Zensho Holdings Co (7550) AI Stock Analysis

• Market Cap: ¥1.55T
• Dividend Yield: 0.78%
• Average Volume (3M): 475.44K
• Price to Earnings (P/E): 28.7
• Beta (1Y): 0.94
• Revenue Growth: 11.29%
• EPS Growth: -4.88%
• Country: JP
• Employees: 16,806
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 72.42
• Shares Outstanding: 160,733,230
• 10 Day Avg. Volume: 593,820
• 30 Day Avg. Volume: 475,443
• PEG Ratio: 1.39
• Price to Book (P/B): 5.25
• Price to Sales (P/S): 1.11
• P/FCF Ratio: 72.35
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 277.46
• Revenue Forecast (FY): ¥1.24T

• Rating: 59 Neutral
• Price Target: ¥10,222.00 ▲(14.71% Upside)
• Action: Downgraded Date: 11/18/25
• Date: Action: Downgraded 11/18/25

Zensho Holdings Co's strong financial performance is a significant positive factor, showcasing robust revenue and profit growth. However, the technical analysis indicates bearish momentum, and the high P/E ratio suggests potential overvaluation, which negatively impacts the overall score.

Positive Factors

Sustained revenue and margin improvement

Consistent top-line growth with improving gross and net margins indicates the business is scaling while controlling costs. Over 2-6 months this supports durable profitability, greater reinvestment capacity, and resilience across restaurant formats, strengthening long-term cash generation.

Improving free cash flow generation

Rising free cash flow and strong conversion of accounting income to cash enhance the firm’s ability to fund capex, franchise support, and debt servicing without external financing. This sustainable cash profile underpins strategic flexibility and long-term value creation.

Moderate leverage and improving ROE

A balanced capital structure with moderate leverage paired with rising ROE signals efficient use of shareholder capital. This combination supports disciplined growth and provides financial flexibility to pursue expansion or weather sector cyclicality over multiple months.

Negative Factors

Negative EPS growth

Declining EPS despite revenue gains suggests per-share profitability pressures, potentially from higher operating costs, dilution, or non-recurring items. Persisting EPS contraction could limit shareholder returns and weaken confidence in earnings quality over the medium term.

Room to improve equity ratio / liabilities

Although leverage is moderate, a suboptimal equity ratio and remaining liabilities reduce financial headroom. This constraints strategic moves and increases sensitivity to adverse shocks, potentially forcing more expensive financing or slower expansion if not addressed.

Concentration in restaurant sales channels

Heavy reliance on restaurant and direct-to-consumer channels keeps revenue exposed to changing consumer habits, labor cost pressures, and economic cycles. Limited diversification increases vulnerability to structural shifts in dining behavior over the medium term.

Zensho Holdings Co Business Overview & Revenue Model

Company Description

Zensho Holdings Co., Ltd. manages food service chain restaurants in Japan and internationally. The company also develops sales systems and food processing systems. Its restaurants offer gyudon, udon, and hamburger steaks, as well as provides conveyor-belt sushi restaurant and coffee shop, and dining services under the Sukiya, Nakau, Coco's, Big Boy, Victoria Station, Jolly Pasta, EL Torito, Hamazushi, Hanaya Yohei, Washoku Yohei, Gyuan, Ichiban, Takarjima, Denmaru, Kyubeiya, Seto Udon, Tamon'an, Moriva Coffee, and Café Milano brands in Japan. The company also serves customers under Sukiya brand name in China, Brazil, Thailand, Malaysia, Mexico, Taiwan, and Indonesia, as well as under the Chicken Rice Shop. In addition, it operates supermarket chains; and offers residential and nursing care services for the elderly. As of June 30, 2020, it operated 9,856 stores, which include 4,316 franchised restaurants. The company was formerly known as Zensho Co., Ltd. and changed its name to Zensho Holdings Co., Ltd. in October 2011. Zensho Holdings Co., Ltd. was founded in 1982 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Zensho Holdings generates revenue primarily through its extensive restaurant operations, with the Sukiya chain being a major contributor to its income. The company makes money by selling meals and beverages directly to consumers in its restaurants. Additionally, Zensho has revenue streams from its food processing division, which produces and sells various food products to both retail and wholesale markets. The company also engages in strategic partnerships and collaborations that enhance its product offerings and market reach. Factors such as effective cost management, menu diversification, and the ability to adapt to consumer trends further bolster its earnings.

Zensho Holdings Co Financial Statement Overview

Summary

Zensho Holdings Co demonstrates impressive financial performance characterized by strong revenue and profit growth, efficient operations, and solid cash flow management. While leverage is maintained at a reasonable level, further improvement in equity ratios could enhance financial stability.

Income Statement

Zensho Holdings Co has shown strong revenue growth, with a significant increase from the previous year and consistent upward trajectory over multiple years. The gross profit margin is healthy, indicating the company effectively manages costs relative to revenue. The net profit margin has improved, demonstrating enhanced profitability. Both EBIT and EBITDA margins have shown positive trends, suggesting robust operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is moderate, reflecting a balanced approach to leverage. Return on equity (ROE) has improved, indicating effective use of shareholders' capital to generate profits. The equity ratio suggests a stable financial structure with a reasonable proportion of assets funded by equity, though there is room for improvement in reducing liabilities.

Cash Flow

There has been a noticeable improvement in free cash flow growth, illustrating enhanced cash generation capabilities. The operating cash flow to net income ratio is strong, indicating effective conversion of accounting profits to cash. The free cash flow to net income ratio supports this view, highlighting solid cash flow management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	1.16T	1.14T	965.78B	779.96B	658.50B	595.05B
Gross Profit	631.56B	622.21B	524.05B	414.87B	347.62B	340.58B
EBITDA	114.39B	117.20B	87.53B	58.36B	58.84B	34.63B
Net Income	36.51B	39.29B	30.69B	13.27B	13.87B	2.26B
Balance Sheet
Total Assets	808.23B	813.11B	748.06B	469.56B	427.17B	396.02B
Cash, Cash Equivalents and Short-Term Investments	84.02B	91.73B	102.08B	64.69B	42.41B	37.64B
Total Debt	306.52B	365.70B	339.99B	252.88B	230.06B	228.37B
Total Liabilities	572.03B	572.73B	533.41B	353.73B	322.69B	310.59B
Stockholders Equity	235.71B	240.06B	214.38B	115.63B	103.32B	85.32B
Cash Flow
Free Cash Flow	0.00	17.43B	43.89B	20.58B	16.65B	8.27B
Operating Cash Flow	0.00	78.95B	85.98B	53.08B	45.43B	29.69B
Investing Cash Flow	0.00	-66.50B	-125.39B	-35.20B	-31.55B	-23.52B
Financing Cash Flow	0.00	-16.23B	54.63B	1.84B	-11.99B	1.75B

Zensho Holdings Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8911.00
• 50DMA: Positive
• 100DMA: Positive
• 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:7550, the sentiment is Positive. The current price of 8911 is below the 20-day moving average (MA) of 9615.00, below the 50-day MA of 9068.76, and below the 200-day MA of 8969.93, indicating a bullish trend. The MACD of 256.69 indicates Positive momentum. The RSI at 62.57 is Neutral, neither overbought nor oversold. The STOCH value of 35.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7550.

Zensho Holdings Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2702	74 Outperform	¥1.03T	30.71	13.08%	0.76%	2.73%	18.30%
8153	70 Outperform	¥129.97B	20.09	―	0.70%	5.15%	47.13%
3197	63 Neutral	¥796.71B	63.08	9.53%	0.55%	15.58%	60.90%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7550	59 Neutral	¥1.55T	28.68	15.82%	0.78%	11.29%	-4.88%
3397	53 Neutral	¥362.41B	34.66	―	0.24%	9.19%	43.90%
9861	53 Neutral	¥198.72B	72.52	―	0.69%	10.75%	-14.28%

Zensho Holdings Co Corporate Events

Zensho Holdings Lifts Sales and Strengthens Equity, Keeps Full-Year Outlook Intact

Zensho Holdings reported consolidated net sales of ¥936.7 billion for the nine months ended December 31, 2025, up 10.6% year on year, with operating profit rising 4.9% to ¥60.9 billion and profit attributable to owners of parent edging up 4.1% to ¥35.5 billion. The balance sheet strengthened notably, as total assets reached ¥943.6 billion and the shareholders’ equity ratio improved to 34.4%, while the company kept its full-year forecast unchanged, targeting ¥1.2235 trillion in net sales, an 8.2% increase in full-year profit, and an annual dividend of ¥70 per share, signaling confidence in earnings stability and continued shareholder returns.

Zensho’s net assets climbed to ¥325.4 billion and net assets per share increased to ¥1,569.04, reflecting accumulation of retained earnings and an enhanced capital base. With no changes in accounting policies, no adjustments to earnings guidance, and a steady dividend outlook, the results underscore the group’s relatively resilient operating performance in a still-challenging operating environment, supporting its position as a major player in the Japanese food service sector and providing visibility for investors on income and capital structure.

The most recent analyst rating on (JP:7550) stock is a Hold with a Yen9126.00 price target. To see the full list of analyst forecasts on Zensho Holdings Co stock, see the JP:7550 Stock Forecast page.