LEIFRAS Co., Ltd. Sponsored ADR (LFS) AI Stock Analysis

• Market Cap: $75.08M
• Dividend Yield: N/A
• Average Volume (3M): 3.17M
• Price to Earnings (P/E): 26.6
• Beta (1Y): -2.95
• Revenue Growth: 12.19%
• EPS Growth: 72.87%
• Country: US
• Employees: 999
• Sector: Communication Services
• Sector Strength: 97
• Industry: Education & Training Services
• EPS (TTM): N/A
• Shares Outstanding: 26,160,620
• 10 Day Avg. Volume: 9,323,467
• 30 Day Avg. Volume: 3,166,281
• PEG Ratio: 0.45
• Price to Book (P/B): 12.46
• Price to Sales (P/S): 1.26
• P/FCF Ratio: 74.98
• Enterprise Value/Market Cap: 136.98
• Enterprise Value/Revenue: 1.22
• Enterprise Value/Gross Profit: 4.33
• Enterprise Value/Ebitda: 22.68
• 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: 59 Neutral
• Price Target: $2.50 ▼(-12.89% Downside)
• Action: Reiterated Date: 01/27/26
• Date: Action: Reiterated 01/27/26

The score is primarily supported by strong revenue growth, improving profitability, and improved leverage management, but is held back by weak cash-flow conversion and a relatively high P/E valuation. Technical indicators are broadly neutral, adding neither strong support nor strong risk.

Positive Factors

Consistent Revenue Growth

Sequential double‑digit top‑line growth across 2023–2024 reflects sustained demand and successful go‑to‑market execution. Durable revenue expansion supports scale economies, funds R&D and distribution, and provides a base for multi‑year margin improvement and investment plans.

Improving Profitability

Rising gross and net margins indicate better cost management and pricing power, supporting lasting profitability gains. Improved margins create persistent cash-generating capacity, enhance reinvestment potential for products and services, and strengthen competitive positioning.

Diversified Revenue Model & Partnerships

Multiple income streams—hardware sales, recurring subscriptions, licensing—and established retailer/e‑commerce partnerships diversify risk and stabilize cash flows. Recurring revenue and channel partnerships improve predictability and distribution scale over the medium term.

Negative Factors

Weak Cash Flow Conversion

A sharp drop in free cash flow growth and very low operating cash flow versus net income signals weakening conversion of accounting profits into cash. This constrains internal funding for capex, R&D, debt paydown or shareholder returns and raises refinancing risk if persistent.

Higher Reliance on Debt / Low Equity Ratio

Although leverage has improved, the company still shows a relatively low equity base and historical high leverage. Continued dependence on debt reduces financial flexibility, increases interest and refinancing exposure, and heightens vulnerability to market shocks.

Moderate Operating Margins

Modest EBIT/EBITDA margins limit buffer for competitive pricing, higher input costs, or increased SG&A as the business scales. Structural margin constraints reduce free cash flow upside and require sustained efficiency or higher‑margin mix shifts to materially improve long‑term returns.

LEIFRAS Co., Ltd. Sponsored ADR Business Overview & Revenue Model

Company Description

A sports and social business company in Japan. It operates children’s sports schools and organizes sports events, and also has social business activities in community engagement.

How the Company Makes Money

LEIFRAS generates revenue through multiple streams, including the sale of consumer electronics, subscription services for its software applications, and licensing fees from its technology solutions. The company has established significant partnerships with leading retailers and e-commerce platforms, which facilitate its product distribution and expand its market reach. Additionally, LEIFRAS leverages its research and development capabilities to continuously innovate, allowing it to maintain a competitive edge and attract a loyal customer base. The combination of direct sales, subscription models, and strategic partnerships contributes significantly to the company's overall earnings.

LEIFRAS Co., Ltd. Sponsored ADR Financial Statement Overview

Summary

Income statement strength (78) shows solid revenue growth and improving margins, and the balance sheet (65) reflects better leverage with strong ROE. However, cash flow is weaker (55) with a sharp free cash flow growth decline and low operating cash flow vs. net income, which tempers overall quality.

Income Statement

LEIFRAS Co., Ltd. shows strong revenue growth with a 10.24% increase in 2024, following a 21.01% rise in 2023. Gross profit margin improved to 28.54% in 2024, indicating better cost management. Net profit margin also increased to 4.05%, reflecting enhanced profitability. However, the EBIT and EBITDA margins, while improving, remain moderate at 5.37% and 6.55%, respectively, suggesting room for operational efficiency improvements.

Balance Sheet

The company's debt-to-equity ratio improved significantly from 4.29 in 2022 to 1.67 in 2024, indicating better leverage management. Return on equity remains strong at 40.22%, showcasing effective use of equity to generate profits. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing, which could pose risks if not managed carefully.

Cash Flow

LEIFRAS Co., Ltd. experienced a significant decline in free cash flow growth by 74.30% in 2024, indicating potential cash flow challenges. The operating cash flow to net income ratio decreased to 0.07, suggesting weaker cash generation relative to net income. However, the free cash flow to net income ratio remains healthy at 0.84, indicating that the company is still generating sufficient cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022
Income Statement
Total Revenue	8.42B	10.33B	9.30B	7.69B
Gross Profit	2.37B	2.95B	2.34B	1.96B
EBITDA	453.55M	676.49M	516.40M	358.70M
Net Income	227.45M	418.63M	245.34M	178.03M
Balance Sheet
Total Assets	4.78B	4.50B	4.38B	3.52B
Cash, Cash Equivalents and Short-Term Investments	2.44B	2.54B	2.73B	2.08B
Total Debt	1.71B	1.73B	1.87B	1.80B
Total Liabilities	3.48B	3.45B	3.76B	3.10B
Stockholders Equity	1.30B	1.04B	622.23M	420.28M
Cash Flow
Free Cash Flow	277.26M	172.98M	673.16M	377.55M
Operating Cash Flow	319.35M	207.11M	677.94M	401.50M
Investing Cash Flow	-47.36M	-51.39M	-4.78M	66.04M
Financing Cash Flow	-372.13M	-346.45M	-20.98M	404.37M

LEIFRAS Co., Ltd. Sponsored ADR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STG	68 Neutral	$58.40M	1.18	51.70%	―	-0.84%	-11.01%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
LFS	59 Neutral	$75.08M	26.64	49.19%	―	12.19%	72.87%
RYET	48 Neutral	$33.75M	―	―	―	―	―
YQ	41 Neutral	$31.50M	-1.39	-44.00%	―	-48.17%	35.62%
GNS	40 Underperform	$32.22M	-0.65	-62.24%	―	-64.39%	-305.82%