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

• Market Cap: ¥26.01B
• Dividend Yield: N/A
• Average Volume (3M): 75.45K
• Price to Earnings (P/E): 5.7
• Beta (1Y): 1.35
• 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: ¥1,740.00 ▲(68.44% 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 top-line expansion (¥19.79bn → ¥25.12bn, +26.9% YoY) signals durable demand traction and growing scale. Over a 2–6 month horizon, stronger revenue base supports pricing power, fixed-cost absorption and continued reinvestment to expand market presence and product penetration.

Margin Expansion

Improving gross and net margins reflect rising operational efficiency and better mix or pricing power. Margin expansion is a structural positive: it enhances cash generation potential per revenue unit and supports sustainable profitability even if revenue growth moderates, enabling reinvestment or deleveraging.

Improved ROE

A 26.1% ROE implies the company is effectively deploying shareholder capital to generate returns. This indicates competitive advantages or efficient operations that can persist, supporting shareholder value creation and offering resilience to fund growth without proportionally diluting equity over months ahead.

Negative Factors

Negative Free Cash Flow

Negative free cash flow is a structural concern: it limits capacity to fund capex, pay down debt, or return capital without external financing. Unless FCF reverses, the company may need to rely on borrowing or equity, increasing financing cost and reducing financial flexibility over the medium term.

Weak Cash Conversion

A 0.14 operating-cash-to-net-income ratio signals earnings quality and working-capital inefficiencies. Low cash conversion can persist if receivables or inventory cycles remain stretched, constraining liquidity and making reported profits less useful for funding operations or debt service in coming quarters.

Moderate Leverage

Debt-to-equity of 1.65 and a modest equity ratio indicate meaningful leverage on the balance sheet. With elevated liabilities, the company faces higher interest and refinancing risk, which combined with weak cash conversion could pressure margins and limit strategic flexibility over the next several 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

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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	2.48B	2.01B	1.71B	1.37B	1.14B	1.20B
Net Income	2.39B	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	5.07B	6.68B	4.13B	3.09B	3.62B	3.09B
Total Debt	13.89B	13.36B	7.17B	6.37B	7.08B	7.29B
Total Liabilities	22.98B	24.11B	14.11B	11.69B	11.12B	11.78B
Stockholders Equity	7.96B	8.01B	6.16B	4.48B	4.47B	2.92B
Cash Flow
Free Cash Flow	0.00	-2.10B	1.34B	230.22M	-473.28M	-865.06M
Operating Cash Flow	0.00	292.36M	2.68B	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: Neutral
• Last Price: 1033.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7318, the sentiment is Neutral. The current price of 1033 is below the 20-day moving average (MA) of 1646.10, below the 50-day MA of 1321.70, and below the 200-day MA of 1161.26, indicating a neutral trend. The MACD of 93.96 indicates Positive momentum. The RSI at 47.81 is Neutral, neither overbought nor oversold. The STOCH value of 6.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	¥26.01B	5.74	―	―	72.32%	1424.97%
7912	75 Outperform	¥1.37T	11.76	7.04%	1.47%	3.37%	-31.10%
7911	74 Outperform	¥1.24T	11.67	6.28%	1.07%	3.01%	6.48%
4384	71 Outperform	¥114.99B	21.77	19.59%	0.16%	18.08%	136.77%
7914	68 Neutral	¥40.80B	7.42	―	3.71%	-0.04%	93.95%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7814	52 Neutral	¥28.06B	5.57	―	1.57%	9.04%	-0.91%

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.