Zenken Corporation (7371) AI Stock Analysis

• Market Cap: ¥8.76B
• Dividend Yield: 1.83%
• Average Volume (3M): 18.33K
• Price to Earnings (P/E): 25.2
• Beta (1Y): 0.46
• Revenue Growth: -1.60%
• EPS Growth: 40.42%
• Country: JP
• Employees: 475
• Sector: Industrials
• Sector Strength: 79
• Industry: Specialty Business Services
• EPS (TTM): 3.88
• Shares Outstanding: 12,331,100
• 10 Day Avg. Volume: 17,290
• 30 Day Avg. Volume: 18,330
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥760.00
• Price Target Upside: 7.04% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 71 Outperform
• Price Target: ¥760.00 ▲(7.04% Upside)

Zenken Corporation's overall stock score is primarily driven by its stable financial position and positive technical indicators. The company's low leverage and efficient cash management are strengths, but the declining revenue trend and high P/E ratio are concerns. The stock's positive price trend supports its current valuation, but future growth prospects may be limited without revenue improvement.

Zenken Corporation Business Overview & Revenue Model

Company Description

Zenken 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 Money

Zenken 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 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	5.59B	5.54B	5.63B	7.06B	7.71B	6.22B
Gross Profit	3.09B	3.06B	2.95B	3.65B	4.97B	3.75B
EBITDA	548.74M	650.88M	488.94M	800.37M	2.47B	1.42B
Net Income	297.11M	342.19M	243.54M	426.99M	1.58B	956.80M
Balance Sheet
Total Assets	14.55B	14.49B	14.29B	14.37B	15.29B	13.51B
Cash, Cash Equivalents and Short-Term Investments	4.39B	4.31B	3.61B	3.94B	6.07B	4.19B
Total Debt	627.41M	578.83M	554.05M	702.54M	951.02M	999.51M
Total Liabilities	2.23B	2.12B	2.05B	2.02B	3.14B	2.83B
Stockholders Equity	12.32B	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: Positive
• Last Price: 710.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 Positive. The current price of 710 is above the 20-day moving average (MA) of 681.20, above the 50-day MA of 668.75, and above the 200-day MA of 579.87, indicating a bullish trend. The MACD of 5.25 indicates Negative momentum. The RSI at 59.84 is Neutral, neither overbought nor oversold. The STOCH value of 59.67 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9780	81 Outperform	¥8.42B	9.35		2.74%	5.72%	5.77%
3551	80 Outperform	¥8.02B	6.09		3.17%	4.18%	23.01%
7371	71 Outperform	¥8.76B	25.18		1.83%	-1.60%	40.42%
7049	69 Neutral	¥7.24B	17.85		―	7.94%	364.35%
9791	66 Neutral	¥8.57B	7.72		2.46%	-7.83%	-13.14%
Sector *	64 Neutral	$10.84B	16.10	8.24%	1.99%	2.74%	-14.89%
3840	41 Neutral	¥8.59B	―		―	5.20%	-67.57%