Rikei Corporation (8226) AI Stock Analysis

• Market Cap: ¥7.35B
• Dividend Yield: 1.26%
• Average Volume (3M): 340.99K
• Price to Earnings (P/E): 10.0
• Beta (1Y): 1.63
• Revenue Growth: 31.91%
• EPS Growth: 50.55%
• Country: JP
• Employees: 165
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 5.50
• Shares Outstanding: 15,514,721
• 10 Day Avg. Volume: 292,540
• 30 Day Avg. Volume: 340,990
• PEG Ratio: 0.11
• Price to Book (P/B): 1.03
• Price to Sales (P/S): 0.29
• P/FCF Ratio: -15.57
• 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: -17.28% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 75 Outperform
• Price Target: ¥534.00 ▲(9.88% Upside)

Rikei Corporation's stock score is driven by strong financial performance with robust revenue growth and a stable balance sheet, despite cash flow challenges. Technical analysis supports a bullish outlook with positive momentum indicators. The valuation is reasonable, providing a balanced risk-reward profile.

Rikei Corporation Business Overview & Revenue Model

Company Description

Rikei Corporation (8226) is a Japan-based company primarily engaged in the information technology and telecommunications sectors. The company provides a range of services including system integration, software development, and IT consulting. Rikei also specializes in network solutions, data center services, and cloud computing, catering to various industries such as finance, healthcare, and manufacturing.

How the Company Makes Money

Rikei Corporation generates revenue through multiple streams, primarily by offering IT services and solutions to corporate clients. The company's revenue model includes project-based contracts for system integration and software development, as well as ongoing service agreements for IT support and maintenance. Additionally, Rikei earns income from sales of hardware and software products, often acting as a reseller for major technology providers. Strategic partnerships with key players in technology enhance their service offerings and client reach, further contributing to their earnings. The company also benefits from a growing demand for digital transformation and cloud services, which has become an essential component of its revenue growth.

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	19.60B	18.73B	12.13B	10.29B	10.86B	10.14B
Gross Profit	3.66B	3.49B	2.79B	2.34B	2.33B	2.24B
EBITDA	1.14B	1.05B	553.13M	195.58M	267.48M	296.83M
Net Income	732.69M	661.26M	382.77M	66.94M	139.67M	157.71M
Balance Sheet
Total Assets	13.32B	11.08B	10.31B	7.29B	7.12B	7.17B
Cash, Cash Equivalents and Short-Term Investments	4.06B	3.08B	3.06B	2.25B	2.91B	3.02B
Total Debt	5.32B	3.07B	2.58B	699.58M	360.00M	287.00M
Total Liabilities	7.95B	5.70B	5.50B	2.84B	2.69B	2.87B
Stockholders Equity	5.35B	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: 486.00
• 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 486 is above the 20-day moving average (MA) of 445.60, above the 50-day MA of 421.18, and above the 200-day MA of 370.06, indicating a bullish trend. The MACD of 14.65 indicates Negative momentum. The RSI at 61.06 is Neutral, neither overbought nor oversold. The STOCH value of 75.77 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	¥5.56B	13.63	―	1.19%	7.38%	515.19%
8226	75 Outperform	¥7.35B	10.03	―	1.26%	31.91%	50.55%
3940	72 Outperform	¥6.16B	15.17	―	2.46%	8.71%	4.70%
3988	68 Neutral	¥6.27B	14.72	―	1.17%	13.34%	-10.63%
4398	65 Neutral	¥6.19B	42.63	―	1.09%	-5.47%	-68.77%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4198	60 Neutral	¥4.04B	44.57	―	4.35%	-5.92%	-78.33%