash flow, contrasting with its previous growth trajectory. The robust cash position offers some stability, but rising leverage and declining equity ratio are concerning. Strategic focus on improving operational efficiency and revenue growth is essential to reverse the current negative trends.

Income Statement

The company experienced a significant revenue decline from 2023 to 2024, falling from ¥10.03 billion to ¥9.27 billion. The gross profit margin has declined alongside the revenue, indicating cost management challenges. Additionally, the net loss in 2024 is a concern, as it reflects negative profitability trends. Historical growth from 2019 to 2022 was robust, but recent performance shows volatility, emphasizing the need for strategic adjustments.

Balance Sheet

The balance sheet highlights a strong cash position with significant cash reserves outstripping total debt, resulting in a negative net debt. This provides liquidity and operational flexibility. However, the debt-to-equity ratio has increased from 2023 to 2024, indicating higher leverage. The equity ratio dropped, pointing towards rising liabilities relative to assets, which could pose future financial risks if not managed properly.

Cash Flow

The cash flow situation is concerning, with a significant decline in both operating and free cash flows in 2024. This decline follows a previously positive trend, indicating operational challenges. The operating cash flow to net income ratio is negative, reflecting cash flow inefficiency. Historically, the company maintained positive cash flows, but recent cash flow strains highlight potential liquidity issues.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.27B	10.03B	7.92B	5.74B	5.19B
Gross Profit	4.26B	5.53B	4.69B	3.49B	3.11B
EBITDA	-588.72M	1.35B	959.94M	552.31M	614.99M
Net Income	-694.00M	780.68M	556.72M	338.71M	420.51M
Balance Sheet
Total Assets	14.17B	10.87B	5.66B	3.82B	3.79B
Cash, Cash Equivalents and Short-Term Investments	9.79B	6.36B	3.22B	1.79B	1.90B
Total Debt	1.40B	1.59B	777.70M	0.00	0.00
Total Liabilities	3.42B	4.05B	2.64B	1.37B	1.34B
Stockholders Equity	2.70B	3.76B	2.96B	2.45B	2.45B
Cash Flow
Free Cash Flow	-2.55B	181.19M	1.16B	286.14M	453.63M
Operating Cash Flow	-2.52B	225.00M	1.25B	316.81M	456.10M
Investing Cash Flow	-63.85M	-1.38B	-486.91M	-31.52M	-59.30M
Financing Cash Flow	4.30B	3.79B	646.53M	-404.76M	-230.68M

Frontier Management, Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 698.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7038, the sentiment is Neutral. The current price of 698 is above the 20-day moving average (MA) of 678.45, below the 50-day MA of 698.08, and below the 200-day MA of 762.63, indicating a neutral trend. The MACD of -1.14 indicates Negative momentum. The RSI at 55.57 is Neutral, neither overbought nor oversold. The STOCH value of 81.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7038.

Frontier Management, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7318	84 Outperform	¥17.98B	8.58		―	26.97%	285.34%
6580	75 Outperform	¥14.19B	23.70		0.67%	44.22%	112.44%
7371	73 Outperform	¥8.17B	27.03		1.92%	-2.79%	17.28%
Sector *	58 Neutral	HK$13.23B	4.28	-2.97%	5.82%	2.91%	-48.85%
7038	48 Neutral	¥8.23B	67.23		6.22%	0.06%	-255.58%

Frontier Management, Inc. Corporate Events

Frontier Management Inc. Announces New Executive Officer System

Frontier Management Inc. has announced a new executive officer system effective June 1, 2025, with several key appointments, including Kazunori Matsumoto as Senior Managing Executive Officer and Global Head of Mergers & Acquisitions. This restructuring aims to enhance the company’s strategic operations and strengthen its market position, potentially impacting its stakeholders positively by aligning leadership with its growth objectives.

Frontier Management Inc. Reports Q1 FY2025 Financial Results Amid Strategic Expansion

Frontier Management Inc. reported its consolidated financial results for the first quarter of the fiscal year ending December 2025, showing a 12.7% increase in net sales compared to the previous year. Despite the rise in sales, the company experienced a decline in operating income and a net loss attributable to owners of the parent, reflecting challenges in the current economic environment. The company has also expanded its scope of consolidation by including four new companies, indicating a strategic move to enhance its market position. However, the equity ratio has decreased, suggesting a potential impact on financial stability.