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

• Market Cap: ¥9.97B
• Dividend Yield: 4.89%
• Average Volume (3M): 11.72K
• Price to Earnings (P/E): 20.3
• Beta (1Y): 0.23
• 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: ¥3,274.00 ▲(11.74% 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

Consistent top‑line expansion — a 6.12% year‑over‑year increase and multi‑year revenue growth trend — indicates sustained demand for Kids Smile's childcare and after‑school services. Durable revenue momentum supports scale economics, reinvestment capacity and longer‑term earnings stability.

Improving Margins

Improvements in gross, EBIT and EBITDA margins point to better cost control and operating leverage in the education services model. Structural margin expansion enhances operating cash generation as revenues scale and strengthens the company’s ability to fund growth without eroding profitability.

Stable Balance Sheet

A solid equity base (~42.7%) and moderate leverage (D/E ~0.71) provide financial resilience for cyclical enrollment or cost pressures. This durability reduces refinancing risk, supports measured capital allocation and underpins multi‑quarter operational continuity and strategic investments.

Negative Factors

Free Cash Flow Volatility

Negative free cash flow growth and capex-driven volatility weaken the company’s internal funding capacity. Persistent FCF swings increase reliance on external financing for expansion or shareholder returns, and make capital allocation and dividend consistency more uncertain over the medium term.

Low Return on Equity

A muted ROE (~2.3%) signals limited efficiency in converting shareholder equity into profits. Without improved asset utilization, higher margins, or strategic capital redeployment, returns to equity holders and long‑term EPS growth are likely to remain constrained relative to stronger peers.

Thin Net Profitability

A net margin near 1% leaves little buffer against cost inflation, regulatory or enrollment shocks in the education sector. Such thin profitability makes long‑term earnings and cash generation sensitive to operational disruptions and demands sustained revenue growth and margin discipline to build resilience.

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

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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	1.97B	1.92B	1.59B	1.25B	1.02B	844.05M
EBITDA	1.21B	1.17B	1.06B	830.32M	626.71M	324.94M
Net Income	238.35M	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	4.60B	4.04B	3.97B	5.19B	5.48B
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	769.61M	886.82M	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: Negative
• 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 3026.45, below the 50-day MA of 3103.52, and above the 200-day MA of 2511.20, indicating a neutral trend. The MACD of -15.05 indicates Negative momentum. The RSI at 48.82 is Neutral, neither overbought nor oversold. The STOCH value of 28.45 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	¥16.69B	8.49	―	1.63%	4.07%	11.48%
4668	78 Outperform	¥17.68B	13.55	―	3.81%	9.96%	252.72%
9470	75 Outperform	¥44.43B	28.75	―	2.28%	7.30%	60.93%
4714	71 Outperform	¥32.97B	14.97	―	5.00%	―	―
7084	64 Neutral	¥9.97B	20.28	―	4.89%	8.68%	34.16%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
7097	62 Neutral	¥12.74B	36.70	―	0.84%	8.44%	17.98%