Avex Inc. (7860) AI Stock Analysis

• Market Cap: ¥55.49B
• Dividend Yield: 4.08%
• Average Volume (3M): 134.89K
• Price to Earnings (P/E): 46.9
• Beta (1Y): 0.45
• Revenue Growth: -1.27%
• EPS Growth: 10.18%
• Country: JP
• Employees: 1,538
• Sector: Communication Services
• Sector Strength: 84
• Industry: Entertainment
• EPS (TTM): -22.86
• Shares Outstanding: 45,792,500
• 10 Day Avg. Volume: 118,840
• 30 Day Avg. Volume: 134,886
• 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: 65 Neutral
• Price Target: ¥1,378.00 ▲(12.67%Upside)

Avex Inc.'s most significant factors include its low debt levels and stable equity position, which contribute positively to financial stability. However, the high P/E ratio raises valuation concerns, and the company's challenges in profitability and cash flow generation are notable risks.

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
EBITDA	454.50M	5.38B	4.60B	7.08B	4.47B	23.01B
Net Income	1.71B	1.14B	987.00M	2.74B	919.00M	12.83B
Balance Sheet
Total Assets	109.97B	105.96B	109.89B	108.92B	97.80B	105.11B
Cash, Cash Equivalents and Short-Term Investments	41.11B	35.69B	47.08B	48.14B	44.67B	52.65B
Total Debt	4.00M	3.00M	6.00M	9.00M	16.00M	58.00M
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: Negative
• Last Price: 1223.00
• 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 1223 is below the 20-day moving average (MA) of 1270.05, below the 50-day MA of 1263.22, and below the 200-day MA of 1362.26, indicating a bearish trend. The MACD of -8.66 indicates Positive momentum. The RSI at 36.26 is Neutral, neither overbought nor oversold. The STOCH value of 4.07 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
3791	69 Neutral	¥40.31B	35.89		108.20%	32.27%	-35.94%
4712	68 Neutral	¥13.43B	5.43		1.41%	17.70%	68.00%
4772	68 Neutral	¥12.98B	20.68		0.89%	-4.12%	115.46%
6879	66 Neutral	¥35.33B	34.55		1.89%	-2.78%	-256.53%
7860	65 Neutral	¥55.49B	46.87	2.03%	4.08%	-1.27%	10.18%
Sector *	61 Neutral	$40.69B	-0.79	-11.97%	3.78%	2.11%	-69.16%
9601	53 Neutral	¥181.56B	―		0.23%	-1.70%	-122.01%

Avex Inc. Corporate Events

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.

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.