Kids Smile Holdings, Inc. (7084) AI Stock Analysis

• Market Cap: ¥9.91B
• Dividend Yield: 4.89%
• Average Volume (3M): 11.72K
• Price to Earnings (P/E): 34.7
• Beta (1Y): 0.24
• Revenue Growth: 8.68%
• EPS Growth: 34.16%
• Country: JP
• Employees: 1,241
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 36.09
• Shares Outstanding: 3,259,500
• 10 Day Avg. Volume: 5,070
• 30 Day Avg. Volume: 11,716
• PEG Ratio: 1.80
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 0.30
• P/FCF Ratio: 8.32
• 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: 64 Neutral
• Price Target: ¥3,253.00 ▲(11.02% Upside)
• Action: Downgraded Date: 02/13/26
• Date: Action: Downgraded 02/13/26

The score is driven primarily by solid financial performance (revenue growth, improving margins, and a stable balance sheet), tempered by weaker cash-flow quality. Technicals show a strong uptrend but extremely overbought conditions increase near-term risk, and valuation is constrained by a high P/E despite support from the dividend yield.

Positive Factors

Revenue growth trend

Sustained revenue growth (6.12% YoY) reflects ongoing demand for the company's childcare and after-school services. Durable top-line expansion supports scale economics, funds reinvestment in locations and programs, and underpins medium-term revenue visibility and strategic expansion plans.

Improving operating margins

Rising gross, EBIT and EBITDA margins indicate better cost control and operational leverage in the business model. Improved unit economics enhance sustainability of profitability, making revenue growth more likely to translate into durable earnings and funding for strategic initiatives over the next several quarters.

Stable balance sheet

A solid equity ratio (42.68%) and moderate leverage (D/E 0.71) provide financial flexibility to fund capex or targeted investments without excessive refinancing risk. This stability supports resilience through cycles and preserves capacity for strategic spending or opportunistic M&A over the medium term.

Negative Factors

Free cash flow volatility

FCF growth turned negative as capex rose, despite strong operating cash flow. Persistent capex-driven FCF weakness reduces discretionary funding for dividends, debt reduction or acquisitions, and increases reliance on external financing if investments continue, raising medium-term execution risk.

Low net profit margin

A net margin near 1% provides a thin earnings cushion against cost inflation or revenue pressure. Even with recent improvement, low bottom-line margins limit retained earnings for reinvestment and make profitability susceptible to modest adverse shocks, constraining durable cash generation capacity.

Modest return on equity

ROE of ~2.3% signals limited efficiency in converting equity into profits. Over the medium term this suggests asset or capital allocation inefficiencies; without higher margins or better asset turnover, shareholder returns may lag peers and growth may not translate into proportional equity value creation.

Kids Smile Holdings, Inc. Business Overview & Revenue Model

Company Description

Kids Smile Holdings Inc. offers childcare and early childhood education services primarily in Japan. It operates facilities, including after-school facilities, global schools, swimming school, preschool-integrated nurseries, licensed nurseries, and kindergarten classrooms. The company was founded in 2008 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Kids Smile Holdings, Inc. generates revenue through multiple streams, primarily from the sale of educational toys and wellness products, both online and through retail partnerships. The company has established significant relationships with major retailers, allowing for wide distribution of its products. Additionally, Kids Smile Holdings offers subscription-based services that provide ongoing access to digital educational content and wellness programs for families. This model not only creates a steady revenue stream but also encourages customer loyalty. The company may also engage in partnerships with schools and educational institutions, providing tailored solutions that further enhance its earnings potential.

Kids Smile Holdings, Inc. Financial Statement Overview

Summary

Income statement strength (78) reflects solid revenue growth and improving profitability/margins, while the balance sheet is stable (72) with a healthy equity ratio and moderate leverage. Cash flow is the main offset (65) due to softer free cash flow trends and capex-driven volatility.

Income Statement

Kids Smile Holdings, Inc. has demonstrated strong revenue growth over the years, with a notable increase of 6.12% from 2024 to 2025. The gross profit margin improved to 14.16% in 2025, indicating efficient cost management. The net profit margin rose to 1.11% in 2025, reflecting enhanced profitability despite a previously challenging year in 2022. EBIT and EBITDA margins also improved, showcasing stronger operational performance.

Balance Sheet

The company's balance sheet shows a solid equity base, with the equity ratio at 42.68% in 2025, indicating financial stability. The debt-to-equity ratio of 0.71 suggests moderate leverage, while ROE remains modest at 2.33%, leaving room for improvement in utilizing shareholder equity effectively. Overall, the balance sheet reflects a stable financial position with manageable liabilities.

Cash Flow

Operating cash flow remains strong, albeit with a slight decline from 2024 to 2025. The free cash flow to net income ratio indicates positive cash generation, although the free cash flow growth rate turned negative due to increased capital expenditures. The operating cash flow to net income ratio of 6.13 demonstrates efficient cash conversion from net income, though cash flow volatility remains a concern.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	13.90B	13.66B	12.87B	11.86B	10.66B	9.11B
Gross Profit	1.98B	1.93B	1.59B	1.26B	1.03B	858.82M
EBITDA	1.22B	1.21B	1.11B	1.22B	1.95B	1.58B
Net Income	237.84M	151.56M	132.31M	188.08M	686.31M	547.98M
Balance Sheet
Total Assets	11.87B	15.22B	14.16B	13.85B	14.66B	13.94B
Cash, Cash Equivalents and Short-Term Investments	2.12B	4.67B	3.59B	2.77B	3.15B	2.14B
Total Debt	2.59B	4.59B	4.01B	3.92B	5.11B	5.38B
Total Liabilities	5.61B	8.72B	7.84B	7.65B	8.65B	8.65B
Stockholders Equity	6.25B	6.50B	6.32B	6.20B	6.01B	5.29B
Cash Flow
Free Cash Flow	0.00	498.35M	769.33M	885.36M	1.26B	-576.71M
Operating Cash Flow	0.00	929.47M	976.09M	1.18B	2.28B	1.60B
Investing Cash Flow	0.00	-413.81M	-224.42M	-347.61M	-1.02B	-2.33B
Financing Cash Flow	0.00	562.40M	70.50M	-1.21B	-241.01M	1.34B

Kids Smile Holdings, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2930.00
• 50DMA: Negative
• 100DMA: Positive
• 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:7084, the sentiment is Positive. The current price of 2930 is below the 20-day moving average (MA) of 3221.55, below the 50-day MA of 3073.04, and above the 200-day MA of 2415.04, indicating a neutral trend. The MACD of -35.81 indicates Positive momentum. The RSI at 43.94 is Neutral, neither overbought nor oversold. The STOCH value of 22.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7084.

Kids Smile Holdings, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2152	83 Outperform	¥16.79B	14.11	―	1.63%	4.07%	11.48%
2179	74 Outperform	¥4.57B	9.32	―	2.60%	8.85%	-1.34%
4645	68 Neutral	¥3.52B	3.79	―	2.20%	1.82%	208.53%
7084	64 Neutral	¥9.91B	34.72	―	4.89%	8.68%	34.16%
4705	63 Neutral	¥3.26B	-23.72	―	5.52%	-3.09%	-305.97%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
7097	62 Neutral	¥13.16B	17.13	―	0.84%	8.44%	17.98%