Starts Corporation Inc. (8850) AI Stock Analysis

• Market Cap: ¥262.19B
• Dividend Yield: 2.67%
• Average Volume (3M): 52.44K
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.64
• Revenue Growth: 2.29%
• EPS Growth: -4.12%
• Country: JP
• Employees: 4,672
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Diversified
• EPS (TTM): 145.57
• Shares Outstanding: 53,998,203
• 10 Day Avg. Volume: 58,690
• 30 Day Avg. Volume: 52,436
• PEG Ratio: 0.75
• Price to Book (P/B): 1.11
• Price to Sales (P/S): 0.83
• P/FCF Ratio: 10.46
• 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): 498.25
• Revenue Forecast (FY): ¥250.00B

• Rating: 75 Outperform
• Price Target: ¥5,704.00 ▲(20.59% Upside)
• Action: Upgraded Date: 02/11/26
• Date: Action: Upgraded 02/11/26

The score is driven primarily by solid profitability and improving leverage, but it is capped by materially weakened TTM cash flow conversion. Technicals add support with a clear uptrend and positive momentum, while valuation is favorable due to a low P/E and a moderate dividend yield.

Positive Factors

Profitability

Sustained mid-teens operating profitability and near-10% net margin indicate a durable ability to convert revenue into earnings. Over 2–6 months this supports reinvestment capacity and resilience to cyclical dips, underpinning stable cash earnings when operations are steady.

Improved Leverage

Lowered debt-to-equity versus prior year reduces refinancing and solvency risk for a capital-intensive real estate firm. Improved leverage boosts financial flexibility over the medium term, easing interest burden and supporting capacity for acquisitions or capex when opportunities arise.

Return on Equity

A consistent ~13% ROE implies efficient capital allocation and the business’s ability to generate attractive returns on invested equity. This enhances long-term shareholder value potential and signals disciplined asset management within the property portfolio.

Negative Factors

Weak Cash Conversion

A sharp drop in free cash flow and FCF covering only ~29% of net income materially weakens earnings quality and reduces internal funding for maintenance, distributions or growth. Over months this constrains discretionary investment and increases reliance on external financing.

Margin Pressure

Net margin erosion versus the annual figure suggests cost or mix headwinds that could persist. If margins do not recover, slower profit expansion relative to revenue will limit free cash flow recovery and compress reinvestment or payout capacity over the medium term.

Sector Sensitivity

As a diversified real estate owner, the company remains exposed to interest-rate moves and property valuation cycles despite improved leverage. Continued sensitivity elevates downside risk to cash flows and asset values, affecting financing costs and capital access over coming quarters.

Starts Corporation Inc. Business Overview & Revenue Model

Company Description

Starts Corporation Inc. engages in the construction, real estate management, and tenant recruitment businesses in Japan and internationally. It is involved in the design and construction management of seismic isolated buildings; and the provision of real estate brokerage services, including the sale of buildings, condominiums, and single-family houses, as well as CRE solutions and housing management services for corporate customers. The company also manages residential buildings, parking lots, office buildings, commercial facilities, etc.; develops card key/home security services; and offers asset management consulting and J-REIT management services, as well as undertakes urban redevelopment and PFI projects. In addition, it publishes lifestyle monthly and free magazines, and cellphone novels, as well as operates OZmall website; promotes events; develops hotels, Japanese inns, golf courses, etc.; and manages and operates approximately 100 nursing homes, elderly housing facilities, and licensed nursery schools. Further, the company provides elderly facility introduction and childcare support services; and sells and installs housing fixtures and fittings. Starts Corporation Inc. was founded in 1969 and is based in Tokyo, Japan.

How the Company Makes Money

Starts Corporation generates revenue through multiple streams including software licensing fees, subscription models for its cloud services, and project-based consulting fees. The company also earns income from long-term contracts with clients for ongoing IT support and system maintenance. Significant partnerships with major technology firms enhance its product offerings and expand its market reach, contributing to stable revenue growth. Additionally, the company invests in research and development to innovate its services, which helps attract new clients and retain existing ones.

Starts Corporation Inc. Financial Statement Overview

Summary

Profitability is solid with healthy margins (gross ~32.6%, EBIT ~14.3%, net ~9.7%) and improved leverage (debt-to-equity ~0.37) supporting ROE (~13%). The main drag is weak cash conversion: TTM free cash flow fell sharply (~-75%) and is only ~29% of net income, reducing earnings quality and flexibility.

Income Statement

TTM (Trailing-Twelve-Months) results show solid profitability with a gross margin of ~32.6% and net margin of ~9.7%, supported by healthy operating profitability (EBIT margin ~14.3%). Revenue growth in TTM is strong (~+1.7%), and margins have generally improved versus earlier years. The main weakness is that profitability is not expanding as fast as revenue—net margin is below the latest annual level (~10.4%), suggesting some pressure from costs or mix.

Balance Sheet

Leverage looks manageable: TTM debt-to-equity is ~0.37, improving from ~0.40 last year and well below the higher levels seen in prior years (~0.58–0.59). Equity has been building over time, and return on equity remains consistently strong around ~13% in TTM, indicating good capital efficiency. The key risk is inherent balance-sheet sensitivity typical for real estate businesses—debt is still meaningful in absolute terms, so performance can be more exposed to financing and asset-value cycles even with improved leverage.

Cash Flow

Cash generation is the weak spot in TTM (Trailing-Twelve-Months): operating cash flow is relatively low versus profits, and free cash flow dropped sharply (free cash flow down ~75% with free cash flow at ~29% of net income). This is a notable deterioration compared with the latest annual period, where free cash flow covered a much larger share of earnings. While this could reflect working-capital swings or investment timing, the current trajectory reduces near-term financial flexibility and makes earnings quality look less consistent.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	246.81B	232.98B	233.41B	233.87B	196.58B	198.96B
Gross Profit	80.37B	76.18B	73.52B	68.19B	60.08B	55.94B
EBITDA	42.20B	43.19B	39.87B	36.22B	31.24B	28.25B
Net Income	23.89B	24.27B	22.09B	20.22B	16.77B	15.60B
Balance Sheet
Total Assets	341.27B	333.65B	324.11B	293.10B	273.29B	259.04B
Cash, Cash Equivalents and Short-Term Investments	87.09B	99.08B	94.04B	85.22B	74.39B	72.65B
Total Debt	69.39B	69.65B	73.43B	65.65B	74.78B	69.76B
Total Liabilities	151.59B	155.40B	158.79B	148.02B	145.61B	137.07B
Stockholders Equity	185.94B	174.75B	162.16B	142.52B	126.06B	120.59B
Cash Flow
Free Cash Flow	3.42B	18.51B	7.86B	23.48B	7.09B	17.84B
Operating Cash Flow	11.83B	25.91B	25.73B	34.15B	24.95B	27.25B
Investing Cash Flow	-10.72B	-8.77B	-20.77B	-10.70B	-17.82B	-10.36B
Financing Cash Flow	-16.63B	-15.28B	3.03B	-12.95B	-5.96B	-4.87B

Starts Corporation Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4730.00
• 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:8850, the sentiment is Positive. The current price of 4730 is below the 20-day moving average (MA) of 5094.50, below the 50-day MA of 4947.20, and above the 200-day MA of 4718.70, indicating a bullish trend. The MACD of 99.52 indicates Negative momentum. The RSI at 69.96 is Neutral, neither overbought nor oversold. The STOCH value of 92.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:8850.

Starts Corporation Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8931	78 Outperform	¥19.39B	5.68	―	4.71%	10.42%	48.21%
8850	75 Outperform	¥262.19B	10.78	―	2.67%	2.29%	-4.12%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
3010	65 Neutral	¥45.15B	13.79	―	1.60%	116.30%	-0.08%
8923	64 Neutral	¥157.80B	10.84	14.95%	2.95%	17.74%	19.41%
8803	63 Neutral	¥175.29B	15.68	8.95%	3.39%	28.94%	109.35%
3475	54 Neutral	¥46.10B	29.21	―	3.75%	-8.66%	-53.57%

Starts Corporation Inc. Corporate Events

Starts Corporation Posts Higher Sales and Profits but Slight Dip in Nine-Month Net Income

Starts Corporation Inc. reported consolidated net sales of ¥181.4 billion for the nine months ended December 31, 2025, up 8.3% year on year, with operating profit rising 10.2% to ¥25.9 billion and ordinary profit up 10.6% to ¥27.5 billion. Profit attributable to owners of parent dipped 2.1% to ¥17.8 billion, but earnings per share still inched up to ¥370.53, while total assets and the equity ratio both improved, underscoring a stronger balance sheet.

Net assets climbed to ¥189.7 billion and the equity-to-asset ratio rose to 54.5%, reflecting continued capital accumulation and financial stability. The company maintained its dividend stance, paying an interim ¥65 per share and forecasting a full-year total of ¥130, while leaving its full-year outlook unchanged at ¥250 billion in sales and ¥23.5 billion in profit attributable to owners, implying modest growth in revenue but a slight earnings decline for shareholders.

The most recent analyst rating on (JP:8850) stock is a Buy with a Yen5700.00 price target. To see the full list of analyst forecasts on Starts Corporation Inc. stock, see the JP:8850 Stock Forecast page.

Starts Corp launches ¥4.1bn trust-type employee shareholding plan

Starts Corporation Inc. has approved the introduction of a trust-type Employee Shareholding Incentive Plan, branded E-Ship, to encourage employees participating in its employee shareholding association to acquire and hold company stock over the medium to long term. The initiative is designed both to align employees’ interests with corporate value growth and to support their asset formation as part of a broader welfare strategy.

Under the scheme, a dedicated E-Ship Trust will borrow up to ¥4.1 billion to buy Starts shares on the market, then sell them on an ongoing basis to the employee association over a five-year trust term. Any surplus generated by share sales will be distributed to eligible participants at the end of the term, while Starts will guarantee the trust’s borrowing and cover any deficit, underscoring its commitment to employee incentives and potentially tightening the link between staff engagement and shareholder returns.

The most recent analyst rating on (JP:8850) stock is a Buy with a Yen5700.00 price target. To see the full list of analyst forecasts on Starts Corporation Inc. stock, see the JP:8850 Stock Forecast page.