Zenken Corporation (7371) AI Stock Analysis

• Market Cap: ¥8.11B
• Dividend Yield: 1.98%
• Average Volume (3M): 27.74K
• Price to Earnings (P/E): 23.4
• Beta (1Y): 0.58
• Revenue Growth: -0.42%
• EPS Growth: 39.35%
• Country: JP
• Employees: 475
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 3.73
• Shares Outstanding: 12,339,100
• 10 Day Avg. Volume: 18,620
• 30 Day Avg. Volume: 27,743
• PEG Ratio: 0.58
• Price to Book (P/B): 0.64
• Price to Sales (P/S): 1.44
• P/FCF Ratio: 15.08
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ¥742.00 ▲(12.94% Upside)

Zenken Corporation's overall stock score is driven by its stable financial position and moderate valuation. The declining revenue trend and reduced operating cash flow are concerns that may impact future growth. Technical indicators suggest a neutral market sentiment, with no significant bullish or bearish signals.

Positive Factors

Financial Stability

Zenken's low leverage and solid capital structure provide a strong foundation for financial stability, reducing risk and enhancing resilience against economic fluctuations.

Profitability Margins

Sustained profitability margins indicate operational efficiency and the ability to maintain cost control, supporting long-term financial health and competitiveness.

Cash Generation

Strong free cash flow growth reflects efficient cash management, providing the company with flexibility for investments, debt reduction, and shareholder returns.

Negative Factors

Declining Revenue Trend

A declining revenue trend poses a challenge to growth prospects, potentially impacting the company's ability to invest in new opportunities and maintain market position.

Reduced Operating Cash Flow

Decreased operating cash flow may limit the company's ability to fund operations and invest in growth initiatives, potentially affecting long-term sustainability.

Revenue Growth Challenges

Ongoing revenue growth challenges could hinder the company's ability to expand its market share and capitalize on emerging opportunities, affecting future performance.

Zenken Corporation Business Overview & Revenue Model

Company Description

Zenken Corporation provides IT, language education, and real estate services in Japan. It offers content marketing, media, overseas IT talent recruitment, and AI services; and language training services for organizations, study abroad placement, English conversation school, and Japanese language education services. The company was founded 1975 and is based in Tokyo, Japan. Zenken Corporation is a subsidiary of Zenken Holdings Co., Ltd.

How the Company Makes Money

Zenken Corporation generates revenue through the sale of its electronic components and systems to a diverse range of clients across multiple industries. The primary revenue streams include the production of semiconductors, which are critical for various electronic devices, and communication equipment that enhances connectivity for consumers and businesses alike. Additionally, the company may engage in long-term contracts with major manufacturers, providing a steady income. Strategic partnerships with tech firms and suppliers further bolster its market position, allowing for collaborative innovation and expanded market reach, which are essential in driving sales and enhancing profitability.

Zenken Corporation Financial Statement Overview

Summary

Zenken Corporation demonstrates a stable financial position with low leverage and efficient cash management. However, the declining revenue trend and reduced operating cash flow are areas that require attention. The company maintains good profitability margins, but future growth prospects may be challenged by the current revenue trajectory.

Income Statement

Zenken Corporation has experienced a decline in revenue over the past few years, with a negative revenue growth rate in the latest period. Despite this, the company maintains a reasonable gross profit margin of 55.3% and a net profit margin of 6.2% for the latest year. The EBIT and EBITDA margins have shown resilience, indicating operational efficiency. However, the declining revenue trend is a concern.

Balance Sheet

The balance sheet of Zenken Corporation is strong, with a low debt-to-equity ratio of 0.047, indicating low leverage and financial stability. The return on equity is modest at 2.8%, reflecting moderate profitability. The equity ratio is healthy, suggesting a solid capital structure. Overall, the company is financially stable with low risk from debt.

Cash Flow

Zenken Corporation has shown strong free cash flow growth, although the operating cash flow has decreased compared to previous years. The operating cash flow to net income ratio is robust, indicating good cash generation relative to net income. The free cash flow to net income ratio is also strong, suggesting efficient cash management. However, the decline in operating cash flow is a point of concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.54B	5.54B	5.63B	7.06B	7.71B	6.22B
Gross Profit	3.06B	3.06B	2.95B	3.65B	4.97B	3.75B
EBITDA	559.70M	650.88M	488.94M	800.37M	2.47B	1.42B
Net Income	341.67M	342.19M	243.54M	426.99M	1.58B	956.80M
Balance Sheet
Total Assets	14.49B	14.49B	14.29B	14.37B	15.29B	13.51B
Cash, Cash Equivalents and Short-Term Investments	4.31B	4.31B	3.61B	3.94B	6.07B	4.19B
Total Debt	578.83M	578.83M	554.05M	702.54M	951.02M	999.51M
Total Liabilities	2.12B	2.12B	2.05B	2.02B	3.14B	2.83B
Stockholders Equity	12.37B	12.37B	12.23B	12.35B	12.15B	10.68B
Cash Flow
Free Cash Flow	0.00	528.87M	645.62M	-550.59M	2.06B	1.44B
Operating Cash Flow	0.00	606.35M	682.97M	-539.12M	2.08B	1.51B
Investing Cash Flow	0.00	282.31M	-522.37M	-1.10B	-12.08M	-50.36M
Financing Cash Flow	0.00	-186.12M	-496.96M	-491.37M	-186.66M	496.13M

Zenken Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 657.00
• 50DMA: Negative
• 100DMA: Negative
• 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:7371, the sentiment is Negative. The current price of 657 is below the 20-day moving average (MA) of 664.75, below the 50-day MA of 664.88, and above the 200-day MA of 642.82, indicating a neutral trend. The MACD of -4.94 indicates Positive momentum. The RSI at 45.11 is Neutral, neither overbought nor oversold. The STOCH value of 25.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7371.

Zenken Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3551	80 Outperform	¥8.97B	5.32	―	2.83%	2.55%	44.60%
9791	74 Outperform	¥10.41B	8.36	―	2.33%	-6.09%	24.42%
9780	73 Outperform	¥8.51B	9.45	―	3.05%	7.38%	4.58%
7371	66 Neutral	¥8.11B	23.43	―	1.98%	-0.42%	39.35%
7049	65 Neutral	¥7.77B	13.51	―	―	24.34%	80.81%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
3840	41 Neutral	¥4.48B	-8.15	―	―	2.43%	-172.00%