HIRAYAMA HOLDINGS Co.Ltd. (7781) AI Stock Analysis

• Market Cap: ¥13.03B
• Dividend Yield: 3.74%
• Average Volume (3M): 6.31K
• Price to Earnings (P/E): 11.3
• Beta (1Y): 0.68
• Revenue Growth: 2.96%
• EPS Growth: 14.65%
• Country: JP
• Employees: 3,096
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): N/A
• Shares Outstanding: 8,156,400
• 10 Day Avg. Volume: 9,400
• 30 Day Avg. Volume: 6,313
• PEG Ratio: 0.94
• Price to Book (P/B): 1.58
• Price to Sales (P/S): 0.22
• P/FCF Ratio: 8.55
• 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: 77 Outperform
• Price Target: ¥1,855.00 ▲(41.28% Upside)
• Action: Reiterated Date: 03/03/26
• Date: Action: Reiterated 03/03/26

The score is driven primarily by solid financial performance (healthy cash generation, prudent leverage, and strong ROE) and supportive valuation (moderate P/E and a strong dividend yield). Technicals remain bullish, but overbought signals (high RSI and Stochastics) temper the rating due to elevated near-term reversal risk.

Positive Factors

Cash generation

Efficient conversion of earnings into cash (OCF/net income 1.15; FCF/net income 1.08) supports durable funding for capex, working capital and dividends. Reliable cash conversion in a staffing model improves resilience through demand cycles and funds reinvestment without heavy external financing.

Prudent leverage and strong ROE

A low debt-to-equity ratio (0.25) with strong ROE (17.17%) and a healthy equity ratio (40.45%) indicates disciplined capital deployment and balance-sheet flexibility. This structural financial strength supports strategic investment, potential M&A, and cushions the business against economic downturns.

Stable margins and steady revenue trend

Consistent revenue trajectory and stable gross/EBITDA margins (gross margin 18.15%) point to operational efficiency in staffing and outsourcing services. Predictable margins and recurring client relationships support long-term cash flow visibility and scalable on-site service delivery.

Negative Factors

Low net profit margin

A structural net margin of 2.37% leaves limited room to absorb cost inflation or pricing pressure and constrains retained earnings for reinvestment. In a labor-intensive staffing business, low net profitability reduces the buffer for adverse cycles and limits strategic flexibility over the medium term.

Volatile free cash flow growth

Despite solid conversion ratios, volatility in free cash flow growth introduces uncertainty in capital allocation and dividend planning. For a company reliant on client demand and project timing, FCF swings can hinder consistent reinvestment and impair ability to fund opportunistic initiatives.

Modest revenue growth rate

Modest top-line expansion (roughly mid-single-digit average and only 1.58% in the latest period) limits the pace at which the company can scale overhead absorption and improve margins. In a low-margin staffing model, slow revenue growth constrains long-term margin expansion and market share gains.

HIRAYAMA HOLDINGS Co.Ltd. Business Overview & Revenue Model

Company Description

HIRAYAMA HOLDINGS Co.,Ltd. provides in-sourcing and temporary staffing services. Its services include manufacturing outsourcing, manufacturing temporary staffing, and personnel placement services; and engineer placement and entrusted development engineer services, such as dispatching its engineer staff to the engineering section of its clients. It also offers GENBA KAIZEN consulting, and human resources education services. The company was formerly known as HIRAYAMA Co., Ltd. and changed its name to HIRAYAMA HOLDINGS Co.,Ltd. in March 2017. The company was founded in 1955 and is headquartered in Tokyo, Japan.

How the Company Makes Money

HIRAYAMA HOLDINGS generates revenue through the sale of its medical devices and healthcare solutions. The company has established key revenue streams from the direct sale of its products to healthcare institutions and the provision of maintenance and support services. Additionally, HIRAYAMA may engage in partnerships with other medical technology firms to co-develop products or expand its market reach, further contributing to its earnings. The company also benefits from ongoing demand in the healthcare sector, driven by an aging population and increasing healthcare spending.

HIRAYAMA HOLDINGS Co.Ltd. Financial Statement Overview

Summary

Strong overall fundamentals supported by steady revenue growth, stable operating margins, and robust cash conversion (operating cash flow to net income of 1.15). Balance sheet leverage is prudent (debt-to-equity 0.25) with solid ROE (17.17%), though the net profit margin is relatively low (2.37%) and free cash flow growth shows some volatility.

Income Statement

HIRAYAMA HOLDINGS Co.Ltd. exhibits strong revenue growth with a consistent upward trajectory over the years, highlighted by a 1.58% growth in the latest period. The company maintains healthy profit margins, with a gross profit margin of 18.15% and a net profit margin of 2.37% for the most recent year. EBIT and EBITDA margins also show stability, indicating efficient operational management. However, the net profit margin remains relatively low, suggesting room for improvement in cost management or pricing strategies.

Balance Sheet

The balance sheet reflects a solid financial position with a manageable debt-to-equity ratio of 0.25, indicating prudent leverage use. The return on equity is robust at 17.17%, showcasing effective utilization of shareholder funds. The equity ratio of 40.45% suggests a strong capital structure, though there is potential risk if debt levels increase significantly.

Cash Flow

Cash flow analysis reveals a remarkable free cash flow growth, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.15, demonstrating efficient conversion of earnings into cash. The free cash flow to net income ratio of 1.08 further supports the company's ability to generate cash relative to its net income, although fluctuations in free cash flow growth rates suggest potential volatility.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	36.22B	35.29B	31.67B	27.98B	23.04B
Gross Profit	6.57B	5.97B	5.23B	4.80B	4.01B
EBITDA	1.39B	1.26B	1.00B	799.51M	768.63M
Net Income	858.16M	757.11M	549.13M	409.36M	413.46M
Balance Sheet
Total Assets	12.36B	12.29B	10.11B	8.71B	8.17B
Cash, Cash Equivalents and Short-Term Investments	6.06B	5.95B	4.33B	3.41B	3.88B
Total Debt	1.24B	1.67B	843.23M	217.83M	565.86M
Total Liabilities	7.35B	7.83B	6.13B	5.13B	4.98B
Stockholders Equity	5.00B	4.46B	3.99B	3.58B	3.19B
Cash Flow
Free Cash Flow	923.57M	882.91M	504.68M	63.89M	847.06M
Operating Cash Flow	989.12M	1.00B	561.34M	244.95M	893.33M
Investing Cash Flow	-95.19M	70.14M	-100.29M	-350.49M	70.67M
Financing Cash Flow	-764.69M	534.19M	472.73M	-371.24M	-393.29M

HIRAYAMA HOLDINGS Co.Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1313.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7781, the sentiment is Positive. The current price of 1313 is below the 20-day moving average (MA) of 1429.50, below the 50-day MA of 1365.63, and above the 200-day MA of 1159.54, indicating a bullish trend. The MACD of 58.61 indicates Negative momentum. The RSI at 84.92 is Negative, neither overbought nor oversold. The STOCH value of 96.15 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7781.

HIRAYAMA HOLDINGS Co.Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2410	79 Outperform	¥13.24B	12.25	―	4.18%	5.14%	17.12%
9346	79 Outperform	¥6.13B	10.36	―	2.76%	10.27%	-0.35%
7781	77 Outperform	¥13.03B	11.31	―	3.74%	2.96%	14.65%
7367	74 Outperform	¥7.14B	10.95	―	4.64%	27.01%	9.02%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
151A	63 Neutral	¥5.75B	12.02	―	―	9.09%	42.47%