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Zenken Corporation (JP:7371)
:7371
Japanese Market
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Zenken Corporation (7371) AI Stock Analysis

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JP:7371

Zenken Corporation

(7371)

Rating:73Outperform
Price Target:
¥776.00
▲(12.46%Upside)
Zenken Corporation's overall stock score is driven primarily by its strong technical momentum, indicating positive market sentiment. However, the high valuation and declining revenue and profitability margins are concerns that weigh on the score. The company’s strong balance sheet and improving cash flow provide a solid foundation, but addressing revenue decline is crucial for future performance.

Zenken Corporation (7371) vs. iShares MSCI Japan ETF (EWJ)

Zenken Corporation Business Overview & Revenue Model

Company DescriptionZenken Corporation (7371) is a Japanese company engaged in various business sectors, primarily focusing on information technology and human resource services. The company provides solutions such as software development, system integration, and IT consulting. Additionally, Zenken offers recruitment services and staffing solutions, catering to various industries and helping businesses with their workforce needs.
How the Company Makes MoneyZenken Corporation generates revenue through its diverse range of services in the IT and human resources sectors. Key revenue streams include fees from software development projects, system integration services, and IT consulting engagements. In the human resource segment, the company earns income from recruitment services, temporary staffing solutions, and related consulting services. Zenken's earnings are bolstered by strategic partnerships and a strong client base across different industries, contributing to sustained business growth.

Zenken Corporation Financial Statement Overview

Summary
Zenken Corporation demonstrates strong gross margins and a solid equity base, but faces challenges with declining revenues and cash flow generation. Although leverage is low, the modest net profit margins and ROE suggest areas for profitability improvement. The company's financial stability is strong, but improving cash flow management will be crucial for future growth and sustainability.
Income Statement
68
Positive
Zenken Corporation's TTM revenue shows a decline compared to previous years, indicating a negative growth trend. Gross profit margin is strong at 54.6%, reflecting efficient cost management. However, the net profit margin is modest at 4.5%, suggesting room for improvement in overall profitability. The EBIT margin stands at 5.9%, while the EBITDA margin is 8.5%, both indicating moderate operational efficiency.
Balance Sheet
72
Positive
The company maintains a robust equity position with an equity ratio of 84.0%, indicating financial stability. The debt-to-equity ratio is low at 5.5%, suggesting limited leverage and reduced financial risk. Return on Equity (ROE) is modest at 2.1%, showing potential for enhanced shareholder returns.
Cash Flow
60
Neutral
Zenken's recent cash flow performance presents concerns, with operating and free cash flows at zero in the TTM report, indicating potential cash management challenges. The absence of operating cash flow to net income ratio and free cash flow to net income ratio further highlights potential cash generation issues.
BreakdownTTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue5.59B5.63B7.06B7.71B6.22B5.83B
Gross Profit3.09B2.95B3.65B4.97B3.75B3.58B
EBITDA548.74M488.94M800.37M2.47B1.42B790.34M
Net Income297.11M243.54M426.99M1.58B956.80M377.22M
Balance Sheet
Total Assets14.55B14.29B14.37B15.29B13.51B11.57B
Cash, Cash Equivalents and Short-Term Investments4.39B3.61B3.94B6.07B4.19B2.23B
Total Debt627.41M554.05M702.54M951.02M999.51M1.19B
Total Liabilities2.23B2.05B2.02B3.14B2.83B2.59B
Stockholders Equity12.32B12.23B12.35B12.15B10.68B8.98B
Cash Flow
Free Cash Flow0.00645.62M-550.59M2.06B1.44B520.43M
Operating Cash Flow0.00682.97M-539.12M2.08B1.51B702.64M
Investing Cash Flow0.00-522.37M-1.10B-12.08M-50.36M-450.13M
Financing Cash Flow0.00-496.96M-491.37M-186.66M496.13M-147.44M

Zenken Corporation Technical Analysis

Technical Analysis Sentiment
Positive
Last Price690.00
Price Trends
50DMA
638.63
Positive
100DMA
597.98
Positive
200DMA
564.24
Positive
Market Momentum
MACD
15.18
Positive
RSI
55.02
Neutral
STOCH
48.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7371, the sentiment is Positive. The current price of 690 is above the 20-day moving average (MA) of 676.70, above the 50-day MA of 638.63, and above the 200-day MA of 564.24, indicating a bullish trend. The MACD of 15.18 indicates Positive momentum. The RSI at 55.02 is Neutral, neither overbought nor oversold. The STOCH value of 48.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7371.

Zenken Corporation Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
¥8.91B9.82
2.65%5.29%12.73%
80
Outperform
¥7.97B5.98
3.19%4.68%55.21%
73
Outperform
¥8.44B27.93
1.90%-2.79%17.28%
70
Neutral
¥7.57B18.68
7.94%364.35%
66
Neutral
£2.71B11.994.22%3.39%2.19%-20.98%
62
Neutral
¥7.31B7.47
2.89%-9.65%-25.29%
41
Neutral
¥8.02B
-3.89%-11.80%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:7371
Zenken Corporation
677.00
98.59
17.05%
JP:3551
Dynic Corporation
937.00
232.35
32.97%
JP:3840
PATH Corporation
103.00
-30.00
-22.56%
JP:7049
SHIKIGAKU Co., Ltd.
881.00
252.00
40.06%
JP:9780
Harima B.Stem Corporation
904.00
201.91
28.76%
JP:9791
Biken Techno Corporation
969.00
82.58
9.32%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 28, 2025