Avex Inc. (7860) AI Stock Analysis

• Market Cap: €57.53B
• Dividend Yield: 3.94%
• Average Volume (3M): 129.19K
• Price to Earnings (P/E): 48.6
• Beta (1Y): 0.46
• Revenue Growth: -1.27%
• EPS Growth: 15.31%
• Country: JP
• Employees: 1,538
• Sector: Communication Services
• Sector Strength: 79
• Industry: Entertainment
• EPS (TTM): -22.86
• Shares Outstanding: 45,792,500
• 10 Day Avg. Volume: 122,530
• 30 Day Avg. Volume: 129,186
• PEG Ratio: -2.80
• Price to Book (P/B): 1.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.99
• 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

• Rating: 59 Neutral
• Price Target: ¥1,302.00 ▲(4.49%Upside)

The overall score is driven by financial performance and technical analysis. While the company shows financial stability with low leverage, profitability issues and negative cash flow generation are concerning. The technical indicators suggest a bearish trend, and the high P/E ratio indicates overvaluation despite a decent dividend yield.

Avex Inc. Business Overview & Revenue Model

Company Description

Avex Inc. (7860) is a leading Japanese entertainment conglomerate, primarily engaged in the production and distribution of music, video content, and digital entertainment. The company operates through various segments including music, video, and digital platforms, and has expanded into talent management and live events. Avex is known for its significant role in the Japanese pop music industry and its efforts in promoting music both domestically and internationally.

How the Company Makes Money

Avex Inc. generates revenue through a diversified model that includes music sales, digital streaming, and licensing. The company earns money by producing and distributing music CDs and digital downloads, as well as through streaming services. Avex also profits from organizing live concerts and events, managing artists and talents, and through merchandising. In addition, the company benefits from partnerships with global platforms for content distribution, licensing deals, and advertising revenue from digital platforms. These diverse revenue streams and strategic partnerships contribute to Avex's earnings and market presence.

Avex Inc. Financial Statement Overview

Summary

Avex Inc. shows mixed financial performance. While the low debt-to-equity ratio indicates financial stability, the inconsistent revenue growth and negative EBIT margin highlight operational challenges. The company's poor cash flow generation raises liquidity concerns.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
131.61B	131.69B	133.39B	121.56B	98.44B	81.53B
	Gross Profit
36.66B	34.93B	39.29B	38.99B	35.23B	25.62B
	EBIT
-1.21B	-1.82B	1.26B	3.38B	2.58B	-6.28B
	EBITDA
454.50M	5.38B	4.60B	7.08B	4.47B	23.01B
	Net Income Common Stockholders
1.71B	1.14B	987.00M	2.74B	919.00M	12.83B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
41.11B	35.69B	47.08B	48.14B	44.67B	52.65B
	Total Assets
109.97B	105.96B	109.89B	108.92B	97.80B	105.11B
	Total Debt
4.00M	3.00M	6.00M	9.00M	16.00M	58.00M
	Net Debt
-41.10B	-35.69B	-47.07B	-48.13B	-44.66B	-52.60B
	Total Liabilities
58.04B	54.85B	53.79B	50.08B	37.11B	46.77B
	Stockholders Equity
50.95B	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	3.83B	-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: Neutral
• Last Price: 1246.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7860, the sentiment is Neutral. The current price of 1246 is below the 20-day moving average (MA) of 1254.65, below the 50-day MA of 1260.20, and below the 200-day MA of 1368.97, indicating a neutral trend. The MACD of 2.27 indicates Negative momentum. The RSI at 51.24 is Neutral, neither overbought nor oversold. The STOCH value of 35.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7860.

Avex Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4712	80 Outperform	¥14.66B	5.92		1.29%	17.70%	68.00%
4772	68 Neutral	¥12.28B	19.57		0.94%	-4.12%	115.46%
6879	66 Neutral	¥35.20B	34.55		1.89%	-2.78%	-256.62%
3791	64 Neutral	¥36.54B	32.54		0.83%	32.27%	-35.94%
Sector *	61 Neutral	$14.64B	5.81	-3.99%	6.03%	2.71%	-31.56%
7860	59 Neutral	€57.53B	48.59	2.03%	3.94%	-1.27%	15.31%
9601	53 Neutral	¥184.99B	―		0.22%	-1.70%	-122.01%

Avex Inc. Corporate Events

Avex Inc. Withholds Board Bonuses Amid Financial Loss

Avex Inc. announced that its Board of Directors has decided not to pay bonuses to its board members for the fiscal year ending March 31, 2025, due to a reported loss in operating profit. This decision reflects the company’s commitment to taking responsibility for its financial performance and aligns with the recommendations of the Nomination and Compensation Committee, emphasizing accountability and transparency in its executive compensation practices.

Avex Inc. Reports Fiscal Year 2025 Financial Results Amid Market Challenges

Avex Inc. reported a decline in net sales for the fiscal year ending March 31, 2025, with a slight decrease of 1.3% compared to the previous year. Despite the drop in sales, the company saw a 15.4% increase in profit attributable to owners of the parent, indicating improved profitability. The financial results highlight a challenging year with a decrease in total assets and net assets, but the company remains committed to maintaining its dividend payments. The exclusion of THINKR Co., Ltd. from its consolidation scope and changes in accounting policies were notable adjustments during the period.

Avex Inc. Reports Financial Discrepancies and Decline in Profits

Avex Inc. reported discrepancies between its financial forecasts and actual results for the fiscal year ended March 31, 2025, primarily due to additional impairment losses in its music business. The company also noted a decline in net sales and ordinary profit compared to the previous year, attributed to provisions for doubtful accounts and the completion of commissioned work in the video streaming segment.

Avex Inc. Expands Global Reach with S10 Acquisition and US Reorganization

Avex Inc. has announced the acquisition of additional equity interest in S10 Entertainment & Media LLC, making it a consolidated subsidiary. This move is aimed at leveraging S10’s global management resources to expand opportunities for Avex’s artists in international markets, thus accelerating the global expansion of Japanese-originated IP. Additionally, Avex is reorganizing its US operations by appointing S10’s CEO, Brandon Silverstein, as the CEO of Avex Music Group LLC to enhance its US music business and drive growth in the global music industry.