Carchs Holdings Co., Ltd. (7602) AI Stock Analysis

• Market Cap: ¥4.68B
• Dividend Yield: 1.08%
• Average Volume (3M): 15.52K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.21
• Revenue Growth: -2.36%
• EPS Growth: -1738.42%
• Country: JP
• Employees: 211
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): -4.18
• Shares Outstanding: 24,106,009
• 10 Day Avg. Volume: 13,110
• 30 Day Avg. Volume: 15,516
• PEG Ratio: 0.05
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.16
• P/FCF Ratio: -3.56
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: ¥237.00 ▲(28.11% Upside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is held back primarily by weak financial performance—persistent losses and negative operating/free cash flow—despite some balance-sheet support from equity. Technicals are mixed with longer-term averages supportive but near-term trend and momentum weak. Valuation is difficult to support with a negative P/E, and the dividend yield is modest.

Positive Factors

Balance-sheet equity strength

A high equity ratio provides structural balance-sheet stability that cushions operating volatility and gives the firm capacity to absorb losses or support dealer operations. This supports continued access to capital and operational continuity over the next several months even with earnings pressure.

Multiple dealership revenue streams

Revenue from new/used vehicle sales, after-sales services, and ancillary F&I streams creates diversified cash inflows. Recurring after-sales and parts revenue tends to be more stable than vehicle sales and supports gross-margin resilience and customer lifetime value over the medium term.

Dealership/after-sales operating model

A dealership network and ownership of service workshops enable direct customer relationships, repeat-service revenue and cross-selling. Those structural advantages support steady aftermarket margins and customer retention, which can underpin recovery when new-vehicle volumes normalize.

Negative Factors

Negative operating & free cash flow

Sustained negative operating and free cash flow weakens the firm's ability to fund operations, invest in service capacity, or support dealers without external financing. Over 2–6 months this impairs strategic flexibility and raises refinancing and liquidity pressure if not reversed.

Persistent losses and margin pressure

Ongoing negative EBIT and shrinking gross margins indicate structural cost or pricing issues in core retail operations. Persistent losses erode retained earnings and make it harder to invest in digital, inventory or service improvements needed to regain competitive margins over the medium term.

Rising leverage, declining cash buffers

Increasing leverage combined with falling cash and short-term investments reduces financial flexibility and heightens solvency risk if macro or demand conditions deteriorate. This constrains the firm's ability to pursue growth or withstand prolonged weak operations in coming months.

Carchs Holdings Co., Ltd. Business Overview & Revenue Model

Company Description

Ledax Co., Ltd. engages in the management of its subsidiaries which are involved in the automobile business. Its services include purchase, sale, and distribution of cars. The company was founded on December 10, 1987 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Carchs Holdings generates revenue through multiple streams. The primary revenue model is based on transaction fees collected from buyers and sellers using its online platforms. Additionally, the company earns money through value-added services such as vehicle inspections and certifications, which help build trust and transparency in transactions. Financing solutions offered in partnership with financial institutions further contribute to its revenue. Significant partnerships with automotive dealerships and financial service providers enhance Carchs' market reach and provide additional income opportunities. The growing trend of digitalization in the automotive sector also supports the company's revenue growth as more consumers turn to online platforms for vehicle transactions.

Carchs Holdings Co., Ltd. Financial Statement Overview

Summary

Weak fundamentals: the company is reporting negative EBIT and net income, alongside negative operating and free cash flow. The balance sheet provides some stability via a strong equity position, but rising leverage and declining cash add risk while profitability remains pressured.

Income Statement

Carchs Holdings Co., Ltd. has faced declining profitability with negative EBIT and net income in the latest period. Revenue growth was modest, but gross profit margins have decreased over the years, indicating cost structure challenges. Persistent net losses suggest financial instability.

Balance Sheet

The company's balance sheet shows a strong equity position with a high equity ratio, reflecting some stability. However, the high debt-to-equity ratio in recent years points to increased leverage, which could pose risks if profitability does not improve. The declining trend in cash and short-term investments is also concerning.

Cash Flow

Carchs Holdings has experienced deteriorating cash flows, with negative operating and free cash flow in the latest period. The negative free cash flow growth rate and poor cash conversion metrics highlight liquidity concerns, potentially impacting future operations and investments.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	19.59B	20.03B	19.07B	19.06B	18.38B	16.03B
Gross Profit	2.85B	2.90B	3.15B	2.69B	3.36B	3.50B
EBITDA	-204.09M	-1.49M	243.28M	-373.04M	-157.84M	330.50M
Net Income	-301.69M	-187.40M	73.10M	-514.87M	-293.30M	157.63M
Balance Sheet
Total Assets	6.79B	7.07B	7.26B	6.73B	7.63B	7.65B
Cash, Cash Equivalents and Short-Term Investments	1.43B	1.66B	2.32B	1.73B	2.20B	2.83B
Total Debt	651.01M	658.53M	401.38M	629.86M	655.78M	86.05M
Total Liabilities	2.11B	2.21B	2.22B	1.82B	2.18B	1.88B
Stockholders Equity	4.43B	4.61B	4.81B	4.73B	5.28B	5.61B
Cash Flow
Free Cash Flow	0.00	-873.13M	781.69M	-411.34M	-1.27B	-482.43M
Operating Cash Flow	0.00	-861.24M	875.09M	-311.25M	-1.05B	-319.63M
Investing Cash Flow	0.00	16.78M	-67.93M	499.87M	-99.63M	-181.97M
Financing Cash Flow	0.00	91.08M	-228.62M	-59.67M	515.01M	-112.06M

Carchs Holdings Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 185.00
• 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:7602, the sentiment is Neutral. The current price of 185 is below the 20-day moving average (MA) of 246.45, below the 50-day MA of 220.94, and above the 200-day MA of 155.25, indicating a neutral trend. The MACD of -1.82 indicates Positive momentum. The RSI at 46.72 is Neutral, neither overbought nor oversold. The STOCH value of 58.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7602.

Carchs Holdings Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3011	73 Outperform	¥2.49B	10.68	―	3.25%	8.21%	9.93%
7134	71 Outperform	¥8.19B	10.47	―	2.82%	6.55%	1.07%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
2788	59 Neutral	¥4.96B	5.88	―	4.45%	-2.69%	-48.36%
3377	58 Neutral	¥5.74B	18.09	―	2.74%	9.13%	87.04%
7602	48 Neutral	¥4.68B	-17.44	―	1.08%	-2.36%	-1738.42%