Nagase Brothers, Inc. (9733) AI Stock Analysis

• Market Cap: ¥80.53B
• Dividend Yield: 3.98%
• Average Volume (3M): 13.19K
• Price to Earnings (P/E): 9.7
• Beta (1Y): 0.36
• Revenue Growth: 15.54%
• EPS Growth: 67.62%
• Country: JP
• Employees: 1,398
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 66.25
• Shares Outstanding: 30,445,227
• 10 Day Avg. Volume: 11,910
• 30 Day Avg. Volume: 13,190
• PEG Ratio: -0.99
• Price to Book (P/B): 1.54
• Price to Sales (P/S): 0.87
• P/FCF Ratio: 7.09
• 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): 151.9
• Revenue Forecast (FY): ¥65.20B

• Rating: 72 Outperform
• Price Target: ¥3,100.00 ▲(20.25% Upside)
• Action: Reiterated Date: 10/29/25
• Date: Action: Reiterated 10/29/25

Nagase Brothers, Inc. demonstrates strong financial performance with consistent revenue growth and robust cash flow generation. The technical analysis indicates a strong upward trend, though caution is advised due to overbought signals. The stock's valuation is attractive, supported by a reasonable P/E ratio and a high dividend yield. These factors collectively contribute to a solid overall stock score.

Positive Factors

Revenue Growth

Sustained revenue growth (4.28% latest year) signals durable demand for the company’s education services and supports predictable top-line cash flow. Over 2-6 months this trend underpins investment capacity, customer retention advantages, and incremental margin improvement potential.

Free Cash Flow Strength

A 238% increase in free cash flow materially boosts financial flexibility, enabling dividends, capex, and debt reduction without relying on external financing. Strong operating cash flow to net income (4.19x) indicates durable cash conversion and supports strategic investments over the medium term.

Operational Margin Stability

Stable gross and operating margins reflect effective cost control and operational efficiency in service delivery. This margin durability helps absorb demand fluctuations, supports reinvestment in curriculum and staff, and preserves competitive positioning across business cycles.

Negative Factors

Declining Return on Equity

ROE falling from 11.78% to 6.27% signals reduced capital efficiency and weaker returns to shareholders. Persistent ROE decline can constrain long-term dividend growth and suggests the company may be earning less on incremental equity, limiting value creation over multiple quarters.

Net Profit Margin Compression

Net margin compression from 4.91% to 3.54% indicates rising costs or pricing pressure that reduces conversion of revenue into earnings. If sustained, lower net margins will limit retained earnings for reinvestment, weaken resilience to downturns, and hamper long-term profitability improvements.

Moderate Leverage

A debt-to-equity ratio near 1 denotes meaningful financial leverage. While manageable now, this level increases fixed obligations and reduces flexibility for strategic moves or absorbing shocks. Higher leverage can pressure cash flow priorities if margins remain compressed.

Nagase Brothers, Inc. Business Overview & Revenue Model

Company Description

Nagase Brothers Inc. provides education services in Japan. It operates high schools, preparatory schools, junior high schools, business schools, elementary schools, and swimming schools; and offers entrance exam, online schools and english schools, as well as publishes reference books. Nagase Brothers Inc. was founded in 1971 and is headquartered in Musashino, Japan.

How the Company Makes Money

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Nagase Brothers, Inc. Financial Statement Overview

Summary

Nagase Brothers, Inc. exhibits consistent revenue growth and efficient operations, as reflected in stable margins. The balance sheet shows a balanced leverage position, but there are concerns regarding declining return on equity. The cash flow statement indicates strong cash generation and improved free cash flow, highlighting financial stability. Overall, the company is well-positioned in the Education & Training Services industry, with room for improved profitability.

Income Statement

Nagase Brothers, Inc. has shown consistent revenue growth over the years, with a revenue growth rate of 4.28% in the latest year. The gross profit margin stands at 24.97% for the most recent year, indicating efficient cost management. However, the net profit margin has decreased from 4.91% to 3.54%, reflecting challenges in converting revenue into profit. The EBIT and EBITDA margins are relatively stable, suggesting operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is 0.96, indicating a moderate level of leverage. The return on equity has decreased from 11.78% to 6.27%, reflecting lower returns for shareholders. However, the equity ratio has improved slightly to 34.59%, showing a stronger equity position relative to total assets.

Cash Flow

Nagase Brothers, Inc. has improved its free cash flow significantly, with a growth rate of 238.34% over the past year. The operating cash flow to net income ratio is strong at 4.19, demonstrating robust cash generation relative to net income. The free cash flow to net income ratio also improved, indicating enhanced cash efficiency.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	57.83B	55.26B	52.99B	52.35B	49.41B	45.85B
Gross Profit	14.93B	13.80B	13.72B	14.76B	15.27B	14.94B
EBITDA	8.59B	8.10B	7.58B	7.98B	7.87B	6.82B
Net Income	2.35B	1.96B	2.60B	4.00B	3.44B	2.43B
Balance Sheet
Total Assets	86.74B	90.11B	88.29B	78.10B	76.56B	71.71B
Cash, Cash Equivalents and Short-Term Investments	15.37B	18.57B	26.47B	19.53B	21.47B	21.87B
Total Debt	30.69B	30.06B	35.73B	26.28B	28.95B	27.97B
Total Liabilities	57.04B	58.93B	59.52B	51.66B	53.45B	51.11B
Stockholders Equity	29.69B	31.17B	28.77B	26.45B	23.11B	20.59B
Cash Flow
Free Cash Flow	0.00	6.75B	2.76B	2.93B	4.63B	5.64B
Operating Cash Flow	0.00	8.20B	4.10B	4.80B	5.79B	6.65B
Investing Cash Flow	0.00	-7.78B	-1.98B	-2.97B	-5.56B	-1.63B
Financing Cash Flow	0.00	-8.31B	4.75B	-3.82B	-720.00M	-210.00M

Nagase Brothers, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2578.00
• 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:9733, the sentiment is Positive. The current price of 2578 is below the 20-day moving average (MA) of 2764.10, below the 50-day MA of 2718.76, and above the 200-day MA of 2242.11, indicating a bullish trend. The MACD of 16.17 indicates Positive momentum. The RSI at 53.52 is Neutral, neither overbought nor oversold. The STOCH value of 71.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9733.

Nagase Brothers, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9470	75 Outperform	¥44.43B	28.75	―	2.28%	7.30%	60.93%
9733	72 Outperform	¥80.53B	9.73	―	3.98%	15.54%	67.62%
4714	71 Outperform	¥32.97B	14.97	―	5.00%	―	―
4718	70 Outperform	¥38.11B	18.91	―	2.56%	7.41%	22.70%
9795	70 Outperform	¥40.64B	8.14	―	3.55%	4.95%	9.43%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%