Tay Two Co., Ltd. (7610) AI Stock Analysis

• Market Cap: ¥10.20B
• Dividend Yield: 2.7%
• Average Volume (3M): 587.63K
• Price to Earnings (P/E): 11.9
• Beta (1Y): 0.79
• Revenue Growth: 7.21%
• EPS Growth: 411.30%
• Country: JP
• Employees: 391
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 3.32
• Shares Outstanding: 68,664,340
• 10 Day Avg. Volume: 650,780
• 30 Day Avg. Volume: 587,630
• PEG Ratio: -1.52
• Price to Book (P/B): 1.26
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 16.62
• 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: 71 Outperform
• Price Target: ¥170.00 ▲(25.93% Upside)
• Action: Reiterated Date: 10/01/25
• Date: Action: Reiterated 10/01/25

Tay Two Co., Ltd. has a stable financial position with strong revenue growth and a solid balance sheet. The technical indicators suggest mixed momentum, with short-term bearish signals but long-term stability. The valuation is fair, offering a reasonable P/E ratio and dividend yield. The main areas for improvement are profitability and operational efficiency.

Positive Factors

Revenue Growth

Sustained top-line growth and a multi-year revenue uptrend provide durable support for scale advantages, supplier negotiating power and reinvestment capacity. Reliable revenue expansion strengthens long-term market position and funds product, retail and e-commerce development.

Strong Balance Sheet

A high equity ratio and modest leverage give the company financial flexibility to weather cyclical retail demand, invest in supply chain or sustainability initiatives, and pursue growth without excessive refinancing risk, supporting stability over months to years.

Improving Cash Flow

A material swing to positive free cash flow and strong operating cash conversion indicate improving cash-generative ability. This durable cash strength supports capex, working capital needs, dividends or debt reduction, enhancing financial resilience.

Negative Factors

Low Net Margin

Despite healthy gross margins (32.6%), net margin has fallen to 1.38%, implying high operating or overhead costs relative to revenue. Persistently thin net margins limit earnings retention, reduce buffer for shocks and constrain long-term free cash flow expansion.

Declining ROE

A falling ROE signals reduced efficiency in converting shareholder capital into profits. If the trend persists, it undermines long-term shareholder returns and suggests management must improve operational productivity or capital allocation to restore durable profitability.

Income-to-Cash Conversion

Weak conversion of accounting earnings into cash raises concerns about earnings quality and sustainability. Over time, poor cash conversion can constrain investment, dividend capacity and debt reduction, making reported profits less useful for funding strategy.

Tay Two Co., Ltd. Business Overview & Revenue Model

Company Description

Tay Two Co., Ltd. purchases and sells books, home video games, trading cards, hobbies, smartphones, CDs, DVDs, clothing, etc. The company was founded in 1989 and is headquartered in Okayama, Japan.

How the Company Makes Money

Tay Two Co., Ltd. generates revenue through several key streams, primarily from the sale of its textile and apparel products. The company earns income from direct sales to consumers through retail outlets and e-commerce platforms, as well as wholesale distribution to other retailers and businesses. Additionally, Tay Two Co., Ltd. may engage in collaborations and partnerships with fashion brands and designers, providing manufacturing services that further diversify its revenue sources. The company's focus on sustainability can also attract premium pricing for its eco-friendly products, contributing to higher profit margins.

Tay Two Co., Ltd. Financial Statement Overview

Summary

Tay Two Co., Ltd. shows strong revenue growth and solid financial stability, with a healthy balance sheet and improving cash flow. However, declining net profit margins and a decrease in return on equity suggest areas for improvement in profitability and efficiency.

Income Statement

Tay Two Co., Ltd. demonstrates strong revenue growth with a consistent increase over the past five years, culminating in a solid 3.64% growth from 2024 to 2025. The company's gross profit margin remains robust at 32.6% in 2025, indicating effective cost management. However, the net profit margin has seen a decline to 1.38%, reflecting a drop in profitability, which could be a concern if not addressed.

Balance Sheet

The balance sheet is strong with a healthy equity ratio of 45.9% in 2025, suggesting solid financial stability. The debt-to-equity ratio is modest at 0.61, indicating a manageable level of debt. However, the return on equity has decreased to 8.16%, which may suggest efficiency improvements are needed to enhance shareholder returns.

Cash Flow

The company shows a positive trend in free cash flow, with significant growth from a negative position in 2024 to a positive $467 million in 2025. The operating cash flow to net income ratio is strong, reflecting efficient cash generation from operations. However, the free cash flow to net income ratio indicates room for improvement in translating income into cash.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	36.74B	36.48B	35.20B	31.26B	26.85B	24.95B
Gross Profit	12.46B	11.89B	11.84B	10.74B	9.04B	7.74B
EBITDA	1.28B	1.21B	1.51B	1.87B	1.45B	1.09B
Net Income	529.38M	501.58M	568.47M	1.00B	1.50B	703.82M
Balance Sheet
Total Assets	13.88B	13.38B	12.41B	10.94B	9.37B	8.24B
Cash, Cash Equivalents and Short-Term Investments	2.23B	2.90B	2.86B	2.48B	1.76B	2.04B
Total Debt	4.53B	3.73B	3.50B	2.30B	1.87B	1.89B
Total Liabilities	7.88B	7.23B	6.60B	5.34B	4.47B	4.67B
Stockholders Equity	5.99B	6.15B	5.81B	5.60B	4.89B	3.58B
Cash Flow
Free Cash Flow	0.00	467.55M	-343.88M	645.26M	-45.77M	1.00B
Operating Cash Flow	0.00	1.46B	210.61M	1.18B	538.07M	1.22B
Investing Cash Flow	0.00	-1.44B	-595.40M	-562.30M	-645.76M	-440.12M
Financing Cash Flow	0.00	15.51M	778.62M	110.78M	-197.38M	-223.84M

Tay Two Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 135.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7610, the sentiment is Positive. The current price of 135 is below the 20-day moving average (MA) of 144.72, below the 50-day MA of 144.85, and below the 200-day MA of 140.98, indicating a bullish trend. The MACD of 2.45 indicates Negative momentum. The RSI at 61.41 is Neutral, neither overbought nor oversold. The STOCH value of 81.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7610.

Tay Two Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7110	78 Outperform	¥15.43B	18.48	―	2.22%	26.29%	28.62%
7610	71 Outperform	¥10.20B	11.95	―	2.70%	7.21%	411.30%
2652	66 Neutral	¥12.52B	8.87	―	0.30%	5.03%	-17.66%
7636	65 Neutral	¥11.54B	12.13	―	3.67%	-2.43%	14.17%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
8289	53 Neutral	¥10.50B	-4.63	―	4.61%	3.14%	-183.07%
2769	45 Neutral	¥7.61B	-2.21	―	―	-4.54%	-261.55%