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

• Market Cap: ¥21.85B
• Dividend Yield: N/A
• Average Volume (3M): 51.90K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.83
• Revenue Growth: -5.65%
• EPS Growth: -469.19%
• Country: JP
• Employees: 211
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): -4.56
• 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: 57 Neutral
• Price Target: ¥598.00 ▲(4.00% Upside)

The score is driven primarily by mixed financial performance: rapid revenue growth and a strong, low-debt balance sheet are offset by volatile profitability and ongoing cash burn. Technical indicators are moderately supportive, but valuation is pressured by losses (negative P/E) and no provided dividend yield.

Positive Factors

Balance sheet strength

Near-zero debt provides durable financial flexibility, lowering refinancing and interest-rate risk and enabling the firm to fund development and manufacturing needs from equity or cash. This structural strength supports operations through R&D cycles and clinical timelines over months to years.

Accelerating revenue growth

Strong sequential top-line acceleration implies growing commercial adoption of products and CDMO services, which can drive scale benefits and improve long-term unit economics. If sustained, this trend supports reinvestment in manufacturing and broader market penetration.

High gross margins

Sustained gross margins above 50% indicate durable product-level pricing power and favorable unit economics for cell-based products. This provides scope for operating leverage as revenue scales, assuming SG&A and R&D growth are controlled, improving long-term profitability potential.

Negative Factors

Weak cash generation

Recurrent negative operating and free cash flows mean the business cannot reliably self-fund growth and development, increasing reliance on external capital. Over 2–6 months this elevates dilution and financing risk and constrains investments in capacity or trials.

Profitability volatility

Swinging from modest profits to material losses signals inconsistent control of operating costs or lumpy revenues. This undermines predictability for reinvestment, budgeting and stakeholder confidence, and suggests underlying cost structure or commercialization execution issues.

Negative return on equity

A shift to negative ROE shows the firm is not currently converting equity capital into returns, reducing long-term capital efficiency. Persistent negative ROE pressures the need for strategic change or additional financing and weakens the case for equity-holders over time.

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

Strong revenue growth and a very low-debt balance sheet are key positives, but results are held back by a return to losses in FY2025 and recurring negative operating/free cash flow, indicating inconsistent profitability and cash generation.

Income Statement

Revenue growth is a clear positive, with FY2025 revenue up ~81% year-over-year after FY2024 grew ~24%. Profitability, however, is inconsistent: FY2024 was profitable (about 5.7% net margin), but FY2025 slipped back to losses (about -10.4% net margin) and negative operating profit. Gross margin remains strong (roughly 56%–67% over recent years), but operating costs continue to pressure earnings and make results volatile.

Balance Sheet

The balance sheet is a major strength: debt is effectively zero and the company is financed primarily with equity (debt-to-equity ~0). Equity is sizeable relative to assets, supporting flexibility through down cycles. The key weakness is returns: return on equity turned negative in FY2025 after a positive FY2024, reflecting the swing back to losses rather than balance sheet leverage.

Cash Flow

Cash generation is a concern. Operating cash flow and free cash flow were negative in FY2025 (and also negative in multiple prior years), indicating the business is not yet consistently self-funding. FY2024 showed positive operating cash flow and near-breakeven free cash flow, but the rebound did not hold into FY2025, raising execution and funding-risk sensitivity despite the low-debt profile.

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7774, the sentiment is Neutral. The current price of 575 is above the 20-day moving average (MA) of 544.15, above the 50-day MA of 523.34, and above the 200-day MA of 544.67, indicating a neutral trend. The MACD of 3.35 indicates Positive momentum. The RSI at 49.46 is Neutral, neither overbought nor oversold. The STOCH value of 19.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
4978	59 Neutral	¥15.07B	-54.05	―	―	1.24%	-33.41%
7774	57 Neutral	¥21.85B	-47.35	―	―	-5.65%	-469.19%
7096	56 Neutral	¥8.54B	42.69	―	―	2.99%	-52.75%
7776	52 Neutral	¥11.02B	-10.03	―	―	-42.49%	-2.37%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
4593	45 Neutral	¥46.99B	-10.33	―	―	-82.33%	47.73%
4599	43 Neutral	¥17.61B	-9.21	―	―	―	11.34%

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.