Lead Real Estate Co., Ltd. Sponsored ADR (LRE) AI Stock Analysis

• Market Cap: $20.87M
• Dividend Yield: 3.4%
• Average Volume (3M): 122.37K
• Price to Earnings (P/E): 3.7
• Beta (1Y): 0.79
• Revenue Growth: 0.11%
• EPS Growth: 39.20%
• Country: US
• Employees: 70
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Development
• EPS (TTM): N/A
• Shares Outstanding: 13,641,900
• 10 Day Avg. Volume: 106,657
• 30 Day Avg. Volume: 122,369
• PEG Ratio: -0.04
• Price to Book (P/B): 0.71
• Price to Sales (P/S): 0.20
• P/FCF Ratio: 4.67
• Enterprise Value/Market Cap: 712.19
• Enterprise Value/Revenue: 0.77
• Enterprise Value/Gross Profit: 4.48
• Enterprise Value/Ebitda: 14.03
• 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: 53 Neutral
• Price Target: $1.50 ▼(-6.25% Downside)

The score is held down primarily by weak financial performance, driven by the severe revenue decline, poor cash flow conversion, and high leverage risk. Valuation is a clear positive with a low P/E and dividend yield, but technical indicators are only neutral and do not offset the financial concerns.

Positive Factors

Diversified revenue streams

Lead's multi‑stream business model—property sales, leasing and management fees—reduces reliance on a single revenue source and smooths cash flows across development cycles. Strategic partnerships with governments and firms expand distribution and increase resilience over the medium term.

Higher‑margin hotel mix

The shift toward hotel operations and higher‑margin transactions lifted gross margins, indicating a structural improvement in portfolio mix. If sustained through strategic hotel expansion and international acquisitions, this can enhance long‑term earnings quality and profitability stability.

Experienced CFO hire

Hiring a seasoned finance executive signals a deliberate move to strengthen financial oversight, capital markets engagement and corporate planning. Durable governance and capital allocation improvements can reduce execution risk, improve funding access and support strategic growth initiatives.

Negative Factors

Severe revenue decline

A near‑100% revenue collapse is a structural red flag that erodes scale, operating leverage and stakeholder confidence. Restoring top‑line momentum is essential to fund operations and service debt; prolonged low revenue threatens the firm's ability to execute its strategy without external support.

High leverage

Elevated leverage magnifies cyclical exposure and increases interest and refinancing risk for a real estate developer. High debt constrains flexibility to pursue acquisitions or weather market downturns, and may necessitate asset sales or conservative capital management to preserve solvency over the medium term.

Weak cash conversion

Severely negative FCF growth and an OCF-to-net income ratio of zero show poor conversion of reported earnings into cash. Persistent weak cash generation limits reinvestment, debt servicing and dividend sustainability, increasing reliance on external financing and heightening execution risk.

Lead Real Estate Co., Ltd. Sponsored ADR Business Overview & Revenue Model

Company Description

Lead Real Estate Co., Ltd, together with its subsidiaries, develops and sells luxury residential properties. The company develops single-family homes and condominiums. It operates hotels in Tokyo and leases apartment building units in Japan and Dallas, Texas. The company was incorporated in 2001 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Lead Real Estate Co., Ltd. generates revenue through multiple streams, primarily from property sales, rental income, and property management fees. The company earns significant income by developing residential and commercial properties and then selling them to investors or end-users. Additionally, LRE leases properties to tenants, providing a steady cash flow through rental agreements. The company also offers property management services, charging fees for managing properties on behalf of owners. Strategic partnerships with local governments and other real estate firms enhance its market reach and operational efficiency, contributing to its overall earnings.

Lead Real Estate Co., Ltd. Sponsored ADR Financial Statement Overview

Summary

Lead Real Estate Co., Ltd. exhibits strong revenue growth and improving profitability, supported by a solid balance sheet with increasing equity. However, high leverage and negative free cash flow present potential risks. The company should focus on enhancing operational efficiencies and managing debt levels to sustain its growth trajectory and improve cash flow stability.

Income Statement

Lead Real Estate Co., Ltd. has demonstrated strong revenue growth over the years, with a significant increase from 2020 to 2024. The company maintains a healthy gross profit margin, indicating efficient cost management. Net profit margin has also improved, reflecting enhanced profitability. However, EBIT and EBITDA margins show room for improvement, suggesting potential operational efficiencies could be explored.

Balance Sheet

The company's balance sheet shows a robust equity growth, with stockholders' equity increasing significantly over the period. The debt-to-equity ratio is relatively high, indicating substantial leverage, which could pose risks if not managed properly. The equity ratio has improved, reflecting a stronger financial position. Overall, the balance sheet is stable but highlights the need for careful debt management.

Cash Flow

Cash flow analysis reveals a challenging scenario with negative free cash flow in recent years, although there is a positive trend in operating cash flow. The operating cash flow to net income ratio indicates that the company is generating cash effectively relative to its net income. However, the free cash flow to net income ratio suggests that capital expenditures are significantly impacting cash reserves, necessitating strategic financial planning.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	19.27B	125.93M	18.95B	17.44B	14.69B	11.26B
Gross Profit	3.32B	24.92M	2.95B	2.76B	2.44B	1.49B
EBITDA	1.06B	10.60M	1.08B	1.03B	904.86M	481.20M
Net Income	572.33M	5.66M	626.96M	611.92M	551.62M	279.49M
Balance Sheet
Total Assets	17.22B	142.77M	17.22B	15.82B	12.42B	9.41B
Cash, Cash Equivalents and Short-Term Investments	1.30B	18.39M	1.30B	786.37M	403.11M	480.32M
Total Debt	11.60B	90.06M	11.60B	11.37B	8.80B	5.93B
Total Liabilities	12.98B	107.94M	12.98B	13.07B	10.22B	7.77B
Stockholders Equity	4.24B	34.89M	4.24B	2.75B	2.21B	1.64B
Cash Flow
Free Cash Flow	-418.32M	5.29M	-655.96M	-2.36B	-3.47B	-414.89M
Operating Cash Flow	1.88B	22.14M	1.57B	-1.12B	-2.93B	-244.66M
Investing Cash Flow	-2.31B	-17.52M	-2.24B	-1.26B	-19.08M	-160.43M
Financing Cash Flow	995.96M	4.65M	1.18B	2.55B	2.85B	555.60M

Lead Real Estate Co., Ltd. Sponsored ADR Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.60
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LRE, the sentiment is Negative. The current price of 1.6 is above the 20-day moving average (MA) of 1.48, above the 50-day MA of 1.40, and above the 200-day MA of 1.52, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 46.04 is Neutral, neither overbought nor oversold. The STOCH value of 13.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LRE.

Lead Real Estate Co., Ltd. Sponsored ADR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AXR	67 Neutral	$113.53M	11.19	8.04%	―	-27.32%	-15.12%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
LRE	53 Neutral	$20.87M	3.69	18.83%	3.40%	0.11%	39.20%
ARL	53 Neutral	$263.60M	45.51	0.95%	―	-0.58%	―
AMBR	48 Neutral	$245.45M	-0.74	―	―	-75.38%	―

Lead Real Estate Co., Ltd. Sponsored ADR Corporate Events

Lead Real Estate Names Veteran Finance Executive Ken Takahashi as CFO to Support Next Growth Phase

On December 3, 2025, Lead Real Estate Co., Ltd. saw the resignation of Chief Financial Officer Daisuke Takahashi for personal reasons, with the company stating there were no disagreements related to operations, policies or practices. Effective January 1, 2026, the company appointed veteran finance executive Ken Takahashi as its new CFO, a move formally announced on January 6, 2026. Ken Takahashi brings extensive senior-level experience in financial management, accounting, capital markets and corporate strategy from roles at Fujimoto Holdings, PIP group companies, KPMG Peat Marwick, Nikko Group’s venture capital operations and Mirai Asset Management. Management has framed his appointment as a key step in strengthening financial oversight, capital markets engagement and corporate planning as the luxury real estate and extended-stay hotel operator enters its next phase of growth, signaling an intent to deepen financial discipline and enhance value creation for stakeholders.

The most recent analyst rating on (LRE) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Lead Real Estate Co., Ltd. Sponsored ADR stock, see the LRE Stock Forecast page.

Lead Real Estate Co., Ltd Reports Strong Fiscal Year 2025 Results

Lead Real Estate Co., Ltd announced its fiscal year 2025 results, highlighting a 35.1% increase in net income to JPY846.8 million. Despite a slight decline in total revenue to JPY18.8 billion, the company improved its gross margin to 19.8% due to a favorable sales mix and higher-margin hotel transactions. The company is strategically expanding its hotel operations and plans to acquire international properties, aiming for renewed revenue growth and enhanced profitability in fiscal 2026.

The most recent analyst rating on (LRE) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Lead Real Estate Co., Ltd. Sponsored ADR stock, see the LRE Stock Forecast page.