AGORA Hospitality Group Co., Ltd. (9704) AI Stock Analysis

• Market Cap: ¥11.43B
• Dividend Yield: N/A
• Average Volume (3M): 1.84M
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.38
• Revenue Growth: 20.16%
• EPS Growth: 1467.54%
• Country: JP
• Employees: 404
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): -0.61
• Shares Outstanding: 281,708,920
• 10 Day Avg. Volume: 2,687,830
• 30 Day Avg. Volume: 1,836,703
• PEG Ratio: 0.01
• Price to Book (P/B): 2.38
• Price to Sales (P/S): 1.36
• P/FCF Ratio: 41.16
• 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: 61 Neutral
• Price Target: ¥54.00 ▲(5.88% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven mainly by improving profitability and margins, but is held back by leverage and weak cash-flow conversion versus net income. Technical indicators are mildly negative/neutral, while valuation (P/E ~10.7) provides some support.

Positive Factors

Profitability Turnaround

A return to positive and materially higher net margins indicates the company has restored pricing power and/or cost control after prior losses. Sustained mid‑teens margin recovery supports durable earnings, stronger ROE (noted at ~22.5%) and capacity to reinvest in core hotel operations over the medium term.

Higher Operating Margins

An expanded EBITDA margin reflects improved operating leverage in its hotel operations, implying more of incremental revenue drops to the bottom line. If maintained, this margin base improves cash generation potential and resilience to modest revenue swings common in lodging.

Revenue Growth Momentum

Double‑digit revenue growth points to recovering demand across its accommodation and on‑property services. Given the business model earns recurring room, F&B and event revenues, sustained top‑line growth supports occupancy/ADR recovery and provides a structural tailwind for margins and cash flow over the next several quarters.

Negative Factors

Elevated Leverage

A debt-to-equity ratio near 1.6x shows meaningful reliance on external financing. In a cyclical lodging sector, this degree of leverage increases interest burden and reduces strategic flexibility, constraining ability to fund renovations, pursue acquisitions, or absorb demand shocks without raising cost of capital or restructuring.

Weak Cash Conversion

Operating cash flow materially lags reported profitability and free cash flow covers only ~43% of net income. Persistent weak cash conversion undermines earnings quality, limits internal funding for capex or debt reduction, and raises reliance on external financing even when net income looks healthy.

Revenue/Profit Volatility

Management’s performance has shown sharp rebounds and then more moderate growth, reflecting exposure to tourism and corporate travel cycles. This structural sensitivity means earnings and cash flow can reverse quickly if travel demand softens, complicating long‑term planning and capital allocation.

AGORA Hospitality Group Co., Ltd. Business Overview & Revenue Model

Company Description

AGORA Hospitality Group Co., Ltd operates in the hotel and property development activities in Japan. The company operates various hotels, including full service, limited service, resort, and traditional ryokans type hotels. It also provides hospitality management, operation and asset management, due diligence and renewal project, and repositioning and rebranding planning services. The company was formerly known as Tokai Kanko Co., Ltd. and changed its name to AGORA Hospitality Group Co., Ltd in April 2012. AGORA Hospitality Group Co., Ltd was founded in 1948 and is headquartered in Tokyo, Japan.

How the Company Makes Money

AGORA Hospitality Group generates revenue through multiple streams, primarily from the operation of its hotel and resort properties. Key revenue sources include room bookings, food and beverage sales, and ancillary services such as spa treatments and event hosting. The company also benefits from strategic partnerships with online travel agencies and corporate clients, which help drive occupancy rates and increase visibility. Additionally, AGORA may engage in franchise agreements, allowing it to earn royalties from properties that use its brand and operational standards, thereby diversifying its income sources. Seasonal promotions and loyalty programs further enhance revenue by attracting repeat customers and encouraging longer stays.

AGORA Hospitality Group Co., Ltd. Financial Statement Overview

Summary

Strong earnings recovery and margin expansion (net margin ~12.9% in 2025; EBITDA margin ~15.6%) support the score, but it is capped by still-elevated leverage (debt-to-equity ~1.57x) and weak cash conversion (operating cash flow ~20% of net income; free cash flow ~43% of net income) despite FCF turning positive.

Income Statement

The company shows a strong profitability turnaround: net income moved from losses in 2020–2023 to positive results in 2024 and a much stronger 2025, with net margin improving to ~12.9% in 2025 (vs ~1.3% in 2024). Operating performance also strengthened meaningfully, with EBITDA margin rising to ~15.6% and EBIT margin to ~9.0% in 2025, alongside steady gross margin (~33–34% in 2024–2025). The main offset is growth volatility—rapid rebounds earlier (2022–2023) followed by more moderate revenue growth in 2024–2025—suggesting performance may be sensitive to demand cycles typical of lodging.

Balance Sheet

Leverage remains a key constraint: debt-to-equity is still elevated at ~1.57x in 2025 (though improved from ~2.35x in 2024), indicating meaningful reliance on debt financing. A positive is that equity and returns strengthened sharply in 2025, with return on equity rising to ~22.5%, consistent with the earnings recovery. Overall, the balance sheet is improving, but the capital structure still carries above-average financial risk for a cyclical industry.

Cash Flow

Cash generation is improving but still lagging reported profitability. Operating cash flow increased to ~¥771M in 2025 and free cash flow turned positive (~¥328M) after large deficits in prior years (notably 2024). However, cash conversion is weak: operating cash flow covers only ~20% of net income in 2025, and free cash flow is only ~43% of net income, implying earnings quality and/or working-capital and investment needs remain a concern.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.34B	9.91B	8.38B	7.31B	4.95B	3.36B
Gross Profit	3.04B	3.33B	2.78B	1.99B	427.00M	254.83M
EBITDA	1.25B	1.54B	741.00M	486.20M	-613.74M	-1.12B
Net Income	258.93M	1.27B	108.07M	-149.51M	-1.30B	-1.68B
Balance Sheet
Total Assets	20.83B	20.99B	20.65B	18.23B	17.04B	16.66B
Cash, Cash Equivalents and Short-Term Investments	3.27B	3.66B	2.94B	3.12B	2.45B	2.45B
Total Debt	9.12B	8.91B	8.94B	7.68B	7.09B	6.80B
Total Liabilities	13.40B	12.14B	14.01B	12.89B	11.89B	10.57B
Stockholders Equity	4.48B	5.67B	3.80B	3.51B	3.63B	4.87B
Cash Flow
Free Cash Flow	0.00	327.76M	-2.28B	-806.37M	-523.16M	-517.36M
Operating Cash Flow	0.00	770.60M	435.00M	394.00M	240.76M	-373.36M
Investing Cash Flow	0.00	-596.85M	-2.63B	-617.31M	-763.92M	-4.15M
Financing Cash Flow	0.00	496.63M	2.10B	980.84M	647.56M	-21.47M

AGORA Hospitality Group Co., Ltd. Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9704, the sentiment is Negative. The current price of 51 is above the 20-day moving average (MA) of 49.45, above the 50-day MA of 50.78, and below the 200-day MA of 58.60, indicating a bearish trend. The MACD of -1.84 indicates Positive momentum. The RSI at 35.99 is Neutral, neither overbought nor oversold. The STOCH value of 37.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:9704.

AGORA Hospitality Group Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6565	80 Outperform	¥22.88B	7.62	―	1.27%	12.08%	17.87%
4691	75 Outperform	¥18.60B	5.60	―	1.47%	19.31%	202.53%
9722	63 Neutral	¥142.98B	15.19	―	0.30%	10.26%	6.31%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
9704	61 Neutral	¥11.43B	9.46	32.34%	―	20.16%	1467.54%
9713	58 Neutral	¥14.02B	8.29	―	0.55%	35.22%	413.40%
9720	53 Neutral	¥6.84B	34.65	―	0.39%	10.52%	-31.01%