Watami Co., Ltd. (7522) AI Stock Analysis

• Market Cap: ¥37.34B
• Dividend Yield: 1.07%
• Average Volume (3M): 130.66K
• Price to Earnings (P/E): 15.9
• Beta (1Y): 0.42
• Revenue Growth: 6.41%
• EPS Growth: -35.96%
• Country: JP
• Employees: 1,621
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 9.59
• Shares Outstanding: 42,684,880
• 10 Day Avg. Volume: 69,860
• 30 Day Avg. Volume: 130,660
• 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: ¥1,023.00
• Price Target Upside: 11.20% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 60 Neutral
• Price Target: ¥1,023.00 ▲(11.20% Upside)

The overall stock score of 60 reflects strong financial performance, particularly in revenue growth and profitability, but is tempered by bearish technical indicators and moderate valuation. The lack of earnings call data and corporate events further limits the score.

Watami Co., Ltd. Business Overview & Revenue Model

Company Description

Watami Co., Ltd. (7522) is a prominent Japanese company primarily engaged in the food and beverage industry, notably operating a chain of izakaya (Japanese-style pubs) and restaurants. The company also delves into the retail sector by providing food products and services for home consumption. With a focus on delivering quality dining experiences and a diverse menu that includes traditional Japanese cuisine, Watami has established a strong presence in the domestic market.

How the Company Makes Money

Watami Co., Ltd. generates revenue primarily through its restaurant operations, which include a wide range of izakaya and other dining establishments across Japan. The company capitalizes on the growing demand for dining out and socializing, attracting customers with its unique offerings and ambiance. In addition to in-restaurant sales, Watami also earns income from catering services and food product sales, including packaged goods that are marketed for home consumption. The company may also benefit from strategic partnerships with suppliers and distributors, enhancing its supply chain efficiency and product offerings. Seasonal promotions and loyalty programs further contribute to customer retention and increased sales, helping to solidify Watami's position in the competitive food service industry.

Watami Co., Ltd. Financial Statement Overview

Summary

Watami Co., Ltd. demonstrates strong revenue growth and profitability, with a notable 78.7% increase in revenue. However, concerns about leverage and cash flow stability persist, with a high debt-to-equity ratio and declining free cash flow growth.

Income Statement

Watami Co., Ltd. has demonstrated strong revenue growth, particularly in the TTM period with a remarkable 78.7% increase. The company maintains healthy gross and net profit margins, indicating efficient cost management and profitability. However, the EBIT and EBITDA margins have shown some fluctuations, suggesting potential volatility in operating efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved over time, indicating better leverage management, but it remains relatively high, posing potential financial risk. Return on equity is strong, reflecting effective use of equity to generate profits. The equity ratio is stable, suggesting a balanced asset structure.

Cash Flow

Watami's cash flow performance is mixed, with a recent decline in free cash flow growth. The operating cash flow to net income ratio is moderate, indicating reasonable cash generation from operations. However, the free cash flow to net income ratio suggests that cash generation relative to profits could be improved.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	89.41B	88.71B	82.30B	77.92B	64.36B	60.85B
Gross Profit	50.41B	50.24B	47.93B	43.61B	34.64B	31.26B
EBITDA	5.93B	7.41B	6.55B	4.27B	933.00M	-8.57B
Net Income	2.33B	3.52B	4.19B	1.67B	-1.84B	-11.56B
Balance Sheet
Total Assets	66.78B	71.49B	64.15B	57.05B	52.22B	44.89B
Cash, Cash Equivalents and Short-Term Investments	42.42B	46.13B	40.64B	35.71B	30.83B	20.40B
Total Debt	27.17B	29.08B	27.37B	24.68B	25.02B	26.60B
Total Liabilities	41.27B	44.35B	41.99B	39.24B	37.59B	41.50B
Stockholders Equity	25.17B	26.80B	21.89B	17.68B	14.47B	3.24B
Cash Flow
Free Cash Flow	5.35B	5.52B	2.55B	4.56B	-1.18B	-7.18B
Operating Cash Flow	7.06B	6.89B	4.74B	6.68B	1.02B	-4.32B
Investing Cash Flow	-5.33B	-6.56B	-3.06B	-4.99B	-15.37B	-3.41B
Financing Cash Flow	-835.00M	-13.00M	59.00M	-1.54B	10.10B	11.64B

Watami Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 920.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7522, the sentiment is Negative. The current price of 920 is below the 20-day moving average (MA) of 942.40, below the 50-day MA of 981.60, and below the 200-day MA of 1004.54, indicating a bearish trend. The MACD of -17.67 indicates Negative momentum. The RSI at 38.57 is Neutral, neither overbought nor oversold. The STOCH value of 43.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7522.

Watami Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3561	68 Neutral	¥43.82B	22.38	19.62%	1.30%	4.87%	-10.06%
3196	64 Neutral	¥45.37B	76.49	―	0.62%	14.82%	-65.01%
2705	62 Neutral	¥40.90B	34.37	―	0.18%	13.81%	-14.64%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3198	61 Neutral	¥47.29B	36.01	―	1.30%	2.90%	-26.37%
7522	60 Neutral	¥37.34B	15.86	―	1.07%	6.41%	-35.96%
8163	55 Neutral	¥49.75B	57.20	―	0.64%	14.44%	-55.16%

Watami Co., Ltd. Corporate Events

Watami Co., Ltd. Reports Q1 2025 Financial Results Amid Global Uncertainties

Watami Co., Ltd. reported its financial results for the three months ended June 30, 2025, showing a slight increase in net sales by 3.3% to ¥22,112 million. However, the company faced a significant decline in profits, with ordinary profit dropping by 69% and profit attributable to owners decreasing by 70.5%. The company has expanded its scope of consolidation by including two new companies, Watami US Franchise LLC and H&W Hospitality Partners, LLC, indicating a strategic move to broaden its international footprint. Despite the challenges, Watami is navigating uncertainties in the global economy, including geopolitical tensions and tariff policies, which have impacted its ability to forecast future earnings.

Watami Co., Ltd. Reports Financial Results of Affiliate Keniten Co., Ltd.

Watami Co., Ltd. has announced the financial results of its affiliated company, Keniten Co., Ltd., for the fiscal year ending March 31, 2025. Keniten, which underwent a name change in May 2025, reported total assets and liabilities of 36,851 million yen, with a notable voting rights ratio held by Watami at 24.41%. This financial disclosure provides insights into Watami’s strategic financial interests and its impact on the company’s asset management operations.

Watami Ensures Independence Amid Shareholder Relations

Watami Co., Ltd. has announced that Keniten Co., Ltd., an affiliated company holding 24.41% of its voting rights, ensures Watami’s operational independence without imposing any restrictions on business activities. Watami maintains a policy to conduct transactions with controlling shareholders on terms comparable to third parties, ensuring no disadvantage to minority shareholders.

Watami Co., Ltd. Announces Board of Directors Candidates

Watami Co., Ltd. has announced the candidates for its Board of Directors, with reappointments of key figures including Miki Watanabe as Representative Director, Chairman, President, and CEO. The company also introduces Toshiya Ito as a newly appointed Outside Director and member of the Audit and Supervisory Committee, indicating a strategic move to strengthen its governance structure.