Frontier Management, Inc. (7038) AI Stock Analysis

• Market Cap: ¥8.15B
• Dividend Yield: 6.22%
• Average Volume (3M): 31.06K
• Price to Earnings (P/E): 67.2
• Beta (1Y): 0.95
• Revenue Growth: 9.20%
• EPS Growth: -383.70%
• Country: JP
• Employees: 433
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): -22.87
• Shares Outstanding: 11,816,301
• 10 Day Avg. Volume: 22,340
• 30 Day Avg. Volume: 31,060
• PEG Ratio: 0.06
• Price to Book (P/B): 3.11
• Price to Sales (P/S): 0.91
• P/FCF Ratio: -3.30
• 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: ¥696.00
• Price Target Upside: 0.72% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 47 Neutral
• Price Target: ¥696.00 ▲(0.72% Upside)

The overall stock score is primarily influenced by financial performance challenges, including declining revenue and cash flow issues. Technical analysis shows mixed signals with potential for a rebound, but valuation remains unattractive due to negative profitability. The absence of earnings call data and corporate events limits further insights.

Frontier Management, Inc. Business Overview & Revenue Model

Company Description

Frontier Management Inc. provides management consulting, merger and acquisition (M&A) advisory, management executive, and business regeneration support services in Japan and internationally. The company also provides a range of business solutions in the areas of business succession, post M&A, cross-border M&A support, and risk and crisis advisory services. It serves retail and wholesale, restaurants and services, consumer product producers, industrial goods manufacturers, infrastructure, finance, information technology, and other markets. Frontier Management Inc. was incorporated in 2007 and is headquartered in Tokyo, Japan.

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

The company is facing financial challenges with declining revenue, profitability, and cash flow, despite a strong cash position. Rising leverage and a declining equity ratio are concerning, necessitating strategic improvements.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.48B	9.27B	10.03B	7.92B	5.74B	5.19B
Gross Profit	4.35B	4.26B	5.53B	4.69B	3.49B	3.11B
EBITDA	-883.73M	-588.72M	1.35B	959.94M	552.31M	614.99M
Net Income	-1.11B	-694.00M	780.68M	556.72M	338.71M	420.51M
Balance Sheet
Total Assets	18.33B	14.17B	10.87B	5.66B	3.82B	3.79B
Cash, Cash Equivalents and Short-Term Investments	8.76B	9.79B	6.36B	3.22B	1.79B	1.90B
Total Debt	5.67B	1.40B	1.59B	777.70M	0.00	0.00
Total Liabilities	7.76B	3.42B	4.05B	2.64B	1.37B	1.34B
Stockholders Equity	2.35B	2.70B	3.76B	2.96B	2.45B	2.45B
Cash Flow
Free Cash Flow	0.00	-2.55B	181.19M	1.16B	286.14M	453.63M
Operating Cash Flow	0.00	-2.52B	225.00M	1.25B	316.81M	456.10M
Investing Cash Flow	0.00	-63.85M	-1.38B	-486.91M	-31.52M	-59.30M
Financing Cash Flow	0.00	4.30B	3.79B	646.53M	-404.76M	-230.68M

Frontier Management, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 691.00
• 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:7038, the sentiment is Negative. The current price of 691 is below the 20-day moving average (MA) of 711.35, below the 50-day MA of 708.52, and below the 200-day MA of 706.74, indicating a bearish trend. The MACD of -4.01 indicates Positive momentum. The RSI at 42.26 is Neutral, neither overbought nor oversold. The STOCH value of 39.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥21.95B	9.34	―	―	48.34%	395.14%
6580	69 Neutral	¥13.79B	23.03	―	0.69%	43.35%	270.78%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7371	60 Neutral	¥8.05B	23.16	―	1.93%	-1.60%	40.43%
7038	47 Neutral	¥8.15B	67.23	―	6.22%	9.20%	-383.70%

Frontier Management, Inc. Corporate Events

Frontier Management Inc. Announces Corrections to Q1 Financial Results

Frontier Management Inc. announced corrections to its previously disclosed consolidated financial results for the first quarter of the fiscal year ending December 2025. The corrections involve numerical adjustments due to the inclusion of new subsidiaries in the consolidation scope, but they do not impact the company’s earnings for the quarter. The adjustments reflect changes in cash deposits, goodwill, and borrowings, among other financial metrics.

Frontier Management Inc. Reports First Half 2025 Financial Results

Frontier Management Inc. reported its consolidated financial results for the first half of the fiscal year ending December 31, 2025, showing a significant year-over-year increase in revenue by 26.6% to 5,771 million yen. However, the company faced operating and ordinary losses, with a profit attributable to owners of the parent at a negative 398 million yen. The company’s total assets increased to 18,332 million yen, but the equity to total assets ratio decreased to 12.5%. The company also noted significant changes in the scope of consolidation with the addition of four new companies.