Japan Tissue Engineering Co., Ltd. (7774) AI Stock Analysis

• Market Cap: ¥22.01B
• Dividend Yield: N/A
• Average Volume (3M): 51.90K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.84
• Revenue Growth: -5.65%
• EPS Growth: -469.19%
• Country: JP
• Employees: 211
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -3.17
• Shares Outstanding: 40,610,200
• 10 Day Avg. Volume: 45,190
• 30 Day Avg. Volume: 51,896
• PEG Ratio: 0.26
• Price to Book (P/B): 3.19
• Price to Sales (P/S): 7.56
• P/FCF Ratio: -82.67
• 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: 54 Neutral
• Price Target: ¥543.00 ▼(-5.57% Downside)

The score is driven primarily by strong top-line growth and a very conservative balance sheet, offset by inconsistent profitability and ongoing cash burn. Technicals are mildly supportive, but valuation is pressured by losses and the lack of a dividend.

Positive Factors

Very low debt balance sheet

An effectively zero-debt balance sheet gives the company lasting financial flexibility to fund R&D, navigate development timelines, and absorb setbacks without near-term refinancing pressure. This structural strength reduces solvency risk and supports long-term product development execution.

Strong recent top-line growth

Sustained double-digit and then high-single-digit to double-digit revenue growth reflects successful commercialization and market adoption of its products and services. Durable revenue expansion improves scale economics and enhances the company's ability to invest in manufacturing and R&D over the medium term.

Diversified regenerative-medicine revenue streams

Having both approved product sales and contract manufacturing/processing services creates diversified, complementary revenue lines. Product commercialization validates technology while CDMO-like services generate recurring contractual income and leverage production capabilities across multiple clients.

Negative Factors

Negative operating and free cash flow

Persistent negative operating and free cash flows mean the business is not yet self-funding, forcing reliance on equity or other financing. Over months, ongoing cash burn raises execution and dilution risk, and constrains the company's ability to invest organically without external capital.

Return to losses in FY2025

A swing from profitability to material losses reduces earnings predictability and undermines confidence in margin recovery. For a biotech/regenerative company, inconsistent profitability complicates long-term planning, capital allocation, and the path to sustained commercial returns.

Operating costs pressure margins

High gross margins are offset by elevated operating expenses; if SG&A or R&D remain high as commercialization scales, net margins may stay volatile. Structural cost pressure can limit the durability of profits even as revenue grows, prolonging the path to consistent positive cash flow.

Japan Tissue Engineering Co., Ltd. Business Overview & Revenue Model

Company Description

Japan Tissue Engineering Co., Ltd. engages in the regenerative medicine business in Japan. The company operates through Regenerative Medicine Product, Regenerative Medicine Outsourcing, and Research and Development Support segments. It offers autologous cultured epidermis, cartilage, corneal epithelium, and oral mucosal epithelium to medical institutions for the purpose of medical treatment. The company also provides tissue-engineered medical products. In addition, it researches and develops human 3-dimensional cultured tissue models for use in the development of cosmetics and drugs for external use, as well as in research that employs skin and cornea tissues. Further, the company offers regenerative medicine contract development and manufacturing services. The company was founded in 1999 and is headquartered in Gamagori, Japan. Japan Tissue Engineering Co., Ltd. is a subsidiary of Teijin Limited.

How the Company Makes Money

J-TEC generates revenue through the sale of its tissue-engineered products, which are used in medical treatments and procedures. The company's primary revenue streams come from the commercial sales of its cultured tissue products to hospitals and medical institutions. Additionally, J-TEC is involved in collaborative research and development projects with academic institutions and other corporations, which may provide additional funding and revenue opportunities. The company also invests in intellectual property development and may earn income through licensing agreements or partnerships with other entities in the regenerative medicine space.

Japan Tissue Engineering Co., Ltd. Financial Statement Overview

Summary

Japan Tissue Engineering Co., Ltd. presents a mixed financial picture. While the balance sheet is strong with no debt and high equity, profitability challenges are evident with negative net income and EBIT margins. The cash flow statement highlights potential cash management issues, transitioning from positive to zero free cash flow.

Income Statement

The company has shown erratic revenue patterns with recent declines in revenue from the annual to TTM period. Gross profit margins remain relatively high, but negative net income and EBIT margins indicate ongoing profitability challenges. Despite previous growth, the most recent TTM figures show significant financial distress.

Balance Sheet

The balance sheet reflects strong equity with no debt, which indicates financial stability and low leverage. The high equity ratio suggests the company is well-capitalized. However, the consistent negative net income impacts return on equity, which remains negative.

Cash Flow

The cash flow statement shows a lack of positive free cash flow and operating cash flow, which could concern stakeholders. The transition from positive free cash flow in the previous year to zero in the TTM period underlines potential cash management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.44B	2.46B	2.51B	2.03B	2.10B	2.26B
Gross Profit	1.48B	1.51B	1.69B	1.14B	1.26B	1.16B
EBITDA	-74.19M	-76.02M	278.56M	-597.00M	-374.00M	-338.62M
Net Income	-286.87M	-255.30M	143.17M	-729.32M	-497.89M	-466.62M
Balance Sheet
Total Assets	6.29B	6.51B	6.99B	6.88B	7.60B	8.12B
Cash, Cash Equivalents and Short-Term Investments	3.92B	3.89B	4.27B	4.13B	4.93B	5.28B
Total Debt	0.00	0.00	0.00	133.00K	936.00K	1.74M
Total Liabilities	710.70M	687.95M	908.43M	946.15M	931.66M	954.78M
Stockholders Equity	5.58B	5.83B	6.08B	5.94B	6.67B	7.16B
Cash Flow
Free Cash Flow	0.00	-224.48M	938.00K	-798.60M	-342.48M	-473.98M
Operating Cash Flow	0.00	-148.37M	274.14M	-622.60M	-225.25M	-399.59M
Investing Cash Flow	0.00	-232.53M	-242.23M	1.12B	-116.48M	125.89M
Financing Cash Flow	0.00	-3.00K	-134.00K	-803.00K	-823.00K	-1.30M

Japan Tissue Engineering Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 575.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7774, the sentiment is Positive. The current price of 575 is above the 20-day moving average (MA) of 522.10, above the 50-day MA of 498.88, and above the 200-day MA of 534.88, indicating a bullish trend. The MACD of 19.44 indicates Negative momentum. The RSI at 53.48 is Neutral, neither overbought nor oversold. The STOCH value of 28.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7774.

Japan Tissue Engineering Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7096	56 Neutral	¥8.54B	42.69	―	―	2.99%	-52.75%
7774	54 Neutral	¥22.01B	-54.84	―	―	-5.65%	-469.19%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4978	49 Neutral	¥14.12B	-50.65	―	―	1.24%	-33.41%
7776	47 Neutral	¥10.06B	-9.53	―	―	-42.49%	-2.37%
4599	43 Neutral	¥17.49B	-9.14	―	―	―	11.34%
4593	38 Underperform	¥31.52B	-6.94	―	―	-82.33%	47.73%

Japan Tissue Engineering Co., Ltd. Corporate Events

J-TEC Wins National Insurance Coverage for Expanded JACC Use in Knee Osteoarthritis

Japan Tissue Engineering announced that its autologous cultured cartilage product JACC will be newly covered by Japan’s national health insurance for an expanded indication that now includes knee osteoarthritis, effective January 1, 2026. JACC, already approved and reimbursed for traumatic cartilage defects and osteochondritis dissecans, becomes available as an insured regenerative treatment for patients whose knee osteoarthritis symptoms do not improve with conservative therapies and who have a defined minimum cartilage defect area, with reimbursement set at 1 million yen for the tissue transport set and 1.89 million yen for the cultured cartilage package. The broader insurance coverage is expected to increase patient access to advanced cartilage repair, strengthen J-TEC’s position in orthopedic regenerative medicine, and support the company’s strategy to expand its business while enhancing clinical outcomes and quality of life for an aging population with rising knee joint disorders.

Japan Tissue Engineering Reports Decline in Financial Performance Amidst External Challenges

Japan Tissue Engineering Co., Ltd. reported a decline in financial performance for the six months ending September 30, 2025, with net sales dropping by 14% compared to the previous year. Despite the challenging financial results, the company maintains a strong equity to total assets ratio of 89.4%, indicating a stable financial position. The company has not declared any dividends for the fiscal year ending March 31, 2026, and has provided a range for its earnings forecasts due to external environmental factors affecting its business.