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

• Market Cap: ¥6.97B
• Dividend Yield: 1.08%
• Average Volume (3M): 15.52K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.26
• Revenue Growth: -2.36%
• EPS Growth: -1738.42%
• Country: JP
• Employees: 211
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 4.09
• 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: 55 Neutral
• Price Target: ¥345.00 ▲(86.49% Upside)

The score is held back primarily by weak financial performance (loss-making operations and negative operating/free cash flow), partially offset by strong technical momentum (price well above key moving averages with positive MACD). Valuation remains mixed due to a negative P/E and a low dividend yield.

Positive Factors

Diversified dealership revenue streams

Carchs derives revenue from new/used vehicle sales, after-sales services, and F&I commissions. These multiple streams create structural resilience: after-sales and F&I tend to be recurring and higher-margin, smoothing revenue and supporting cash generation over economic cycles.

High equity ratio provides balance-sheet buffer

A high equity ratio gives Carchs an enduring solvency buffer versus peers, lowering immediate bankruptcy risk and improving access to credit. This stability supports long-term dealer operations that require inventory financing and periodic capex for service facilities.

Holding structure enables centralized oversight

As a holding company with dealership subsidiaries, Carchs can centrally allocate capital, standardize processes, and cross-sell services. This structural setup can deliver operational synergies, margin improvement opportunities, and strategic flexibility over the medium term.

Negative Factors

Persistent negative profitability

Sustained negative EBIT and net income indicate structural margin pressure or cost issues. Persistent losses erode equity, constrain reinvestment in showrooms and service capability, and undermine long-term competitiveness unless operational fixes or margin recovery occur.

Deteriorating operating and free cash flow

Negative operating and free cash flow over recent periods signals weak cash-generation from core dealership operations. This reduces ability to fund inventory and facility investments internally, increases reliance on external financing, and heightens liquidity risk under stress.

Rising leverage and declining cash reserves

An increasing debt burden combined with falling cash balances reduces financial flexibility and raises interest service risk. For capital-intensive dealership operations that need inventory and working capital, elevated leverage amplifies vulnerability if revenue or margins fail to recover.

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 overall: profitability has deteriorated with negative EBIT and net income, and cash flows are pressured with negative operating and free cash flow. The balance sheet shows some stability from a high equity ratio, but rising leverage and declining cash levels add risk.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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: Positive
• Last Price: 185.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7602, the sentiment is Positive. The current price of 185 is below the 20-day moving average (MA) of 208.05, above the 50-day MA of 171.56, and above the 200-day MA of 143.00, indicating a bullish trend. The MACD of 41.82 indicates Negative momentum. The RSI at 79.09 is Negative, neither overbought nor oversold. The STOCH value of 78.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	¥2.51B	9.67	―	3.25%	8.21%	9.93%
7134	71 Outperform	¥8.78B	12.31	―	2.82%	6.55%	1.07%
2788	66 Neutral	¥4.85B	8.64	―	4.45%	-2.69%	-48.36%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3377	58 Neutral	¥5.61B	17.40	―	2.74%	9.13%	87.04%
7602	55 Neutral	¥6.97B	-31.08	―	1.08%	-2.36%	-1738.42%