Tomato Bank, Ltd. (8542) AI Stock Analysis

• Market Cap: ¥19.06B
• Dividend Yield: 3.37%
• Average Volume (3M): 18.46K
• Price to Earnings (P/E): 4.8
• Beta (1Y): 0.64
• Revenue Growth: 3.70%
• EPS Growth: 24.98%
• Country: JP
• Employees: 768
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 76.74
• Shares Outstanding: 11,679,030
• 10 Day Avg. Volume: 21,960
• 30 Day Avg. Volume: 18,460
• PEG Ratio: 0.63
• Price to Book (P/B): 0.42
• Price to Sales (P/S): 1.02
• P/FCF Ratio: 1.59
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: ¥1,812.00 ▲(20.48% Upside)
• Action: Reiterated Date: 03/06/26
• Date: Action: Reiterated 03/06/26

The score is driven by attractive valuation (very low P/E and ~3% dividend yield) and moderate financial performance (improving margins and manageable leverage), offset by weaker technical momentum (negative MACD and price below the 20-day average) and fundamental concerns around declining revenue and past operating cash flow issues.

Positive Factors

Improving profitability

Improved net and EBIT margins indicate the bank has tightened costs and/or enhanced loan pricing, supporting sustainable profitability. Strong margins provide a buffer against top-line volatility, enabling continued earnings retention, reinvestment, and support for dividends over the medium term.

Reduced leverage

A lower debt-to-equity ratio (0.72) signals reduced financial leverage and improved balance sheet flexibility. This durable improvement lessens refinancing and interest-rate risk, enhances capacity to lend or absorb losses, and supports strategic initiatives without immediate capital raises.

Stronger cash generation

A high operating-cash-flow to net-income ratio (2.97) and notable free cash flow growth indicate improved cash conversion and internal funding capacity. Durable cash generation strengthens the bank's ability to fund lending, invest in operations, pay dividends, and manage shocks without relying heavily on external financing.

Negative Factors

Declining revenue

A year-over-year revenue decline of 7.65% reduces the top-line base needed to absorb fixed costs and sustain growth. If persistent, shrinking revenue can compress margins, limit reinvestment, and signal market share loss or weaker loan/deposit activity, creating medium-term pressure on strategic initiatives.

Historical cash-flow volatility

Although recent OCF is strong, historical periods of negative operating cash flow highlight volatility in cash conversion and potential weaknesses in liquidity management. Recurrence of cash-flow stress would constrain lending, capital spending, and dividend policy, raising medium-term execution risk.

Low return on equity

A low ROE of 3.25% indicates limited profitability relative to equity capital and suggests inefficient capital deployment. Over time, persistently low ROE can hinder the bank's ability to attract new equity, fund growth organically, and justify dividend payouts without improving asset returns or capital efficiency.

Tomato Bank, Ltd. Business Overview & Revenue Model

Company Description

Tomato Bank, Ltd. provides banking products and services for individual and corporate customers in Japan. It accepts saving, time, reserve, and foreign currency deposits, as well as provides loan products, such as card, housing, remodeling, free, car, education, and other loans. The company also offers debit and credit cards; life and non-life insurance products and services; and bonds. In addition, it provides pension, investment trust, electronic money charge, payment and transfer, safe deposit box, and Internet and mobile banking services. Further, the company provides consulting, business support, fund management, and ATM services. As of June 30, 2021, it operated a network of 61 branches. The company was formerly known as Sanyo Mutual Bank, Ltd. and changed its name to Tomato Bank, Ltd. in April 1989. Tomato Bank, Ltd. was incorporated in 1931 and is headquartered in Okayama, Japan.

How the Company Makes Money

Tomato Bank generates revenue through several key streams. Primarily, the bank earns interest income from loans issued to customers, which include personal loans, mortgages, and business financing. This interest represents a significant portion of the bank's earnings. Additionally, Tomato Bank collects fees for various services such as account maintenance, transaction fees, and advisory services, contributing to its non-interest income. The bank may also engage in investment activities, where it invests in securities and other financial instruments to generate additional returns. Strategic partnerships with local businesses and community organizations enhance its customer base, driving deposits and lending activity, which further supports the bank's revenue growth.

Tomato Bank, Ltd. Financial Statement Overview

Summary

Moderate fundamentals: profitability improved (net margin 7.33%, EBIT margin 11.09%) and leverage is reasonable (debt-to-equity 0.72), but revenue declined (-7.65%) and cash flow history shows prior operating cash flow weakness despite a strong current OCF-to-net income ratio (2.97).

Income Statement

Tomato Bank, Ltd. shows a mixed performance in its income statement. The net profit margin has improved to 7.33% in the latest year, indicating better profitability. However, the revenue growth rate has declined by 7.65%, which is a concern. The EBIT margin is stable at 11.09%, suggesting efficient operations, but the EBITDA margin has decreased, indicating potential cost pressures.

Balance Sheet

The balance sheet reflects a moderate financial position. The debt-to-equity ratio has improved to 0.72, showing a reduction in leverage. Return on equity is relatively low at 3.25%, indicating limited profitability from equity. The equity ratio is stable, suggesting a balanced asset structure.

Cash Flow

Cash flow analysis reveals challenges. Although free cash flow has grown significantly, the operating cash flow to net income ratio is strong at 2.97, indicating good cash generation relative to earnings. However, past negative operating cash flows raise concerns about cash management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	23.49B	23.16B	21.55B	20.71B	20.41B	20.01B
Gross Profit	23.49B	22.21B	21.30B	20.29B	20.14B	19.57B
EBITDA	3.03B	3.33B	3.06B	3.50B	3.20B	2.97B
Net Income	1.52B	1.82B	1.53B	1.88B	1.66B	1.52B
Balance Sheet
Total Assets	1.38T	1.36T	1.34T	1.31T	1.40T	1.30T
Cash, Cash Equivalents and Short-Term Investments	0.00	108.83B	101.97B	86.56B	196.34B	103.46B
Total Debt	40.03B	39.98B	39.34B	25.44B	120.55B	26.77B
Total Liabilities	1.32T	1.31T	1.29T	1.26T	1.35T	1.25T
Stockholders Equity	56.45B	55.86B	56.83B	54.20B	54.75B	51.81B
Cash Flow
Free Cash Flow	0.00	14.90B	-3.37B	-110.62B	90.10B	46.66B
Operating Cash Flow	0.00	15.32B	-3.02B	-110.25B	90.73B	47.32B
Investing Cash Flow	0.00	-26.13B	8.86B	2.06B	-13.00M	-10.85B
Financing Cash Flow	0.00	17.39B	17.55B	-828.00M	2.17B	-806.00M

Tomato Bank, Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1504.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8542, the sentiment is Positive. The current price of 1504 is below the 20-day moving average (MA) of 1747.75, below the 50-day MA of 1652.04, and above the 200-day MA of 1401.68, indicating a neutral trend. The MACD of -7.73 indicates Positive momentum. The RSI at 46.25 is Neutral, neither overbought nor oversold. The STOCH value of 37.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8542.

Tomato Bank, Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8349	72 Outperform	¥14.67B	9.31	―	3.58%	13.77%	19.08%
8537	72 Outperform	¥24.89B	7.08	―	3.50%	16.60%	-5.51%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8542	67 Neutral	¥19.06B	4.85	―	3.37%	3.70%	24.98%
8563	66 Neutral	¥13.83B	7.04	―	3.74%	5.91%	5.03%
8364	64 Neutral	¥32.05B	7.87	―	2.59%	4.90%	―
8383	64 Neutral	¥16.81B	4.33	―	3.30%	11.93%	36.32%