KAPPA.CREATE CO.LTD. (7421) AI Stock Analysis

• Market Cap: ¥77.76B
• Dividend Yield: 0.31%
• Average Volume (3M): 92.25K
• Price to Earnings (P/E): 64.2
• Beta (1Y): 0.38
• Revenue Growth: 1.53%
• EPS Growth: -15.91%
• Country: JP
• Employees: 784
• Sector: Consumer Cyclical
• Sector Strength: 73
• Industry: Restaurants
• EPS (TTM): 6.71
• Shares Outstanding: 49,414,577
• 10 Day Avg. Volume: 121,760
• 30 Day Avg. Volume: 92,250
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥1,647.00
• Price Target Upside: 4.51% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 66 Neutral
• Price Target: ¥1,647.00 ▲(4.51% Upside)

The overall stock score is primarily influenced by strong technical analysis indicators, suggesting bullish momentum and a positive price trend. Financial performance is solid, with consistent revenue growth and stable debt management, although some volatility in profitability metrics exists. The high P/E ratio and low dividend yield weigh down the valuation score, indicating potential overvaluation concerns.

KAPPA.CREATE CO.LTD. Business Overview & Revenue Model

Company Description

KAPPA.CREATE CO.LTD. (7421) is a dynamic company operating primarily in the creative industries, focusing on innovative design solutions and digital content creation. The company specializes in a diverse range of sectors, including graphic design, branding, and digital marketing, offering services that cater to both corporate and individual clients. KAPPA.CREATE is recognized for its commitment to quality and creativity, providing tailored solutions that enhance brand visibility and engagement in an increasingly digital marketplace.

How the Company Makes Money

KAPPA.CREATE CO.LTD. generates revenue through multiple streams. The primary revenue model is based on service fees charged for design and marketing services, which include project-based work, retainers, and consultancy fees. Additionally, the company may earn income from licensing digital content and selling proprietary design tools or software. Key partnerships with businesses and organizations in need of branding and marketing support enhance its revenue potential, while collaborations with digital platforms can also contribute to earnings through affiliate marketing or promotional campaigns.

KAPPA.CREATE CO.LTD. Financial Statement Overview

Summary

KAPPA.CREATE CO.LTD. demonstrates solid financial performance with consistent revenue growth and strong cash flow generation. The balance sheet is stable, but profitability metrics and returns to equity holders need improvement to sustain growth.

Income Statement

KAPPA.CREATE CO.LTD. has shown a consistent growth trajectory in revenue, with a notable increase of 2.8% from the previous year. The gross profit margin remains strong at 52.3%, indicating efficient cost management. However, the net profit margin has slightly declined to 1.4%, reflecting some pressure on bottom-line profitability. The EBIT and EBITDA margins of 2.0% and 5.0% respectively show moderate operational efficiency but suggest room for improvement in core operations.

Balance Sheet

The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.67, showcasing prudent financial leverage. The equity ratio stands at 34.9%, reflecting a stable financial structure. Return on equity has declined to 9.5%, which could be a concern if the trend continues. Overall, the balance sheet indicates a stable financial condition but with a need to enhance returns to equity holders.

Cash Flow

Cash flow performance is strong, with free cash flow growing by 103.7%. The operating cash flow to net income ratio of 3.72 demonstrates robust cash conversion efficiency. However, the free cash flow to net income ratio of 2.11 suggests potential room for improvement in cash management strategies. Overall, the cash flow statement reflects solid cash generation capabilities.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	73.21B	72.20B	70.44B	67.21B	64.88B
Gross Profit	38.26B	37.53B	35.72B	33.52B	33.39B
EBITDA	3.63B	3.98B	-550.00M	2.96B	623.00M
Net Income	1.03B	1.40B	-3.04B	736.00M	-1.15B
Balance Sheet
Total Assets	31.07B	30.19B	28.94B	31.65B	32.01B
Cash, Cash Equivalents and Short-Term Investments	7.94B	7.94B	7.52B	9.41B	7.92B
Total Debt	7.25B	7.46B	6.74B	8.80B	9.01B
Total Liabilities	20.18B	20.08B	20.24B	19.92B	21.04B
Stockholders Equity	10.85B	10.03B	8.63B	11.63B	10.93B
Cash Flow
Free Cash Flow	2.18B	3.50B	2.50B	2.46B	-597.00M
Operating Cash Flow	3.84B	3.55B	2.52B	2.58B	-538.00M
Investing Cash Flow	-1.94B	-2.49B	-1.15B	306.00M	-604.00M
Financing Cash Flow	-1.91B	-644.00M	-3.27B	-1.40B	3.13B

KAPPA.CREATE CO.LTD. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1576.00
• 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:7421, the sentiment is Positive. The current price of 1576 is above the 20-day moving average (MA) of 1541.60, above the 50-day MA of 1511.56, and above the 200-day MA of 1506.57, indicating a bullish trend. The MACD of 23.10 indicates Negative momentum. The RSI at 62.22 is Neutral, neither overbought nor oversold. The STOCH value of 61.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7421.

KAPPA.CREATE CO.LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8160	71 Outperform	¥69.31B	19.26		0.88%	0.63%	1053.55%
2695	71 Outperform	¥150.69B	122.49		0.53%	4.82%	-79.12%
8153	70 Outperform	¥123.03B	34.71		0.75%	4.32%	29.02%
7421	66 Neutral	¥77.76B	64.22		0.31%	1.53%	-15.91%
Sector *	61 Neutral	$17.23B	11.99	-5.97%	3.09%	1.49%	-16.00%
9828	60 Neutral	¥60.92B	12.69		2.03%	8.33%	24.64%
9887	59 Neutral	¥132.82B	48.92		0.34%	21.94%	-7.70%

KAPPA.CREATE CO.LTD. Corporate Events

KAPPA.CREATE Announces Disposal of Treasury Shares for Director Incentives

KAPPA.CREATE CO., LTD. has announced a resolution to dispose of 4,000 treasury shares as part of a remuneration system designed to incentivize directors and align their interests with shareholders. This move aims to secure talented management, improve corporate value sustainably, and ensure value sharing with stakeholders, potentially impacting the company’s operational dynamics and market positioning.

KAPPA-CREATE CO., LTD. Clarifies Parent Company Relationships and Independence Measures

KAPPA-CREATE CO., LTD. has disclosed its relationship with its parent companies, SPCKAPPA CO., LTD. and COLOWIDE Co., Ltd., highlighting COLOWIDE’s significant influence due to its 100% ownership of SPCKAPPA. The company maintains a degree of independence within the COLOWIDE Group and ensures fairness in transactions with controlling shareholders by involving a special committee to protect minority shareholders’ interests.

KAPPA-CREATE Announces Executive Personnel Changes

KAPPA-CREATE CO., LTD. has announced executive personnel changes, with the Board of Directors tentatively deciding on new appointments and reappointments, subject to shareholder approval. These changes, including the appointment of Fumio Fukutani as Director and General Manager of the Corporate Strategy Division, are expected to impact the company’s strategic direction and governance.