Rikei Corporation (8226) AI Stock Analysis

• Market Cap: ¥6.47B
• Dividend Yield: 1.45%
• Average Volume (3M): 342.59K
• Price to Earnings (P/E): 8.8
• Beta (1Y): 1.63
• Revenue Growth: 31.91%
• EPS Growth: 50.55%
• Country: JP
• Employees: 165
• Sector: Technology
• Sector Strength: 85
• Industry: Information Technology Services
• EPS (TTM): 5.50
• Shares Outstanding: 15,514,721
• 10 Day Avg. Volume: 257,570
• 30 Day Avg. Volume: 342,593
• 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: ¥402.00
• Price Target Upside: -2.66% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 71 Outperform
• Price Target: ¥402.00 ▼(-2.66% Downside)

Rikei Corporation's stock score is driven primarily by its strong financial performance and attractive valuation. The company shows robust revenue growth and a stable financial position, though cash flow challenges need addressing. The stock's valuation is appealing with a low P/E ratio and reasonable dividend yield. Technical analysis indicates mixed signals, with short-term weakness but potential long-term strength.

Positive Factors

Revenue Growth

The significant revenue growth indicates strong demand for Rikei's IT solutions and telecommunications services, suggesting a robust market position and effective business strategy.

Balance Sheet Health

A conservative debt profile and strong equity backing provide financial stability and reduce risk, allowing Rikei to invest in growth opportunities with less financial strain.

Effective Cost Management

Healthy margins reflect effective cost management, enhancing profitability and enabling Rikei to maintain competitive pricing while investing in growth and innovation.

Negative Factors

Cash Flow Challenges

Negative cash flows indicate challenges in converting profits into cash, which could impact liquidity and limit Rikei's ability to fund operations and growth initiatives.

Profitability Concerns

The moderate net profit margin suggests room for improvement in overall profitability, potentially impacting Rikei's ability to reinvest in business expansion and innovation.

Cash Management Issues

Difficulty in converting net income to cash flow indicates potential inefficiencies in cash management, which could affect Rikei's financial flexibility and operational stability.

Rikei Corporation Business Overview & Revenue Model

Company Description

Rikei Corporation (8226) is a Japanese company primarily engaged in the IT solutions and telecommunications sectors. It provides a wide range of services, including system integration, network solutions, and the sale of electronic components. The company caters to various industries, such as finance, manufacturing, and government, offering tailored solutions to meet specific business needs.

How the Company Makes Money

Rikei Corporation generates revenue through its diversified portfolio of IT solutions and telecommunications services. Key revenue streams include system integration projects, where the company designs and implements customized IT systems for clients, and network solutions, which involve the setup and maintenance of communication infrastructures. Additionally, Rikei profits from the distribution and sale of electronic components and devices, which are crucial for various technological applications. Strategic partnerships with technology vendors and service providers also play a significant role in enhancing its offerings and expanding market reach, thereby contributing to its earnings.

Rikei Corporation Financial Statement Overview

Summary

Rikei Corporation demonstrates strong revenue growth and stable financial positioning, with effective cost management reflected in healthy EBIT and EBITDA margins. The balance sheet is robust with a conservative debt profile and strong equity backing. However, challenges in cash flow management, with negative operating and free cash flows, could impact liquidity if not addressed.

Income Statement

Rikei Corporation has demonstrated robust revenue growth, with a significant increase from ¥12.13 billion to ¥18.73 billion over the last year, indicating a strong upward trajectory in sales. Gross profit margin stands at 18.65%, and the net profit margin is 3.53%, which shows moderate profitability. The EBIT and EBITDA margins are 5.98% and 5.59%, respectively, reflecting effective cost management. However, the net profit margin suggests room for improvement in overall profitability.

Balance Sheet

The company maintains a healthy financial position with a debt-to-equity ratio of 0.57, indicating conservative leverage. The equity ratio is 48.33%, showing solid asset backing by equity. Return on equity (ROE) has improved to 12.35%, reflecting effective utilization of equity to generate profits. The strong asset base and equity position provide stability and reduced financial risk.

Cash Flow

Rikei Corporation's cash flow operations display challenges, with negative operating cash flow of ¥322 million and free cash flow of ¥-353 million. The free cash flow growth rate has improved compared to the previous period, but remains negative, presenting cash management issues. The operating cash flow to net income ratio is negative, suggesting difficulty in converting profits into cash flow. However, financing activities have positively contributed to cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	18.72B	18.73B	12.13B	10.29B	10.86B	10.14B
Gross Profit	3.53B	3.49B	2.79B	2.34B	2.33B	2.24B
EBITDA	1.05B	1.05B	553.13M	195.58M	267.48M	296.83M
Net Income	660.58M	661.26M	382.77M	66.94M	139.67M	157.71M
Balance Sheet
Total Assets	11.08B	11.08B	10.31B	7.29B	7.12B	7.17B
Cash, Cash Equivalents and Short-Term Investments	3.08B	3.08B	3.06B	2.25B	2.91B	3.02B
Total Debt	3.07B	3.07B	2.58B	699.58M	360.00M	287.00M
Total Liabilities	5.70B	5.70B	5.50B	2.84B	2.69B	2.87B
Stockholders Equity	5.36B	5.36B	4.81B	4.45B	4.43B	4.29B
Cash Flow
Free Cash Flow	0.00	-353.39M	-1.02B	-968.56M	-141.63M	282.83M
Operating Cash Flow	0.00	-322.07M	-983.40M	-961.66M	-67.27M	296.61M
Investing Cash Flow	0.00	-70.33M	-33.91M	15.00M	-65.25M	-92.66M
Financing Cash Flow	0.00	405.92M	1.83B	283.50M	16.62M	-347.13M

Rikei Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 413.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8226, the sentiment is Positive. The current price of 413 is above the 20-day moving average (MA) of 408.90, above the 50-day MA of 381.40, and above the 200-day MA of 352.80, indicating a bullish trend. The MACD of 10.43 indicates Negative momentum. The RSI at 57.00 is Neutral, neither overbought nor oversold. The STOCH value of 69.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8226.

Rikei Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3920	79 Outperform	¥5.65B	13.83		0.99%	7.38%	515.19%
3988	75 Outperform	¥6.43B	14.75		1.11%	12.89%	-8.37%
3940	72 Outperform	¥7.05B	17.49		2.15%	8.71%	4.70%
8226	71 Outperform	¥6.47B	8.83		1.45%	31.91%	50.55%
4198	62 Neutral	¥4.78B	18.47		3.75%	7.72%	-24.97%
Sector *	61 Neutral	$36.58B	11.16	-10.43%	1.86%	8.71%	-7.09%
4398	57 Neutral	¥5.63B	38.77		1.19%	-5.47%	-68.65%