Leopalace21 (8848) AI Stock Analysis

• Market Cap: ¥232.55B
• Dividend Yield: 1.49%
• Average Volume (3M): 1.78M
• Price to Earnings (P/E): 19.5
• Beta (1Y): 0.85
• Revenue Growth: 2.50%
• EPS Growth: -71.61%
• Country: JP
• Employees: 3,853
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Services
• EPS (TTM): 16.28
• Shares Outstanding: 334,415,680
• 10 Day Avg. Volume: 2,311,830
• 30 Day Avg. Volume: 1,784,760
• PEG Ratio: -0.18
• Price to Book (P/B): 2.27
• Price to Sales (P/S): 0.43
• P/FCF Ratio: 7.26
• 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): 40.4
• Revenue Forecast (FY): ¥444.40B

• Rating: 58 Neutral
• Price Target: ¥774.00 ▲(16.92% Upside)
• Action: Reiterated Date: 10/11/25
• Date: Action: Reiterated 10/11/25

Leopalace21's overall stock score reflects a solid financial recovery, but is tempered by bearish technical indicators and a moderate valuation. The company's improved financial performance is a positive sign, but technical analysis suggests caution due to potential downward momentum. The valuation is reasonable, but not compelling enough to offset technical concerns.

Positive Factors

Stronger Equity Base

A restored equity base and improved equity ratio materially strengthen Leopalace21's financial runway. Better equity reduces refinancing pressure, increases creditor confidence, and provides a durable buffer to absorb cyclical rental volatility while enabling strategic investment or cautious M&A over the next several quarters.

Improved Cash Generation

Consistent free cash flow and stronger operating cash conversion enhance the company's ability to fund maintenance capex, service debt, and support dividends without relying on equity raises. This cash resilience sustains core rental operations and underwriting of new leases in medium term scenarios.

Revenue and Margin Recovery

Rising revenue alongside improved gross and net margins indicates better pricing, occupancy management, and cost control in rental and management segments. Durable margin expansion supports sustainable operating profitability and cash flow generation beyond transient demand cycles.

Negative Factors

High Liabilities

Persistently elevated liabilities leave Leopalace21 exposed to interest rate and refinancing risks. If occupancy or rent growth slows, high fixed obligations could strain cash flow and limit discretionary spending on maintenance or growth, reducing operational flexibility over coming quarters.

Earnings Volatility

Material swings in net income suggest earnings are sensitive to cyclical factors or one-off items. Such volatility undermines predictability for capital allocation, makes multi-period planning harder, and can pressure margins or cash buffers if adverse trends persist.

Modest Top-line Growth and EPS Drag

Slow revenue growth combined with steep negative EPS growth historically limits internal funding for expansion and weakens investor confidence in earnings quality. Over a medium horizon this constrains capacity to scale leasing operations or invest in property upgrades without external financing.

Leopalace21 Business Overview & Revenue Model

Company Description

Leopalace21 Corporation, together with its subsidiaries, engages in the construction, leasing, and sale of apartments, condominiums, and residential housing in Japan. It operates in three segments: Leasing Business; Elderly Care Business; and Other Businesses. The Leasing Business segment engages in the leasing and management of apartment buildings and other properties; repair work; broadband internet service; rent obligation guarantee; and company residence agency, solar power generation, and small-amount short-term insurance and other businesses. It also engages in real estate brokerage, running serviced apartments and serviced offices, and others. The Elderly Care Business segment operates elderly care facilities under the Azumi En brand. This segment also offers group homes, day services, short-stay, elderly homes with nursing care services/residential style elderly homes, home visits, and home care support services. The Other Businesses segment engages in the operation of resort facilities in Guam; and financing and other businesses. The company was formerly known as MDI Corporation and changed its name to Leopalace21 Corporation in July 2000. Leopalace21 Corporation was incorporated in 1973 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Leopalace21 generates revenue primarily through its rental business, which includes leasing out apartments and residential properties. The company earns income from monthly rents paid by tenants, as well as from property management fees. Additionally, Leopalace21 has a construction division that builds prefabricated homes, contributing to its revenue through sales and construction contracts. The company also engages in real estate brokerage activities, earning commissions on property transactions. Strategic partnerships with various stakeholders in the real estate market, including financial institutions and local governments, further support its revenue generation. The company's ability to adapt to market trends and consumer demands is crucial for maintaining and increasing its earnings.

Leopalace21 Financial Statement Overview

Summary

Leopalace21 demonstrates a solid financial recovery with improved profitability and cash flow. The company has effectively managed its leverage, reflected in a healthier balance sheet. Continued growth in revenue and profitability will be crucial to sustain this positive trajectory, as high liabilities and past earnings volatility remain areas to monitor.

Income Statement

Leopalace21 shows a strong recovery in its income statement, with a notable increase in revenue from 398.4 billion JPY in 2022 to 431.8 billion JPY in 2025. The gross profit margin has improved significantly, reflecting enhanced cost management. Net profit margin also shows strong recovery, moving from losses in past years to a positive margin of 4.1% in 2025. However, the sharp decline in net income from 2024 to 2025 indicates potential volatility.

Balance Sheet

The balance sheet reflects a stable recovery in stockholders' equity, increasing from negative figures in 2021 to 81.7 billion JPY in 2025. The debt-to-equity ratio has improved, indicating manageable leverage, although total liabilities remain high. The equity ratio shows a strong improvement, suggesting enhanced financial stability. However, the relatively high level of liabilities could pose risks if revenue growth falters.

Cash Flow

The cash flow statement indicates strong free cash flow generation, with positive growth in free cash flow from 2022 to 2025. Operating cash flow has improved significantly, showing better operational efficiency. The free cash flow to net income ratio is healthy, indicating efficient cash conversion. However, fluctuations in financing and investing cash flows suggest ongoing adjustments in capital structure.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	434.63B	431.83B	422.67B	406.45B	398.37B	408.96B
Gross Profit	80.95B	77.29B	68.83B	53.29B	46.08B	21.09B
EBITDA	34.93B	32.73B	27.97B	16.46B	11.13B	-18.76B
Net Income	8.62B	17.86B	42.06B	19.81B	11.85B	-23.68B
Balance Sheet
Total Assets	229.05B	216.63B	205.00B	166.55B	145.43B	161.71B
Cash, Cash Equivalents and Short-Term Investments	105.56B	88.51B	68.63B	53.56B	45.72B	54.96B
Total Debt	31.53B	31.63B	30.88B	31.85B	33.04B	35.41B
Total Liabilities	124.90B	128.35B	133.32B	133.63B	134.40B	158.43B
Stockholders Equity	98.19B	81.66B	64.15B	24.40B	1.43B	-8.11B
Cash Flow
Free Cash Flow	24.51B	25.56B	21.10B	9.94B	-5.95B	-43.65B
Operating Cash Flow	24.85B	25.90B	21.42B	10.54B	-4.46B	-40.82B
Investing Cash Flow	-604.00M	-604.00M	851.00M	906.00M	886.00M	11.83B
Financing Cash Flow	-6.40B	-6.40B	-7.12B	-2.82B	-5.89B	23.57B

Leopalace21 Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 662.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8848, the sentiment is Positive. The current price of 662 is below the 20-day moving average (MA) of 716.25, below the 50-day MA of 691.98, and below the 200-day MA of 671.26, indicating a bullish trend. The MACD of 12.11 indicates Negative momentum. The RSI at 65.15 is Neutral, neither overbought nor oversold. The STOCH value of 91.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8848.

Leopalace21 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8804	78 Outperform	$892.50B	15.45	10.73%	2.94%	-19.09%	16.31%
8934	73 Outperform	¥134.64B	8.22	17.98%	2.93%	84.20%	137.87%
8830	73 Outperform	¥4.99T	22.46	8.82%	0.97%	0.49%	12.19%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
3003	65 Neutral	¥1.56T	13.75	12.91%	3.25%	45.15%	19.80%
8848	58 Neutral	¥232.55B	19.49	22.14%	1.49%	2.50%	-71.61%
3231	57 Neutral	¥1.05T	18.02	8.38%	3.68%	3.52%	-17.58%

Leopalace21 Corporate Events

Leopalace21 Outperforms Plan With Strong Q3 FY2026 Earnings

Leopalace21 reported strong financial results for the first nine months of the fiscal year ending March 31, 2026, with net sales of JPY332.7 billion, operating profit of JPY28.6 billion, recurring profit of JPY27.8 billion, and net income of JPY10.0 billion. These figures exceeded the company’s internal plan across all major profit lines, underscoring solid performance in its Leasing and Development businesses and suggesting a favorable trajectory for profitability and operational stability.

Management highlighted that both leasing operations and development activities contributed to the upside versus plan, indicating resilient demand for the company’s rental housing and related services. The stronger-than-expected results may enhance Leopalace21’s financial flexibility and support its competitive position in Japan’s rental housing market, with positive implications for stakeholders monitoring its ongoing business recovery and growth prospects.

The most recent analyst rating on (JP:8848) stock is a Hold with a Yen786.00 price target. To see the full list of analyst forecasts on Leopalace21 stock, see the JP:8848 Stock Forecast page.

Leopalace21 Posts Higher Sales and Profit but Lower Net Income, Keeps Full-Year Outlook Intact

Leopalace21 reported net sales of ¥332.7 billion for the nine months ended December 31, 2025, up 2.7% year on year, with operating profit rising 12.5% and recurring profit up 11.8%, while net income attributable to shareholders fell 34.9% to ¥10.0 billion as comprehensive income also declined. The company’s equity ratio dropped sharply to 20.6% from 37.5% at the last fiscal year-end amid a reduction in total assets and net assets, but management kept its full-year earnings and dividend forecasts unchanged, signaling confidence in achieving modest sales and profit growth despite weaker earnings per share and a rising treasury stock balance.

For the fiscal year ending March 31, 2026, Leopalace21 projects net sales of ¥444.1 billion and operating profit of ¥34.8 billion, representing 2.8% and 19.1% growth, respectively, although full-year net income is expected to decline 27.2% to ¥13.0 billion. The company plans to maintain an annual dividend of ¥10.00 per share, suggesting a continued focus on shareholder returns even as capital structure indicators soften, a stance that will be closely watched by investors assessing its financial resilience and long-term strategy.

The most recent analyst rating on (JP:8848) stock is a Hold with a Yen778.00 price target. To see the full list of analyst forecasts on Leopalace21 stock, see the JP:8848 Stock Forecast page.

Leopalace21 Refinances ¥30 Billion Loan with Mizuho, Adds Profit and Leverage Covenants

Leopalace21 has agreed a new ¥30 billion term loan with Mizuho Bank to refinance an existing borrowing of the same amount, aiming to strengthen its financial base through revised terms and conditions. The unsecured facility, running from February 2026 to February 2029 at JPY Tibor plus 1.10%, includes financial covenants requiring non-negative operating and recurring profits and a net debt-to-EBITDA ratio not exceeding five times, with management expecting only minimal impact on current-year earnings and a roughly ¥0.7 billion reduction in interest expenses next fiscal year versus extending the prior loan.

The new loan with Mizuho Bank tightens Leopalace21’s financial discipline by embedding performance-linked covenants that effectively commit the company to maintain profitability and leverage within defined limits. This refinancing is set to modestly lower funding costs while signalling to stakeholders, including creditors and shareholders, that the company is prioritizing balance sheet resilience and more sustainable long-term financing terms.

The most recent analyst rating on (JP:8848) stock is a Hold with a Yen778.00 price target. To see the full list of analyst forecasts on Leopalace21 stock, see the JP:8848 Stock Forecast page.

Leopalace21 Restructures Elderly Care Business via Company Split and Capital Increase

Leopalace21 will transfer the rights and obligations related to 22 fee-based nursing homes in its Elderly Care Business to its wholly owned subsidiary Azu Residence Co., Ltd. through a simplified absorption-type company split effective April 1, 2026, and will implement a capital increase at Azu Residence. This internal reorganization is designed to clarify management challenges in the Elderly Care Business and enable Azu Residence to improve profitability and operational efficiency, with the capital increase elevating Azu Residence to the status of a specified subsidiary while having no impact on Leopalace21’s own capital or requiring shareholder approval, and the company states it foresees no issues in meeting post-split obligations.

The most recent analyst rating on (JP:8848) stock is a Hold with a Yen704.00 price target. To see the full list of analyst forecasts on Leopalace21 stock, see the JP:8848 Stock Forecast page.