Koyou Rentia Co., Ltd. (7081) AI Stock Analysis

• Market Cap: ¥14.09B
• Dividend Yield: 3.03%
• Average Volume (3M): 1.97K
• Price to Earnings (P/E): 7.1
• Beta (1Y): 0.23
• Revenue Growth: 5.72%
• EPS Growth: 60.38%
• Country: JP
• Employees: 893
• Sector: Industrials
• Sector Strength: 72
• Industry: Rental & Leasing Services
• EPS (TTM): 45.37
• Shares Outstanding: 11,122,600
• 10 Day Avg. Volume: 2,130
• 30 Day Avg. Volume: 1,970
• PEG Ratio: 0.30
• Price to Book (P/B): 1.13
• Price to Sales (P/S): 0.41
• P/FCF Ratio: 4.69
• 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: 76 Outperform
• Price Target: ¥1,537.00 ▲(19.05% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by solid financial health (notably a de-levered balance sheet and improved operating profitability) and strong valuation (low P/E with a dividend). Technicals are supportive but not strongly bullish, keeping the overall score in the mid-to-high range.

Positive Factors

De-levered balance sheet and rising equity

A materially de-levered balance sheet (debt-to-equity ~0.03) and consistent equity growth materially improve financial flexibility and lower solvency risk. That durability supports sustainable capex for fleet renewal, steadier dividends or opportunistic M&A across cycles.

Improving operating profitability and margins

Sustained improvement in gross and operating margins (gross ~41%, EBIT ~8.7%, EBITDA ~15.1%) indicates better pricing, utilization or cost control in rental operations. Higher operating profitability supports stronger recurring cash generation and funds long-term fleet investment.

Steady revenue growth and rental revenue model

A steady revenue trajectory with a 2025 step-up (4.9% growth) underpins a recurring rental fee model that builds customer relationships and predictable utilization. Diversified equipment mix across construction and industrial segments supports stable demand and utilization over time.

Negative Factors

Volatile free cash flow year-to-year

Free cash flow volatility—sharp rebound to ~¥3.0B in 2025 after a large drop to ~¥0.2B in 2024—reduces predictability for capex, fleet refresh and dividends. Persistent variability raises financing and execution risk when planning multi-year investments.

Modest net margin with limited bottom-line cushion

A modest net margin (~5.6%) leaves a thinner buffer against cost or pricing shocks and limits retained earnings for reinvestment. Even with operating margin gains, subdued net profitability constrains long-term capital accumulation and shareholder returns sustainability.

Returns on equity moderating as equity base grows

ROE weakening relative to prior years suggests profitability hasn't kept pace with equity expansion. Rising equity combined with moderating returns may signal declining capital efficiency and could pressure long-term return generation for shareholders if not reversed.

Koyou Rentia Co., Ltd. Business Overview & Revenue Model

Company Description

Koyou Rentia Co., Ltd. engages in the rental-related, space design, and product sales business in Japan and internationally. The company is involved in the renting of equipment to companies in construction site offices, corporate event venues, and business offices; handling of phone line extensions, partitions, and interior construction works; and sale of used rental products, as well as supports the proper disposal of leftover items following office relocations and closures. It also engages in the design, planning, and construction of condominium galleries; rental of equipment, interior coordination of model rooms, and sale of furniture; offers redesign services for condo buyers; and sale of office furniture, office equipment, and other fixtures for government agencies and companies. Koyou Rentia Co., Ltd. was incorporated in 1970 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Koyou Rentia generates revenue primarily through the rental of its machinery and equipment to construction companies, contractors, and other businesses requiring heavy-duty tools for their operations. The company charges rental fees based on the duration of the lease and the type of equipment used. Additionally, Koyou Rentia may earn income from maintenance and servicing of the rented equipment, as well as from selling used machinery. Strategic partnerships with construction firms and other industry stakeholders also enhance its market presence and contribute to revenue growth. The demand for construction and industrial services in the region further bolsters its earnings potential.

Koyou Rentia Co., Ltd. Financial Statement Overview

Summary

Strong balance sheet with very low leverage (debt-to-equity ~0.03) and improving operating profitability (EBIT margin ~8.7%, EBITDA margin ~15.1%). Offsets include modest net margin (~5.6%) and historically volatile free cash flow despite a strong 2025 rebound.

Income Statement

Revenue has expanded steadily over the period, with a clear step-up in 2025 (annual revenue growth of 4.9% vs. near-flat growth in 2024). Profitability is healthy for the sector, with 2025 gross margin at ~41% and improved operating profitability (EBIT margin ~8.7% and EBITDA margin ~15.1%). The main weakness is that net margin remains modest (~5.6% in 2025) and has not fully recovered to 2021 levels (~6.4%), indicating ongoing cost/expense or pricing pressure below the operating line.

Balance Sheet

The balance sheet strength improved materially, highlighted by very low leverage in 2025 (debt-to-equity ~0.03) versus meaningfully higher leverage earlier in the period (e.g., ~0.63 in 2020). Equity has grown consistently alongside asset growth, suggesting improving financial flexibility. A watch item is that returns on equity were higher in earlier years (2021–2023) than in 2024 based on the provided data, implying profitability relative to the equity base may be moderating even as the balance sheet de-risks.

Cash Flow

Cash generation is positive and strengthened notably in 2025, with operating cash flow of ~¥5.0B and free cash flow of ~¥3.0B, a sharp rebound from the weak free cash flow in 2024 (~¥0.2B). However, cash flow has been volatile year-to-year (including a large free-cash-flow decline in 2024), and the provided cash conversion indicators are mixed (2025 shows improvement versus 2024, but consistency remains a concern).

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	33.09B	34.70B	31.86B	30.96B	26.19B	23.99B
Gross Profit	13.26B	14.31B	12.62B	12.53B	11.49B	9.96B
EBITDA	4.70B	5.26B	4.26B	4.27B	3.97B	4.06B
Net Income	1.79B	1.94B	1.55B	1.60B	1.25B	1.53B
Balance Sheet
Total Assets	19.03B	20.53B	18.55B	19.56B	17.44B	15.45B
Cash, Cash Equivalents and Short-Term Investments	2.95B	3.56B	2.10B	2.93B	2.38B	2.11B
Total Debt	583.43M	323.69M	1.25B	1.87B	2.97B	2.62B
Total Liabilities	7.39B	7.91B	7.49B	9.78B	9.20B	8.23B
Stockholders Equity	11.64B	12.63B	11.06B	9.78B	8.24B	7.22B
Cash Flow
Free Cash Flow	0.00	3.04B	221.40M	1.57B	1.11B	1.87B
Operating Cash Flow	0.00	5.05B	2.35B	3.88B	3.04B	3.26B
Investing Cash Flow	0.00	-2.11B	-2.25B	-1.96B	-2.81B	-1.99B
Financing Cash Flow	0.00	-1.57B	-925.32M	-1.37B	32.96M	-1.27B

Koyou Rentia Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1291.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7081, the sentiment is Negative. The current price of 1291 is below the 20-day moving average (MA) of 1328.20, below the 50-day MA of 1345.66, and above the 200-day MA of 1191.49, indicating a neutral trend. The MACD of -21.19 indicates Positive momentum. The RSI at 35.64 is Neutral, neither overbought nor oversold. The STOCH value of 21.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7081.

Koyou Rentia Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9699	79 Outperform	¥122.95B	9.20	―	2.85%	8.02%	4.39%
7081	76 Outperform	¥14.09B	7.11	―	3.03%	5.72%	60.38%
8596	68 Neutral	¥32.48B	8.57	―	4.66%	-13.01%	9.74%
8424	64 Neutral	¥402.80B	11.14	―	3.62%	-0.03%	-42.34%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
5834	58 Neutral	¥46.79B	6.79	―	3.90%	0.17%	58.30%