Avex Inc. (7860) AI Stock Analysis

• Market Cap: €58.09B
• Dividend Yield: 3.95%
• Average Volume (3M): 115.50K
• Price to Earnings (P/E): 799.6
• Beta (1Y): 0.38
• Revenue Growth: 9.39%
• EPS Growth: -37.75%
• Country: JP
• Employees: 1,538
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): 17.96
• Shares Outstanding: 45,914,100
• 10 Day Avg. Volume: 127,090
• 30 Day Avg. Volume: 115,503
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: €1,346.19
• Price Target Upside: 6.33% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 60 Neutral
• Price Target: ¥1,352.00 ▲(6.79% Upside)

The overall stock score for Avex Inc. is primarily influenced by its mixed financial performance and high valuation concerns. While the company shows financial stability due to low leverage, its profitability and cash flow issues are significant drawbacks. The technical analysis indicates neutral momentum, providing no strong directional bias. The high P/E ratio suggests overvaluation, which is a major risk factor despite the attractive dividend yield.

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 streams, primarily driven by its music and entertainment business. The company earns money from the production and sale of music albums, digital downloads, and streaming services. Concerts and live events contribute significantly to its revenue, with ticket sales and merchandise forming a substantial part of income. Avex also monetizes its substantial catalog of music and video content through licensing deals and partnerships with digital platforms. In addition, the company earns from its talent management services, where it receives a percentage of the income generated by the artists and performers it represents. Strategic partnerships and joint ventures in multimedia projects further enhance its revenue base.

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	131.69B	131.69B	133.39B	121.56B	98.44B	81.53B
Gross Profit	35.84B	34.93B	39.29B	38.99B	35.23B	25.62B
EBITDA	5.38B	5.38B	4.60B	7.08B	4.47B	23.01B
Net Income	1.14B	1.14B	987.00M	2.74B	919.00M	12.83B
Balance Sheet
Total Assets	105.96B	105.96B	109.89B	108.92B	97.80B	105.11B
Cash, Cash Equivalents and Short-Term Investments	35.69B	35.69B	47.08B	48.14B	44.67B	52.65B
Total Debt	3.00M	3.00M	6.00M	9.00M	16.00M	58.00M
Total Liabilities	54.85B	54.85B	53.79B	50.08B	37.11B	46.77B
Stockholders Equity	50.11B	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: Negative
• Last Price: 1266.00
• 50DMA: Negative
• 100DMA: Negative
• 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:7860, the sentiment is Negative. The current price of 1266 is below the 20-day moving average (MA) of 1288.15, below the 50-day MA of 1275.18, and below the 200-day MA of 1314.43, indicating a bearish trend. The MACD of 0.92 indicates Positive momentum. The RSI at 40.82 is Neutral, neither overbought nor oversold. The STOCH value of 5.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7860.

Avex Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4712	72 Outperform	14.07B	6.13	10.39%	1.35%	22.92%	65.63%
3791	69 Neutral	30.53B	35.30	0.00%	0.99%	23.28%	-57.08%
6879	66 Neutral	35.11B	-10.21	-10.76%	1.90%	3.29%	-321.34%
4772	66 Neutral	13.10B	15.22	10.67%	0.88%	1.62%	188.00%
7860	60 Neutral	€58.09B	799.63	0.09%	3.95%	9.39%	-37.75%
9601	46 Neutral	175.10B	187.55	-0.71%	0.24%	5.41%	-28.32%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Avex Inc. Corporate Events

Avex Inc. Reports Q1 Financial Results with Increased Sales but Lower Profits

Avex Inc. reported a notable increase in net sales for the first quarter of the fiscal year ending March 31, 2026, with a 28.1% rise compared to the previous year. Despite this growth, the company’s profit attributable to owners of the parent decreased by 58.5%, indicating challenges in maintaining profitability. The company also underwent changes in its scope of consolidation, adding S10 Entertainment & Media LLC and excluding Avex Technologies Inc., which may impact its strategic direction and operations.

Avex Inc. Completes Payment for New Shares with Adjustments

Avex Inc. announced the completion of payment procedures for new shares issued as restricted stock compensation, initially resolved in a Board meeting on June 27, 2025. The number of shares to be issued was adjusted due to the partial forfeiture of rights by one intended allottee, reducing the total shares from 126,500 to 121,600, impacting the total issue value.

Avex Inc. Issues New Shares for Executive Compensation

Avex Inc. announced the issuance of new shares as part of a restricted stock compensation plan aimed at aligning the interests of its executive directors and subsidiary directors with shareholders. This move is expected to motivate executives to achieve medium-term strategic objectives, thereby enhancing corporate value and stock price, while also ensuring that directors of subsidiaries operate with a shareholder-focused perspective.