SERENDIP HOLDINGS Co. Ltd. (7318) AI Stock Analysis

• Market Cap: ¥32.62B
• Dividend Yield: N/A
• Average Volume (3M): 75.45K
• Price to Earnings (P/E): 9.1
• Beta (1Y): 1.45
• Revenue Growth: 72.32%
• EPS Growth: 1424.97%
• Country: JP
• Employees: 615
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 44.79
• Shares Outstanding: 19,062,317
• 10 Day Avg. Volume: 59,610
• 30 Day Avg. Volume: 75,446
• PEG Ratio: 0.01
• Price to Book (P/B): 1.02
• Price to Sales (P/S): 0.33
• P/FCF Ratio: -3.90
• 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: 79 Outperform
• Price Target: ¥1,983.00 ▲(91.97% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven mainly by strong financial performance (rapid revenue growth and improving margins/ROE), tempered by negative free cash flow and weak cash conversion. Technicals are supportive with the price above major moving averages and positive MACD, but overbought signals add near-term risk. Valuation is a positive contributor due to the low P/E.

Positive Factors

Strong Revenue Growth

Sustained revenue growth of 26.9% demonstrates expanding demand and scale in the company's core services. Over a 2-6 month horizon this growth supports reinvestment, better bargaining power with suppliers, and provides a foundation for continued margin expansion if maintained.

Improving Profitability & ROE

Material margin improvement and a 26.1% ROE indicate stronger operational efficiency and effective use of equity capital. These durability factors suggest the company can generate attractive returns on invested capital and sustain profitability through operational leverage.

Positive Operating Cash Flow

Positive operating cash flow indicates the core business generates cash from operations, supporting day-to-day needs and interest payments. Over months this provides financial flexibility to manage working capital and fund operations even if free cash flow is temporarily negative.

Negative Factors

Negative Free Cash Flow

A shift to negative free cash flow reduces internal funding for capex, M&A, or shareholder returns and increases reliance on external financing. Persisting FCF deficits can erode balance-sheet flexibility and constrain strategic initiatives or cycle management over a multi-month horizon.

Weak Cash Conversion

An OCF-to-net-income ratio of 0.14 signals poor conversion of reported profits into cash, suggesting working capital build or accruals are inflating earnings. This weak cash quality can pressure liquidity and raises the risk that earnings improvements won't translate into durable cash generation.

Moderate Leverage

A debt-to-equity of 1.65 reflects moderate leverage that increases fixed obligations and interest sensitivity. While manageable today, it reduces financial flexibility to fund growth or weather downturns, making the company more dependent on consistent operating cash flow in coming months.

SERENDIP HOLDINGS Co. Ltd. Business Overview & Revenue Model

Company Description

Serendip Holdings Co.,Ltd. operates business succession support, management consulting, M&A advisory, corporate revitalization support, corporate advisory, professional manager dispatch, and other incidental business in Japan. It provides dispatch of professional managers, management consulting, and engineer dispatch services; engages in co-investment of fund financial advisory services; automotive interior and exterior parts; and automobile precision parts. The company also offers automatic connector and battery-related automatic assembly machine; cream solder printing machines; and prototype production in development services. Serendip Holdings Co.,Ltd. was incorporated in 2006 and is headquartered in Nagoya, Japan.

How the Company Makes Money

SERENDIP HOLDINGS generates revenue through multiple streams, including investment income, dividends from subsidiaries, and capital gains from asset disposals. The company strategically invests in high-growth sectors, leveraging its expertise to enhance the operational efficiency and market reach of its portfolio companies. Key revenue streams include rental income from real estate holdings, sales of consumer products, and profits from technology-related ventures. Significant partnerships with industry leaders and collaboration with emerging startups also contribute to its earnings, enabling SERENDIP HOLDINGS to capitalize on market trends and expand its influence in various sectors.

SERENDIP HOLDINGS Co. Ltd. Financial Statement Overview

Summary

Strong revenue growth (¥19.79B to ¥25.12B, +26.9%) with improved profitability (net margin up to 8.3% and stronger EBIT/EBITDA margins). Balance sheet is solid but moderately levered (debt-to-equity 1.65; equity ratio 24.8%). Main weakness is cash generation: free cash flow turned negative in 2025 and cash conversion is low (operating cash flow to net income 0.14).

Income Statement

SERENDIP HOLDINGS Co. Ltd. has demonstrated a strong revenue growth trajectory, with a notable increase from ¥19.79 billion in 2024 to ¥25.12 billion in 2025, marking a 26.9% growth rate. The gross profit margin improved to 16.9%, and the net profit margin significantly increased to 8.3%, indicating enhanced profitability. EBIT and EBITDA margins also showed positive trends, reflecting efficient operational performance.

Balance Sheet

The company's balance sheet reflects a solid equity position with a debt-to-equity ratio of 1.65, which is manageable but indicates moderate leverage. The return on equity (ROE) improved significantly to 26.1%, showcasing effective utilization of shareholder funds. The equity ratio stands at 24.8%, suggesting a balanced asset structure, though there is room for improvement in reducing liabilities.

Cash Flow

Cash flow analysis reveals challenges with free cash flow, which turned negative in 2025. However, operating cash flow remains positive, albeit lower than the previous year. The operating cash flow to net income ratio is 0.14, indicating some inefficiencies in cash conversion. The company should focus on improving free cash flow generation to support long-term financial health.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	29.67B	25.12B	19.79B	15.20B	13.81B	14.46B
Gross Profit	4.90B	4.24B	3.25B	2.47B	2.13B	2.34B
EBITDA	-119.00M	4.23B	1.92B	1.69B	1.29B	1.57B
Net Income	2.29B	2.09B	518.84M	312.50M	199.98M	398.50M
Balance Sheet
Total Assets	31.07B	32.24B	20.27B	16.17B	15.68B	14.80B
Cash, Cash Equivalents and Short-Term Investments	4.89B	6.68B	4.13B	3.09B	3.62B	3.09B
Total Debt	14.14B	13.58B	7.17B	6.37B	7.08B	7.29B
Total Liabilities	22.99B	24.11B	14.12B	11.69B	11.12B	11.78B
Stockholders Equity	7.96B	8.01B	6.15B	4.48B	4.47B	2.92B
Cash Flow
Free Cash Flow	0.00	-2.10B	1.21B	186.83M	-505.62M	-899.81M
Operating Cash Flow	0.00	292.36M	2.58B	1.05B	777.18M	992.64M
Investing Cash Flow	0.00	-4.04B	-2.53B	-392.07M	-1.17B	-1.39B
Financing Cash Flow	0.00	6.01B	888.63M	-867.06M	770.80M	848.61M

SERENDIP HOLDINGS Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1033.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7318, the sentiment is Positive. The current price of 1033 is below the 20-day moving average (MA) of 1249.35, below the 50-day MA of 1131.54, and below the 200-day MA of 1080.04, indicating a bullish trend. The MACD of 120.52 indicates Negative momentum. The RSI at 82.25 is Negative, neither overbought nor oversold. The STOCH value of 90.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7318.

SERENDIP HOLDINGS Co. Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5071	80 Outperform	¥14.03B	11.80	―	3.66%	-5.11%	-13.97%
7318	79 Outperform	¥32.62B	9.07	―	―	72.32%	1424.97%
6580	73 Outperform	¥9.10B	11.00	―	0.61%	32.31%	105.04%
9252	73 Outperform	¥10.79B	13.11	―	0.67%	31.76%	-25.89%
4346	64 Neutral	¥9.82B	10.65	―	3.65%	16.07%	50.91%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

SERENDIP HOLDINGS Co. Ltd. Corporate Events

Serendip Holdings Posts Surging Nine-Month Earnings and Keeps Full-Year Outlook Intact

Serendip Holdings reported a sharp expansion in results for the nine months ended December 31, 2025, with net sales surging 128.6% year on year to ¥35.3 billion and operating profit jumping 235.8% to ¥1.64 billion. Ordinary profit climbed 270.2% to ¥1.71 billion, while profit attributable to owners of parent rose 56.1% to ¥3.89 billion, lifting basic earnings per share to ¥213.23 after reflecting a four-for-one stock split.

The company’s total assets nearly doubled to ¥59.6 billion and equity increased to ¥12.5 billion, though its equity ratio slipped to 21.0%, indicating a greater reliance on leverage alongside expansion. Serendip maintained a zero-dividend policy for the current and prior fiscal years, signaling a continued emphasis on reinvestment or balance sheet management, and it left its full-year forecast unchanged, targeting ¥50.0 billion in sales and ¥3.9 billion in profit attributable to owners of parent for the year ending March 31, 2026.

The most recent analyst rating on (JP:7318) stock is a Hold with a Yen4887.00 price target. To see the full list of analyst forecasts on SERENDIP HOLDINGS Co. Ltd. stock, see the JP:7318 Stock Forecast page.