Avex Inc. (7860) AI Stock Analysis

• Market Cap: ¥56.46B
• Dividend Yield: 4.16%
• Average Volume (3M): 160.93K
• Price to Earnings (P/E): 142.3
• Beta (1Y): 0.34
• Revenue Growth: 11.52%
• EPS Growth: 162.04%
• Country: JP
• Employees: 1,538
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): 2.42
• Shares Outstanding: 45,919,300
• 10 Day Avg. Volume: 155,170
• 30 Day Avg. Volume: 160,933
• PEG Ratio: 2.51
• Price to Book (P/B): 1.12
• Price to Sales (P/S): 0.42
• P/FCF Ratio: -7.59
• 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: 52 Neutral
• Price Target: ¥1,239.00 ▼(-1.35% Downside)

Avex Inc.'s overall stock score is primarily influenced by its mixed financial performance and technical analysis. The company's low leverage is a positive, but profitability and cash flow issues are significant concerns. The technical indicators suggest a bearish trend, and the high P/E ratio raises valuation concerns despite a decent dividend yield.

Positive Factors

Low Leverage

Low leverage enhances financial stability, allowing Avex Inc. to navigate economic fluctuations with reduced risk of financial distress.

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion potential.

Strategic Partnerships

Partnerships with cloud providers enhance service offerings and provide a competitive edge, driving additional revenue streams and market reach.

Negative Factors

Profitability Challenges

Negative EBIT margins indicate operational challenges, which can hinder profitability and require strategic adjustments to improve efficiency.

Cash Flow Issues

Negative free cash flow impacts liquidity and limits the company's ability to invest in growth opportunities or weather economic downturns.

Earnings Decline

Declining earnings per share suggest potential issues in cost management or revenue generation, impacting investor confidence and future growth.

Avex Inc. Business Overview & Revenue Model

Company Description

Avex Inc., an entertainment company, engages in music, anime, digital, and other businesses in Japan. The company plans, produces, and sells musical content, including sound sources and images; publishes and distributes music; and plans, produces, and manages live concerts, special events, stage performances/musicals, and various featuring artists. It also manages artists, celebrities, creators, athletes, intellectuals, and others; operates fan clubs; and sells tickets. In addition, the company is involved in building an integrated framework for discovering, fostering, and developing of talent. Further, it plans, produces, and sells animated shows in various forms, merchandising goods, special events, games, and movies; and designs and manages digital platforms dTV and AWA. The company was formerly known as Avex Group Holdings Inc. and changed its name to Avex Inc. in November 2017. Avex Inc. was founded in 1988 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Avex Inc. generates revenue through multiple key streams. Primarily, the company earns money by selling software licenses and subscriptions for its proprietary applications, which cater to businesses looking to enhance their digital presence and operational efficiency. Additionally, Avex offers consulting and implementation services for its technology solutions, providing clients with tailored support that ensures effective integration. The company also has strategic partnerships with major cloud service providers, allowing it to offer bundled services that drive additional revenue. Furthermore, Avex generates income through maintenance contracts and ongoing support services, ensuring a steady stream of income from existing clients.

Avex Inc. Financial Statement Overview

Summary

Avex Inc. shows a mixed financial performance. While leveraging is low, indicating financial stability, profitability metrics and cash flow generation are areas of concern. The company needs to improve its operational efficiency and cash management to bolster financial health.

Income Statement

Avex Inc. has shown inconsistent revenue growth over the years. Gross Profit Margin has been relatively stable, but the company experienced a significant drop in EBIT margin to negative territory in the latest year, indicating operating challenges. The Net Profit Margin improved but remains low, highlighting ongoing profitability issues.

Balance Sheet

The company's debt-to-equity ratio is very low, indicating minimal leverage, which is a positive sign of stability. However, the return on equity is modest, suggesting average profitability relative to equity. The equity ratio indicates a solid equity position relative to total assets.

Cash Flow

Avex Inc. has faced challenges with free cash flow generation, evidenced by negative free cash flows in recent years. The operating cash flow to net income ratio indicates inefficiencies in converting profits to cash, posing potential liquidity concerns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	138.88B	131.69B	133.39B	121.56B	98.44B	81.53B
Gross Profit	38.48B	34.93B	39.29B	38.99B	35.23B	25.62B
EBITDA	8.03B	5.38B	4.60B	7.08B	4.47B	23.01B
Net Income	67.00M	1.14B	987.00M	2.74B	919.00M	12.83B
Balance Sheet
Total Assets	102.14B	105.96B	109.89B	108.92B	97.80B	105.11B
Cash, Cash Equivalents and Short-Term Investments	28.36B	35.69B	47.08B	48.14B	44.67B	52.65B
Total Debt	1.75B	3.00M	6.00M	9.00M	16.00M	58.00M
Total Liabilities	51.35B	54.85B	53.79B	50.08B	37.11B	46.77B
Stockholders Equity	49.74B	50.11B	55.19B	58.07B	57.87B	55.42B
Cash Flow
Free Cash Flow	0.00	-7.37B	133.00M	5.61B	-7.42B	-10.85B
Operating Cash Flow	0.00	-4.67B	3.69B	9.19B	-4.46B	-6.48B
Investing Cash Flow	0.00	928.00M	-2.40B	-3.13B	-3.39B	70.04B
Financing Cash Flow	0.00	-7.01B	-2.36B	-2.49B	-314.00M	-28.93B

Avex Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1256.00
• 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:7860, the sentiment is Positive. The current price of 1256 is above the 20-day moving average (MA) of 1232.05, above the 50-day MA of 1212.98, and above the 200-day MA of 1235.52, indicating a bullish trend. The MACD of 13.06 indicates Positive momentum. The RSI at 55.27 is Neutral, neither overbought nor oversold. The STOCH value of 16.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7860.

Avex Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4712	75 Outperform	¥13.58B	6.19	―	1.40%	26.47%	55.11%
4772	62 Neutral	¥12.17B	12.93	―	0.91%	8.13%	275.53%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3791	59 Neutral	¥27.45B	43.39	―	1.11%	-4.66%	-56.66%
7860	52 Neutral	¥56.46B	142.26	0.69%	4.16%	11.52%	162.04%
9601	46 Neutral	¥158.21B	29.77	―	0.26%	14.49%	―

Avex Inc. Corporate Events

Avex Doubles Full-Year Profit Forecast on Extraordinary Gain From Sanrio Affiliate Share Sale

Avex Inc. has revised its consolidated earnings forecast for the fiscal year ending March 31, 2026, keeping operating profit unchanged at 3.0 billion yen but sharply raising profit attributable to owners of parent from 1.2 billion yen to 2.8 billion yen, lifting projected earnings per share from 27.52 yen to 65.94 yen. The revision is driven mainly by an expected 1.0 billion yen extraordinary gain from the sale of all shares in its equity-method affiliate SANRIO SOUTHEAST ASIA PTE. LTD., as well as recent business trends, signaling a substantial improvement in bottom-line performance compared with both the previous forecast and the prior year’s results, and underscoring the financial impact of Avex’s portfolio rebalancing and strategic partnership with Sanrio Co., Ltd.

The most recent analyst rating on (JP:7860) stock is a Hold with a Yen1239.00 price target. To see the full list of analyst forecasts on Avex Inc. stock, see the JP:7860 Stock Forecast page.

Avex to Exit Sanrio Southeast Asia JV and Pursue Broader Strategic Partnership

Avex Inc. will transfer its entire 30% stake in SANRIO SOUTHEAST ASIA PTE. LTD., a Singapore-based joint venture with Sanrio Co., Ltd., to Sanrio, leading to the dissolution of the JV and Avex’s exit from equity-method accounting for the entity, while recognizing an extraordinary gain. Having achieved its initial five-year objective of rebuilding Sanrio characters into highly recognized brands in the Southeast Asian character licensing market, the two companies are now shifting from a regional JV model to a broader strategic partnership framework, signing a basic agreement toward a memorandum of understanding that will cover collaboration in music, events and merchandising to further create and expand IP in both Japanese and global markets.

The most recent analyst rating on (JP:7860) stock is a Hold with a Yen1239.00 price target. To see the full list of analyst forecasts on Avex Inc. stock, see the JP:7860 Stock Forecast page.

Avex Inc. Issues New Shares for Executive Compensation

Avex Inc. has announced the issuance of new shares as part of a restricted stock compensation plan aimed at aligning the interests of its directors and executives with those of its shareholders. This initiative is designed to motivate executives to achieve strategic objectives and enhance corporate value by allowing them to share in the benefits and risks associated with stock price fluctuations. The plan includes a transfer restriction period of three years, during which the shares cannot be transferred or otherwise disposed of, and aims to maximize shareholder value by involving directors of subsidiaries in the allocation.

The most recent analyst rating on (JP:7860) stock is a Hold with a Yen1239.00 price target. To see the full list of analyst forecasts on Avex Inc. stock, see the JP:7860 Stock Forecast page.

Avex Inc. Reports Increased Sales but Declining Profits in Interim Financial Results

Avex Inc. reported a significant increase in net sales for the interim period ending September 30, 2025, with a 14.1% rise compared to the previous year. However, the profit attributable to owners of the parent decreased by 47%, indicating challenges in maintaining profitability despite higher sales. The company also announced the addition of S10 Entertainment & Media LLC to its scope of consolidation, while Avex Technologies Inc. was excluded. The financial outlook remains cautious with no revisions to previously published earnings forecasts.

The most recent analyst rating on (JP:7860) stock is a Hold with a Yen1239.00 price target. To see the full list of analyst forecasts on Avex Inc. stock, see the JP:7860 Stock Forecast page.