Transaction Co., Ltd. (7818) AI Stock Analysis

• Market Cap: ¥72.34B
• Dividend Yield: 2.57%
• Average Volume (3M): 182.34K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.22
• Revenue Growth: 10.64%
• EPS Growth: -7.53%
• Country: JP
• Employees: 481
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Household & Personal Products
• EPS (TTM): 21.65
• Shares Outstanding: 57,550,800
• 10 Day Avg. Volume: 207,660
• 30 Day Avg. Volume: 182,340
• PEG Ratio: 1.81
• Price to Book (P/B): 3.59
• Price to Sales (P/S): 2.57
• P/FCF Ratio: 17.88
• 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): 72.6
• Revenue Forecast (FY): ¥29.80B

• Rating: 80 Outperform
• Price Target: ¥1,454.00 ▲(32.42% Upside)
• Action: Reiterated Date: 01/04/26
• Date: Action: Reiterated 01/04/26

The score is driven primarily by strong fundamentals—improving margins, strong ROE, and extremely low leverage—partially offset by uneven cash-flow history. Technicals are mildly positive but not yet supported by longer-term trends, while valuation is fair with a modest dividend yield.

Positive Factors

Improving Profitability

Operating profitability has meaningfully improved to an EBIT margin near 22% by 2025, supported by stable gross margins (~39%) and solid net margins (~15%). This sustained margin improvement reflects durable operational leverage and pricing/execution strength that should support cash generation and returns over the next several quarters.

Conservative Balance Sheet

The balance sheet shows extremely low leverage and steadily rising equity, giving the company substantial financial flexibility and low refinancing risk. With minimal debt the firm can fund growth, buybacks, or weather downturns without material funding stress, a durable advantage for operations and strategic optionality.

Revenue Growth Acceleration

Top-line expansion has re-accelerated in 2023–2025, indicating sustained market demand and execution across the company's EC and digital-marketing services. Consistent revenue momentum provides a base for continued margin expansion and reinvestment, supporting medium-term cash flow and franchise value.

Negative Factors

Cash-Flow Volatility

Despite strong profitability, operating and free cash flow have been uneven, with a sharp 2022 OCF drop and a material 2024 FCF decline before a 2025 rebound. This inconsistency reduces predictability for capex, dividends or M&A and suggests sensitivity to working-capital timing or client payment patterns that can stress near-term liquidity planning.

Historic Growth Volatility

Prior revenue swings, including a decline in 2021 and tepid growth in 2024, highlight cyclical or execution risks in the advertising and EC services mix. Such uneven top-line performance can weaken forecast visibility, make capacity planning harder, and increase exposure to ad-spend cyclicality across the medium term.

Operational Sensitivity of Returns

High ROE without leverage indicates returns stem almost entirely from operations. That magnifies exposure to margin compression or demand shocks: without debt-funded smoothing or financial buffers, sustained operational setbacks would directly pressure ROE and cash generation, reducing downside protection over coming quarters.

Transaction Co., Ltd. Business Overview & Revenue Model

Company Description

TRANSACTION CO.,Ltd. plans, designs, manufactures, and sells consumer products in Japan and internationally. The company offers event products, such as T-shirts, towels, and penlights; animation or game goods; sales promotion goods; notebooks; bags and tumbler bottles, and stationery or leather accessory, as well as health care and beauty miscellaneous goods products, such as masks and mirror pouches under the MARKLESS STYLE brand; eco bags under the Motteru brand name; belt stopping bags under the gowell brand; and petware and goods under the Calulu brand name. It also provides wet tissues, cooling sheets, personal humidifiers and desk fans, corporate novelty and souvenir products, and electronic and heating-type cigarettes. The company was founded in 1987 and is based in Tokyo, Japan.

How the Company Makes Money

Transaction Co., Ltd. generates revenue through the sale of its novelty and promotional products to corporate clients and retailers. The company's business model revolves around designing innovative merchandise that meets the specific marketing and promotional needs of its clients. Key revenue streams include direct sales of customized goods, collaborations with corporate clients for exclusive promotional campaigns, and partnerships with retailers for the distribution of branded merchandise. Additionally, Transaction Co., Ltd. may engage in licensing agreements and joint ventures to expand its product offerings and market reach, thereby enhancing its revenue potential.

Transaction Co., Ltd. Financial Statement Overview

Summary

Strong and improving profitability (EBIT margin rising to ~22% by 2025) and a very conservative balance sheet with minimal leverage support a high score. The main offset is cash-flow volatility (notably the 2022 drop and 2024 free-cash-flow decline) despite a strong 2025 rebound.

Income Statement

Revenue has expanded strongly over the past several years, with growth accelerating in 2023–2025, indicating healthy demand and good execution. Profitability is a clear strength: gross margin has been consistently stable around ~39%, while operating profitability has improved meaningfully (EBIT margin rising from ~14% in 2020 to ~22% in 2025). Net margin is also solid (~15% in 2024–2025), supporting strong earnings quality. The main weakness is growth volatility earlier in the period (including a revenue decline in 2021) and only modest growth in 2024 before re-accelerating.

Balance Sheet

The balance sheet appears very conservative, with extremely low leverage and steadily rising equity over time. Debt relative to equity is minimal (roughly 2% in 2025, down from ~9% in 2020), which provides significant financial flexibility and lowers refinancing risk. Returns on equity are consistently strong (about ~20% in 2023–2025), suggesting the company is generating attractive profits without relying on heavy borrowing. A watch item is that strong ROE paired with very low leverage implies performance is driven by operations—any sustained margin or demand pressure would be felt directly in returns.

Cash Flow

Cash generation is generally strong: operating cash flow and free cash flow were robust in 2023 and 2025, and free cash flow has been close to net income in recent years (around ~93% in 2025), indicating good earnings conversion. However, cash flow has shown notable volatility, most clearly in 2022 when operating cash flow dropped sharply and coverage versus net income was weak, and in 2024 when free cash flow declined materially versus the prior year. The rebound in 2025 is a positive signal, but the uneven pattern lowers confidence versus the very consistent profitability profile.

Breakdown	Aug 2025	Aug 2024	Aug 2023	Aug 2022	Aug 2021
Income Statement
Total Revenue	27.45B	25.05B	22.96B	18.27B	17.14B
Gross Profit	10.79B	9.81B	9.04B	7.16B	6.65B
EBITDA	6.35B	5.81B	4.94B	3.43B	2.98B
Net Income	4.08B	3.76B	3.31B	2.20B	2.06B
Balance Sheet
Total Assets	23.80B	22.32B	20.60B	16.65B	14.42B
Cash, Cash Equivalents and Short-Term Investments	6.61B	5.99B	6.87B	4.63B	5.45B
Total Debt	434.61M	768.14M	763.65M	622.45M	802.02M
Total Liabilities	4.13B	4.17B	4.36B	3.30B	3.10B
Stockholders Equity	19.66B	18.15B	16.24B	13.35B	11.33B
Cash Flow
Free Cash Flow	3.95B	2.31B	3.53B	160.62M	2.24B
Operating Cash Flow	4.25B	3.02B	3.77B	239.58M	2.31B
Investing Cash Flow	-547.22M	-1.72B	-1.48B	-213.75M	-465.36M
Financing Cash Flow	-2.95B	-1.52B	-555.70M	-819.30M	-709.84M

Transaction Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1098.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7818, the sentiment is Positive. The current price of 1098 is below the 20-day moving average (MA) of 1290.45, below the 50-day MA of 1213.04, and below the 200-day MA of 1170.70, indicating a neutral trend. The MACD of 20.67 indicates Positive momentum. The RSI at 49.30 is Neutral, neither overbought nor oversold. The STOCH value of 11.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7818.

Transaction Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7818	80 Outperform	¥72.34B	12.40	―	2.57%	10.64%	-7.53%
7819	70 Outperform	¥16.34B	7.61	―	3.28%	5.75%	26.35%
3180	70 Outperform	¥16.62B	22.67	―	1.11%	13.45%	-5.58%
7823	64 Neutral	¥26.14B	14.66	―	3.42%	2.30%	19.67%
4936	63 Neutral	¥8.77B	36.09	―	2.65%	11.87%	-31.02%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
4934	52 Neutral	¥6.53B	3.82	―	―	-19.42%	―

Transaction Co., Ltd. Corporate Events

Transaction Co. Delivers Strong Q1 Earnings and Confirms Moderate Full-Year Growth Outlook

Transaction Co., Ltd. reported solid first-quarter results for the three months ended November 30, 2025, with net sales rising 12.1% year on year to ¥7.97 billion and profit attributable to owners of parent increasing 17.0% to ¥1.22 billion, reflecting improved profitability and robust demand. The company maintained a strong financial position with an equity-to-asset ratio of 82.9% and confirmed its earnings forecast for the fiscal year ending August 31, 2026, projecting 7.5% net sales growth and a modest 1.0% increase in full-year profit, while implementing a 2-for-1 stock split and signaling a lower annual dividend on a post-split basis, which together suggest a focus on liquidity and longer-term shareholder returns despite only moderate profit growth expectations.

The most recent analyst rating on (JP:7818) stock is a Buy with a Yen1382.00 price target. To see the full list of analyst forecasts on Transaction Co., Ltd. stock, see the JP:7818 Stock Forecast page.

Transaction Co. Delivers Double-Digit Q1 Profit Growth and Confirms FY2026 Outlook After Stock Split

Transaction Co., Ltd. reported robust results for the three months ended November 30, 2025, with net sales rising 12.1% year on year to ¥7,966 million and profit attributable to owners of parent increasing 17.0% to ¥1,222 million, supported by double-digit growth in operating and ordinary profits and higher comprehensive income. The company maintained a solid financial position with total assets of ¥23,586 million and an equity-to-asset ratio of 82.9%, confirmed its dividend stance following a 2-for-1 stock split by forecasting a total annual dividend of ¥30 per share for the year ending August 31, 2026, and left its full-year guidance unchanged, projecting modest single-digit growth in sales and profits, signaling steady but moderated earnings expansion for shareholders and other stakeholders.

The most recent analyst rating on (JP:7818) stock is a Buy with a Yen1230.00 price target. To see the full list of analyst forecasts on Transaction Co., Ltd. stock, see the JP:7818 Stock Forecast page.

Transaction Co. Expands Reach of Shareholder Benefits After Stock Split

Transaction Co., Ltd. will continue its semiannual shareholder benefit program following a two-for-one stock split executed with an August 31, 2025 record date, keeping the eligibility threshold at 500 shares and thereby effectively broadening access to the benefits without changing conditions. For shareholders recorded in Japan holding 500 or more shares as of February 28, 2026, the company will distribute a digital notebook and a laptop bag starting in late April 2026, a move aimed at deepening understanding of its product lineup, reinforcing shareholder loyalty, and cultivating long-term ‘fan’ shareholders by showcasing its functional, stylish, and portable offerings.

The most recent analyst rating on (JP:7818) stock is a Buy with a Yen1334.00 price target. To see the full list of analyst forecasts on Transaction Co., Ltd. stock, see the JP:7818 Stock Forecast page.

Transaction Completes Restricted Stock Treasury Share Disposal for Executive Compensation

Transaction Co., Ltd. has completed the allotment and payment procedures for the disposal of its treasury shares under a restricted stock compensation plan approved by its board earlier this month. The company issued 60,000 common shares without cash consideration to four internal directors and 4,500 shares to three directors of its subsidiaries at a disposal price of ¥1,062 per share, based on the market closing price prior to the board resolution. The move, totaling ¥68.5 million in notional value, is designed to align management and subsidiary leadership incentives more closely with shareholder interests and to strengthen the company’s medium- to long‑term governance and performance orientation by increasing equity-based compensation for key executives.

The most recent analyst rating on (JP:7818) stock is a Buy with a Yen1334.00 price target. To see the full list of analyst forecasts on Transaction Co., Ltd. stock, see the JP:7818 Stock Forecast page.