Subaru Co., Ltd. (9778) AI Stock Analysis

• Market Cap: ¥3.37B
• Dividend Yield: 1.95%
• Average Volume (3M): 363.00
• Price to Earnings (P/E): 55.4
• Beta (1Y): 0.28
• Revenue Growth: -3.28%
• EPS Growth: 38.72%
• Country: JP
• Employees: 328
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 205.00
• Shares Outstanding: 693,576
• 10 Day Avg. Volume: 340
• 30 Day Avg. Volume: 363
• PEG Ratio: 1.20
• Price to Book (P/B): 1.18
• Price to Sales (P/S): 1.22
• P/FCF Ratio: 45.31
• 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: ¥3,400.00
• Price Target Upside: -46.79% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: ¥5,863.00 ▼(-8.25% Downside)
• Action: Reiterated Date: 09/26/25
• Date: Action: Reiterated 09/26/25

Subaru Co., Ltd.'s overall stock score is primarily influenced by its mixed financial performance and technical indicators. The company's financial stability is offset by challenges in revenue growth and cash flow management. Technical analysis suggests a neutral to slightly bearish outlook, with the stock trading below key moving averages. The high P/E ratio raises valuation concerns, despite a modest dividend yield. The absence of earnings call data and corporate events limits further insights.

Positive Factors

Brand & Technology Moat

Subaru’s AWD platform and boxer-engine heritage provide durable product differentiation and brand loyalty. This niche positioning supports steady demand in cold/climate and outdoor segments, sustaining aftermarket sales and stable unit volumes across multi-quarter cycles.

Balance Sheet Strength

A moderate leverage profile and a 51.5% equity ratio give Subaru flexibility to fund R&D and product transitions while absorbing shocks. The improvement in ROE to 1.6% signals a positive return trajectory that supports sustainable capital allocation over the coming quarters.

Cash Generation Efficiency

An operating cash flow to net income ratio of 2.8 indicates strong cash conversion, enabling internal funding for capex, EV development, and working capital needs. Reliable cash conversion improves resilience and lowers near-term dependence on external financing.

Negative Factors

Revenue Decline & Inconsistency

Negative revenue growth (-2.3% in 2025 and Fundamentals -2.71%) reflects inconsistent demand and weakening top-line momentum. Prolonged revenue declines erode scale economics, reduce pricing leverage, and make it harder to restore margins and finance strategic initiatives internally.

Gross Margin Compression

A sustained drop in gross margin from 25.3% to 17.8% indicates structural cost or pricing pressure. Persistent margin erosion reduces operating leverage and free cash generation, limiting reinvestment capacity and weakening long-term profitability prospects.

Free Cash Flow Deterioration

A steep -47.5% decline in free cash flow signals weakened post-investment cash generation. Continued FCF deterioration undermines the company’s ability to self-fund EV transition, dividends, and working capital, increasing reliance on external financing or higher leverage.

Subaru Co., Ltd. Business Overview & Revenue Model

Company Description

Subaru Co., Ltd. provides learning and examination instruction services in Japan. The company offers elementary school, junior high school, middle school, high school, satellite preparatory school, and individualized instruction courses. It operates schools in Kagoshima, schools in Miyazaki, schools in Kumamoto, and schools in Fukuoka. The company was incorporated in 1959 and is headquartered in Kagoshima, Japan.

How the Company Makes Money

Subaru generates revenue primarily through the sale of vehicles, including passenger cars and SUVs, both in domestic and international markets. The company has a diversified revenue model that includes new vehicle sales, parts and service sales, and financing services. Key revenue streams include retail sales to consumers, fleet sales to businesses, and exports to various regions around the world. Additionally, Subaru has established partnerships with other automakers and suppliers, which can enhance its operational efficiency and broaden its market reach. The company's focus on developing eco-friendly technologies and electric vehicles also positions it to capitalize on the growing demand for sustainable transportation solutions.

Subaru Co., Ltd. Financial Statement Overview

Summary

Subaru Co., Ltd. presents a mixed financial outlook. While the company shows signs of recovering profitability and maintains a stable balance sheet, there are challenges in revenue growth and cash flow generation. The declining gross profit margin and inconsistent revenue growth suggest competitive pressures and operational challenges. Nonetheless, the manageable debt levels and improving return on equity reflect financial stability. The company needs to enhance its cash flow management to support sustainable growth and profitability in the Education & Training Services sector.

Income Statement

Subaru Co., Ltd. shows a moderate performance in its income statement. The gross profit margin has been under pressure, declining from 25.3% in 2020 to 17.8% in 2025. However, the net profit margin has improved in recent years, reaching 1.7% in 2025 from a negative margin in 2021, indicating a recovery in profitability. Revenue growth has been inconsistent, with a recent decline of -2.3% in 2025 compared to the previous year. The EBIT margin also decreased to 2.5% in 2025 from 10.1% in 2020. These factors suggest pressure on the company's pricing power and cost management.

Balance Sheet

The balance sheet reflects a stable financial structure for Subaru Co., Ltd. The debt-to-equity ratio remains manageable at approximately 0.47 in 2025, illustrating moderate leverage. The return on equity has improved to 1.6% in 2025, up from negative performance in 2021, indicating a positive trajectory in generating returns for shareholders. The equity ratio stands at 51.5% in 2025, suggesting a solid equity base relative to total assets. These indicators reflect stability, though there is room for improvement in improving returns.

Cash Flow

Subaru Co., Ltd.'s cash flow statement demonstrates some challenges. The free cash flow growth rate experienced a significant decline of -47.5% in 2025, reflecting pressures on operational efficiency and capital expenditures. The operating cash flow to net income ratio was strong at 2.8 in 2025, indicating efficient cash generation relative to income. However, the free cash flow to net income ratio fell to 1.6 in 2025, showing reduced free cash flow relative to net income. The company needs to focus on improving cash flow generation to support further growth.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	961.00K	3.45B	3.53B	3.51B	3.54B	3.67B
Gross Profit	244.00K	622.62M	707.48M	831.12M	894.53M	775.82M
EBITDA	103.72M	224.08M	266.33M	421.71M	439.01M	264.37M
Net Income	67.00M	57.90M	36.02M	217.98M	136.46M	-62.95M
Balance Sheet
Total Assets	6.77B	6.93B	7.12B	6.71B	6.72B	6.84B
Cash, Cash Equivalents and Short-Term Investments	683.08M	792.38M	963.28M	472.09M	689.43M	491.22M
Total Debt	1.73B	1.69B	1.83B	1.44B	1.53B	1.72B
Total Liabilities	3.35B	3.35B	3.48B	3.11B	3.27B	3.46B
Stockholders Equity	3.41B	3.57B	3.64B	3.60B	3.45B	3.38B
Cash Flow
Free Cash Flow	0.00	92.95M	177.18M	-16.08M	344.05M	215.10M
Operating Cash Flow	0.00	161.81M	281.20M	193.48M	415.16M	287.06M
Investing Cash Flow	0.00	-117.30M	-97.62M	-225.69M	53.33M	-99.14M
Financing Cash Flow	0.00	-232.19M	304.81M	-230.35M	-217.82M	-24.15M

Subaru Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6390.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9778, the sentiment is Negative. The current price of 6390 is above the 20-day moving average (MA) of 6094.55, above the 50-day MA of 6228.73, and below the 200-day MA of 6668.13, indicating a bearish trend. The MACD of -114.27 indicates Positive momentum. The RSI at 20.64 is Positive, neither overbought nor oversold. The STOCH value of 6.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:9778.

Subaru Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2179	74 Outperform	¥4.56B	9.30	―	2.60%	8.85%	-1.34%
2464	68 Neutral	¥4.86B	27.02	―	3.25%	3.46%	13.31%
7353	64 Neutral	¥3.96B	13.46	―	―	13.50%	-19.59%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
9778	55 Neutral	¥3.37B	55.43	―	1.95%	-3.28%	38.72%
6096	55 Neutral	¥2.84B	39.16	―	1.68%	-4.16%	―