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

• Market Cap: ¥34.11B
• Dividend Yield: N/A
• Average Volume (3M): 75.45K
• Price to Earnings (P/E): 5.7
• Beta (1Y): 1.34
• 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: 82 Outperform
• Price Target: ¥2,129.00 ▲(106.10% Upside)
• Action: Reiterated Date: 03/06/26
• Date: Action: Reiterated 03/06/26

The score is led by strong financial performance (rapid revenue and margin expansion and improved ROE) and bullish technical trend/momentum (price above all major moving averages with positive MACD). Valuation further supports the score with a low P/E, while the main offset is cash-flow weakness (negative free cash flow and low cash conversion) and moderate leverage.

Positive Factors

Revenue Growth

Sustained 26.9% top-line growth across fiscal 2024-25 signals durable demand for the firm's services and successful commercial execution. A multi-year revenue uptrend supports capacity to reinvest, scale operating leverage, and fund strategic initiatives without relying solely on financial engineering.

Margin Expansion

Improving gross and net margins indicate the business is gaining pricing power or cost efficiency, converting revenue growth into sustainable profitability. Higher EBIT/EBITDA margins imply operational improvements that should persist as processes and scale advantages become embedded.

High Return on Equity

A 26.1% ROE reflects effective use of shareholder capital and attractive returns on invested equity. Persistently high ROE can signal competitive advantages and disciplined capital allocation, supporting long-term shareholder value if profitability and asset efficiency are maintained.

Negative Factors

Negative Free Cash Flow

Negative free cash flow reduces internal funding for capex, M&A or shareholder returns and increases reliance on external financing. Over a multi-month horizon this constrains strategic flexibility and can force trade-offs between growth investments and balance sheet repair.

Weak Cash Conversion

A low OCF-to-net-income ratio (0.14) means reported profits are not translating into cash, potentially from receivables or working capital strain. Persistently poor cash conversion undermines sustainable earnings quality and increases liquidity risk despite reported net income improvements.

Moderate Leverage

A debt-to-equity ratio of 1.65 indicates meaningful leverage that can amplify stress in adverse cycles. Moderate leverage limits financial flexibility for strategic moves and raises refinancing risk; deleveraging or stronger cash generation will be needed to lower structural risk over the medium term.

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 top-line and profitability improvement (revenue up 26.9% YoY; higher gross, EBIT/EBITDA, and net margins) and a sharp ROE improvement (26.1%) support a high score. This is tempered by moderate leverage (debt-to-equity 1.65; equity ratio 24.8%) and weaker cash quality, with free cash flow turning negative and a low operating cash flow to net income ratio (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: Neutral

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 1419.40, below the 50-day MA of 1202.02, and below the 200-day MA of 1111.89, indicating a bullish trend. The MACD of 175.53 indicates Negative momentum. The RSI at 70.57 is Negative, neither overbought nor oversold. The STOCH value of 79.54 is Neutral, 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
7318	82 Outperform	¥34.11B	5.74	―	―	72.32%	1424.97%
5071	80 Outperform	¥13.90B	8.15	―	3.66%	-5.11%	-13.97%
6580	69 Neutral	¥9.50B	14.73	―	0.61%	32.31%	105.04%
9252	68 Neutral	¥11.84B	7.54	―	0.67%	31.76%	-25.89%
4346	64 Neutral	¥9.98B	35.99	―	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.