Avex Inc. (7860) AI Stock Analysis

• Market Cap: €55.45B
• Dividend Yield: 4.3%
• Average Volume (3M): 160.93K
• Price to Earnings (P/E): 758.6
• Beta (1Y): 0.38
• 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: 45,914,100
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: ¥1,239.00 ▲(5.72% Upside)

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. (7860) is a technology-driven company specializing in the development and delivery of innovative digital solutions across various sectors, including e-commerce, cloud computing, and data analytics. The company focuses on enhancing customer experiences through its suite of products and services, which include software applications, digital marketing solutions, and data management systems tailored to meet the evolving needs of businesses in a digital-first world.

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: Negative
• Last Price: 1172.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 Negative. The current price of 1172 is below the 20-day moving average (MA) of 1192.45, below the 50-day MA of 1213.06, and below the 200-day MA of 1237.09, indicating a bearish trend. The MACD of -13.47 indicates Positive momentum. The RSI at 42.40 is Neutral, neither overbought nor oversold. The STOCH value of 25.06 is Neutral, 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	75 Outperform	¥13.34B	5.79	―	1.40%	26.47%	55.11%
3791	69 Neutral	¥27.67B	33.35	―	1.08%	-4.66%	-56.66%
4772	62 Neutral	¥13.44B	15.48	―	0.92%	8.13%	275.53%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6879	55 Neutral	―	―	―	―	3.29%	-321.34%
7860	52 Neutral	€55.45B	758.56	0.69%	4.30%	11.52%	162.04%
9601	46 Neutral	¥168.10B	41.32	―	0.25%	14.49%	―

Avex Inc. Corporate Events

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.

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.

Avex Inc. Announces Share Transfer and Board Changes at Virtual Avex

Avex Inc. announced a strategic move to transfer shares of its subsidiary, Virtual Avex Inc. (V AI), to Keisuke Hara, a director of V AI, as part of a Management Buyout (MBO). This decision aligns with V AI’s goal to pursue a unique growth strategy and reflects Avex Inc.’s ongoing review of its business portfolio, potentially impacting its operations and market positioning.