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

• Market Cap: ¥10.67B
• Dividend Yield: N/A
• Average Volume (3M): 1.84M
• Price to Earnings (P/E): 10.6
• Beta (1Y): 0.43
• 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: ¥44.00 ▼(-13.73% Downside)
• 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

The company recovered from multi-year losses to deliver materially higher margins in 2025. Sustained net and EBITDA margin expansion indicates improved operating discipline and pricing or mix benefits, supporting durable earnings power and internal reinvestment capacity.

Revenue growth

Organic revenue growth near 18% demonstrates recovering demand and expanding top-line scale in the lodging business. Durable revenue expansion helps spread fixed costs, supports margin sustainability, and underpins longer-term cash generation if demand trends persist.

Positive free cash flow

Turning free cash flow positive and higher operating cash flow signal improving cash generation after prior deficits. Persistent FCF provides the firm flexibility to pay down debt, fund maintenance capex, and invest in service quality—strengthening long-term financial resilience.

Negative Factors

Elevated leverage

Despite improvement, debt-to-equity near 1.6x signals meaningful reliance on external financing for a cyclical hospitality operator. Elevated leverage increases vulnerability to demand downturns, constrains strategic flexibility, and raises refinancing and interest-rate sensitivity risks over time.

Weak cash conversion

Operating cash flow remains low relative to reported income, implying earnings quality or working capital and capex needs that limit convertibility of profits into spendable cash. Persistently weak conversion can hinder debt reduction and capital investment plans.

Demand volatility exposure

Performance has shown sharp rebounds then moderation, reflecting sensitivity to tourism and corporate travel cycles. Structural exposure to cyclical demand increases revenue unpredictability and makes margins and cash flow more volatile across 2–6 month horizons and beyond.

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 Co., Ltd. primarily makes money by operating hotels and earning revenue from guest stays and on-property services. Key revenue streams typically include: (1) Room revenue: income from nightly room charges, including transient leisure/business stays and group bookings; details on mix or average rates are null. (2) Food & beverage (F&B): sales from restaurants, bars, and banquet/catering services operated within its hotels; specific venue portfolio and contribution are null. (3) Banquets, events, and meeting space: fees from weddings, conferences, and other events hosted at hotel facilities; property-level event capacity and utilization are null. (4) Ancillary services: other on-site income such as parking, amenities, and service fees where applicable; specific items are null. Earnings are influenced by occupancy, average daily rate (ADR), and demand conditions (tourism, corporate travel, local events), as well as cost control in hotel operations (labor, utilities, food costs). Information on significant partnerships (e.g., airline, OTA, loyalty, management contracts) and whether the company earns management/franchise fees versus owning/leasing properties is null.

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: Negative
• RSI: Neutral
• STOCH: Positive

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 44.20, above the 50-day MA of 49.08, and below the 200-day MA of 57.13, indicating a bearish trend. The MACD of -1.90 indicates Negative momentum. The RSI at 35.41 is Neutral, neither overbought nor oversold. The STOCH value of 11.11 is Positive, 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	¥21.56B	5.47	―	1.27%	12.08%	17.87%
4691	75 Outperform	¥16.37B	2.93	―	1.47%	19.31%	202.53%
9722	63 Neutral	¥120.23B	17.02	―	0.30%	10.26%	6.31%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
9704	61 Neutral	¥10.67B	10.59	32.34%	―	20.16%	1467.54%
9713	58 Neutral	¥14.57B	2.42	―	0.55%	35.22%	413.40%
9720	53 Neutral	¥6.50B	37.82	―	0.39%	10.52%	-31.01%