REVOLUTION CO., LTD. (8894) AI Stock Analysis

• Market Cap: ¥7.06B
• Dividend Yield: N/A
• Average Volume (3M): 777.95K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.49
• Revenue Growth: 521.07%
• EPS Growth: -3637.52%
• Country: JP
• Employees: 56
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Services
• EPS (TTM): -3.49
• Shares Outstanding: 147,142,440
• 10 Day Avg. Volume: 671,950
• 30 Day Avg. Volume: 777,950
• PEG Ratio: <0.01
• Price to Book (P/B): 5.84
• Price to Sales (P/S): 0.20
• P/FCF Ratio: 125.17
• 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: 39 Underperform
• Price Target: ¥51.00 ▲(0.00% Upside)
• Action: Downgraded Date: 12/19/25
• Date: Action: Downgraded 12/19/25

The overall stock score is primarily driven by financial performance challenges, including high leverage and negative profitability. Technical indicators also suggest a bearish trend, while valuation metrics are poor due to ongoing losses. These factors collectively result in a low stock score.

Positive Factors

Revenue Growth (latest year)

Sustained high year-over-year top-line growth indicates the business is gaining customers or scaling offerings, creating room to leverage fixed costs. If maintained, this revenue expansion supports future operating leverage and provides a base for gradual margin recovery and reinvestment.

Multi-period Revenue Momentum

Very strong multi-period revenue growth suggests rapid market traction or a recent commercial inflection. Persistent momentum can help establish market position, enable pricing power, and create scale advantages that sustainably improve margins and competitive standing over months.

Positive Free Cash Flow Conversion

A positive free cash flow to net income ratio indicates the company is converting some earnings into discretionary cash. This structural ability to generate free cash, even if modest, provides a base to service obligations, fund selective investments, and reduce reliance on external financing over the medium term.

Negative Factors

High Leverage

An extremely high debt-to-equity ratio materially raises refinancing and interest risk, constrains capital allocation, and amplifies earnings volatility. Over 2–6 months, heavy leverage limits strategic flexibility and increases probability that growth must be funded by costly debt or equity dilution.

Negative Profitability

Deep negative margins reflect structural cost or pricing issues that hamper sustainable profitability. Persistent operating losses reduce retained earnings, weaken investor confidence, and make it harder to self-fund growth or service debt, elevating long-term solvency and viability risks.

Weak Operating Cash Conversion

Extremely poor conversion of earnings into operating cash signals liquidity stress and potential dependence on external financing. This weak cash generation undermines the company's ability to fund operations, invest in growth, or reduce leverage, making the capital structure fragile over time.

REVOLUTION CO., LTD. Business Overview & Revenue Model

Company Description

Revolution Co., Ltd. engages in the real estate resale business in Japan. The company operates through three segments: Real Estate Business, Investment Business, and Finance Business. The Real Estate Business segment offers real estate sales and brokerage services, as well as manages general rental properties. The Investment Business segment invests in SPCs, domestic, and foreign companies, as well as financial products, such as securities. The Finance Business segment operates a wholesale financial business that offers back financing funds to lenders who handle real estate-backed loans. The company is also involved in the asset management, rental, and metropolitan property buying and selling businesses. The company was formerly known as Harakosan Co., Ltd. and changed its name to Revolution Co., Ltd. in November 2019. Revolution Co., Ltd. was founded in 1986 and is headquartered in Tokyo, Japan. Revolution Co., Ltd. operates as a subsidiary of FO1 LLC.

How the Company Makes Money

REVOLUTION CO., LTD. generates revenue through multiple streams, primarily by selling software licenses and subscriptions for its proprietary applications. The company also earns income from providing consulting services related to digital transformation and data analytics, where it partners with organizations to implement its solutions effectively. Additionally, REVOLUTION CO., LTD. has established strategic partnerships with other technology firms, which allow it to expand its service offerings and reach new markets. The combination of direct sales, subscription models, and consulting services contributes significantly to the company's overall earnings.

REVOLUTION CO., LTD. Financial Statement Overview

Summary

Despite strong revenue growth, the company faces significant profitability and leverage issues. High debt levels and negative profitability margins pose substantial risks, while cash flow generation remains weak.

Income Statement

The company has shown significant revenue growth of 78.04% in the latest year, indicating strong top-line expansion. However, profitability metrics are concerning, with a negative net profit margin of -49.85% and negative EBIT and EBITDA margins, reflecting operational challenges and inefficiencies.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 9.98, indicating significant leverage and potential financial risk. The return on equity is negative, suggesting that the company is not generating sufficient returns on shareholder investments. The equity ratio is low, highlighting a reliance on debt financing.

Cash Flow

The cash flow statement shows a weak operating cash flow to net income ratio of 0.0057, indicating poor cash generation relative to earnings. Free cash flow to net income is moderately positive at 0.28, but overall cash flow metrics suggest liquidity challenges.

Breakdown	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	34.57B	5.57B	2.40B	2.03B	1.09B
Gross Profit	829.87M	1.02B	305.70M	541.71M	542.43M
EBITDA	-16.18B	401.19M	-355.39M	55.79M	296.39M
Net Income	-17.23B	296.01M	-372.67M	3.03M	254.44M
Balance Sheet
Total Assets	46.80B	51.63B	1.95B	3.60B	2.20B
Cash, Cash Equivalents and Short-Term Investments	2.78B	3.35B	1.09B	1.67B	743.43M
Total Debt	11.69B	3.62B	397.15M	1.40B	186.07M
Total Liabilities	45.29B	32.57B	660.62M	1.92B	540.64M
Stockholders Equity	1.17B	18.47B	1.29B	1.68B	1.66B
Cash Flow
Free Cash Flow	54.68M	1.03B	585.00M	-724.11M	133.75M
Operating Cash Flow	197.66M	1.05B	610.00M	-712.35M	149.36M
Investing Cash Flow	-8.75B	1.46B	87.07M	-43.93M	102.86M
Financing Cash Flow	8.02B	-39.26M	-1.07B	1.21B	-3.47M

REVOLUTION CO., LTD. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 51.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:8894, the sentiment is Negative. The current price of 51 is below the 20-day moving average (MA) of 51.55, below the 50-day MA of 52.36, and below the 200-day MA of 62.58, indicating a bearish trend. The MACD of -1.56 indicates Positive momentum. The RSI at 33.28 is Neutral, neither overbought nor oversold. The STOCH value of 16.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:8894.

REVOLUTION CO., LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2993	74 Outperform	¥11.23B	5.35	―	4.08%	7.75%	56.88%
5533	74 Outperform	¥7.29B	10.46	―	3.61%	9.43%	6.79%
8891	74 Outperform	¥8.13B	5.70	―	2.98%	-0.96%	-7.88%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
8938	46 Neutral	¥2.76B	-7.38	―	0.46%	7.33%	-282.83%
2978	45 Neutral	¥5.07B	39.91	―	―	57.41%	-9.29%
8894	39 Underperform	¥7.06B	-0.32	―	―	521.07%	-3637.52%