Sotetsu Holdings, Inc. (9003) AI Stock Analysis

• Market Cap: ¥255.82B
• Dividend Yield: 2.49%
• Average Volume (3M): 396.25K
• Price to Earnings (P/E): 13.2
• Beta (1Y): 0.37
• Revenue Growth: -1.07%
• EPS Growth: -10.05%
• Country: JP
• Employees: 5,075
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): 76.30
• Shares Outstanding: 98,145,490
• 10 Day Avg. Volume: 512,570
• 30 Day Avg. Volume: 396,250
• PEG Ratio: 0.24
• Price to Book (P/B): 1.18
• Price to Sales (P/S): 0.73
• P/FCF Ratio: -28.42
• 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: ¥2,654.00
• Price Target Upside: 2.43% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 68 Neutral
• Price Target: ¥2,654.00 ▲(2.43% Upside)

Sotetsu Holdings scores well due to stable financial performance and an attractive valuation. However, technical indicators warn of potential overbought conditions that could lead to a short-term price correction. The company's high leverage and fluctuating free cash flow highlight areas for improvement.

Sotetsu Holdings, Inc. Business Overview & Revenue Model

Company Description

Sotetsu Holdings, Inc. (9003) is a Japanese company primarily engaged in the railway and transportation sector. It operates through several segments including transportation, real estate, leisure, and retail. The company's core service is the operation of railway lines, providing commuter and freight transportation services. Besides its transportation services, Sotetsu Holdings is also involved in the development and management of real estate properties, as well as running various retail and leisure businesses.

How the Company Makes Money

Sotetsu Holdings, Inc. generates revenue through multiple streams, predominantly from its railway operations, which include passenger fares and freight charges. The transportation segment is the backbone of its revenue, with the company operating several railway lines that serve the Kanagawa Prefecture and the Tokyo Metropolitan area. Additionally, the company earns income from its real estate division through the development, leasing, and management of residential and commercial properties. The retail segment contributes to revenue through the operation of shops and department stores located in and around its railway stations. Leisure activities such as hotel management and other related services also add to the company's earnings. Strategic partnerships and collaborations with local governments and other transportation entities further enhance its revenue-generating capabilities.

Sotetsu Holdings, Inc. Financial Statement Overview

Summary

Sotetsu Holdings demonstrates solid growth and operational improvements, with consistent revenue and profit increases. However, the company faces challenges with high leverage and fluctuating free cash flow, which require strategic management. The financial health is stable, but focus on debt reduction and cash flow stability will be crucial for sustaining long-term growth.

Income Statement

Sotetsu Holdings has shown consistent revenue growth over the years, with an impressive increase from 216,684 million yen in 2022 to 292,178 million yen in 2025. The gross profit margin has improved, reflecting enhanced cost management and efficiency. EBIT and EBITDA margins have also shown positive trends, indicating better operational performance. However, the net profit margin, while improved, still suggests room for further enhancement in profitability.

Balance Sheet

The company's debt-to-equity ratio is relatively high, indicating significant leverage, which could pose financial risk if not managed carefully. However, the return on equity has shown improvement, which is a positive signal for shareholders. The equity ratio suggests a moderate level of financial stability, but the company should focus on reducing its debt burden to strengthen its balance sheet further.

Cash Flow

While operating cash flow has been strong, the company has experienced volatility in free cash flow, mainly due to substantial capital expenditures. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to reported earnings. However, the negative free cash flow to net income ratio in recent years highlights the impact of large capital investments, suggesting a need for cautious cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	286.26B	292.18B	270.04B	249.67B	216.68B	221.14B
Gross Profit	105.97B	108.52B	94.58B	73.83B	56.13B	51.89B
EBITDA	55.45B	58.58B	51.79B	37.03B	28.16B	11.85B
Net Income	19.23B	22.41B	16.08B	6.98B	1.85B	-13.06B
Balance Sheet
Total Assets	749.05B	757.26B	715.38B	646.95B	623.41B	619.41B
Cash, Cash Equivalents and Short-Term Investments	28.78B	31.58B	27.55B	20.16B	22.04B	23.68B
Total Debt	436.67B	432.92B	416.87B	373.32B	366.88B	358.88B
Total Liabilities	567.40B	575.18B	550.65B	501.16B	483.71B	480.10B
Stockholders Equity	181.56B	181.99B	164.65B	145.69B	139.63B	139.23B
Cash Flow
Free Cash Flow	0.00	-7.54B	-36.22B	4.39B	-23.32B	-42.58B
Operating Cash Flow	0.00	36.68B	20.55B	36.35B	23.75B	11.84B
Investing Cash Flow	0.00	-43.78B	-58.04B	-33.57B	-29.42B	-24.75B
Financing Cash Flow	0.00	5.24B	34.92B	-4.92B	3.89B	12.53B

Sotetsu Holdings, Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2591.00
• 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:9003, the sentiment is Neutral. The current price of 2591 is below the 20-day moving average (MA) of 2614.04, above the 50-day MA of 2554.25, and above the 200-day MA of 2331.80, indicating a neutral trend. The MACD of 20.32 indicates Positive momentum. The RSI at 48.76 is Neutral, neither overbought nor oversold. The STOCH value of 39.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:9003.

Sotetsu Holdings, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9048	72 Outperform	¥344.33B	10.12	―	2.17%	10.66%	23.01%
9041	70 Outperform	¥571.51B	12.76	8.41%	1.85%	6.01%	-11.07%
9008	70 Outperform	$436.70B	11.52	9.93%	2.67%	8.78%	16.87%
9003	68 Neutral	¥255.82B	13.22	―	2.49%	-1.07%	-10.05%
9045	68 Neutral	$331.90B	11.97	9.48%	1.23%	-3.86%	17.34%
9010	67 Neutral	¥133.39B	27.16	―	1.15%	1.32%	-1.75%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Sotetsu Holdings, Inc. Corporate Events

Sotetsu Holdings Announces Subsidiary Merger to Boost Hotel Operations

Sotetsu Holdings, Inc. announced a merger of its wholly owned subsidiaries, Sotetsu Hotel Management, Sotetsu Inn, and Sunroute, effective February 1, 2026. This strategic move aims to consolidate management resources, eliminate redundant operations, and enhance efficiency in the accommodation-only hotel business, positioning Sotetsu Hotel Management as the surviving entity.

Sotetsu Holdings Reports Decline in Q1 2025 Financial Results

Sotetsu Holdings, Inc. reported a decline in its financial performance for the three months ended June 30, 2025, with operating revenues down by 7.3% and a significant drop in profits compared to the previous year. Despite the decrease, the company maintains its dividend forecast for the fiscal year ending March 31, 2026, indicating a stable outlook for shareholders.

Sotetsu Holdings Completes Treasury Share Repurchase

Sotetsu Holdings, Inc. has completed the repurchase of 407,400 common shares at a total cost of 889,354,950 yen, as part of a resolution to acquire up to 2 million shares. This strategic move, executed through the Tokyo Stock Exchange, aims to optimize the company’s capital structure and potentially enhance shareholder value.

Sotetsu Holdings Proposes Amendments to Articles of Incorporation

Sotetsu Holdings, Inc. announced a proposal to amend its Articles of Incorporation, which will be presented at the upcoming General Meeting of Shareholders. The amendment aims to update the company’s corporate objectives to better align with its current business operations and clarify its enterprise content, potentially impacting its strategic direction and stakeholder interests.

Sotetsu Holdings Announces Executive Leadership Changes

Sotetsu Holdings, Inc. announced significant changes in its executive leadership, including the appointment of Takamasa Kato as the new Representative Director and President. These changes align with the company’s Seventh Medium-Term Management Plan, aiming to enhance growth and prepare for major developments such as the remodeling of Yokohama Station’s west exit. The restructuring reflects Sotetsu’s strategy to strengthen its group management system and pursue its long-term growth roadmap.

Sotetsu Holdings Clarifies Executive Personnel Report

Sotetsu Holdings Inc. addressed a report in the Kanagawa Shimbun regarding its executive personnel, clarifying that the information was not officially announced by the company. The Board of Directors is set to deliberate on executive personnel decisions, and the company plans to disclose outcomes promptly, highlighting its commitment to transparency.