Shiseido Company (SSDOY) AI Stock Analysis

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Shiseido Company

(OTC:SSDOY)

Rating:59Neutral

Price Target:

$18.00

▲(4.77%Upside)

The most significant factor influencing the score is the company's strong gross profit margin contrasted by its negative net income and declining operating margins, which signal profitability issues. The technical analysis indicates a short-term positive trend, which is a favorable factor. However, the negative P/E ratio and low dividend yield highlight valuation concerns.

Shiseido Company (SSDOY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$6.95B

Dividend Yield0.46%

Average Volume (3M)4.79K

Price to Earnings (P/E)527.8

Beta (1Y)0.31

Revenue Growth-6.59%

EPS Growth-137.03%

CountryUS

Employees27,908

SectorConsumer Defensive

Sector Strength69

IndustryHousehold & Personal Products

Share Statistics

EPS (TTM)0.06

Shares Outstanding400,000,000

10 Day Avg. Volume0

30 Day Avg. Volume4,794

Financial Highlights & Ratios

PEG Ratio-2.76

Price to Book (P/B)4.23

Price to Sales (P/S)0.00

P/FCF Ratio-131.29

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$11.90

Price Target Upside-30.73% Downside

Rating ConsensusModerate Sell

Number of Analyst Covering0

Shiseido Company Business Overview & Revenue Model

Company DescriptionShiseido Company, Limited engages in the production and sale of cosmetics in Japan and internationally. The company offers fragrances; makeup products; skincare and body care products; and hair care and styling products, as well as hair color and perm solutions for hair salons. It also engages in the restaurant and food, and retail businesses; and operates beauty salons. In addition, the company operates and supports SABFA, a professional hair makeup training school. It sells its products through department stores, specialty stores, and drug stores. The company was founded in 1872 and is headquartered in Tokyo, Japan.

How the Company Makes MoneyShiseido Company generates revenue primarily through the sale of its diverse beauty and personal care products across multiple global markets. The company's key revenue streams include skincare, makeup, fragrance, and hair care products, with skincare being the largest contributor. Shiseido's revenue model is supported by its extensive portfolio of brands, such as Shiseido, NARS, Clé de Peau Beauté, and Anessa, which target different market segments from mass market to luxury. The company also engages in strategic partnerships and collaborations to enhance its product offerings and expand its market presence. Additionally, Shiseido invests in research and development to continuously innovate and introduce new products that meet consumer demands and trends, further driving sales and profitability.

Shiseido Company Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q4-2024)

% Change Since: 0.64%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

The earnings call highlights several positive achievements, including exceeding profit forecasts and growth in key regions like Japan and EMEA. However, these are tempered by significant challenges such as a dividend reduction, net income deficit, and struggles in the Americas and China. The sentiment is balanced by the company's strategic focus on structural reforms, technological advancements, and new product launches.

Q4-2024 Updates

Positive Updates

Exceeded Core Operating Profit Forecast

Core operating profit for the full year was JPY 36.4 billion, surpassing the revised forecast of JPY 35 billion despite a challenging environment.

Significant Growth in Japan

Japan achieved JPY 28.1 billion in operating profit, significantly exceeding the target and showing 10% growth for 2 consecutive years.

Positive Growth in China and EMEA

For the first time in 5 quarters, sales in China increased. EMEA also reported steady growth with improved profitability through focused investments.

E-commerce Growth

E-commerce sales grew in the high 20% range due to brand expansion and increased digital advertising investments.

New Product Launches and Innovations

New products such as ELIXIR's Glow Serum and Shiseido's Foundation Serum drove sales, showcasing advanced technology.

Negative Updates

Reduction in Year-End Dividend

The company decided to reduce the year-end dividend from JPY 30 per share to JPY 10 per share to secure financial flexibility.

Net Income Deficit

Net income attributable to owners of the parent company was a deficit of JPY 10.8 billion due to structural reform expenses and provisions for financial expenses.

Challenges in the Americas

Sales in the Americas declined due to the delayed recovery of Drunk Elephant, and competition intensified, affecting the brand's performance.

Sluggish Consumer Spending in China and Travel Retail

Consumer spending remained sluggish in China and Travel Retail, leading to a revenue decline in these regions.

High SG&A Costs

SG&A costs remain high, and efforts are underway to reduce these costs to improve profitability.

Company Guidance

In the call, the company provided guidance for fiscal year 2025, projecting net sales of JPY 995 billion with a real growth rate of 4%, excluding foreign exchange fluctuations. They expect core operating income to reach JPY 36.5 billion, aiming for a further increase beyond this baseline. The company highlighted a strategic focus on achieving a core operating profit margin of 7% by 2026 through continuous structural reforms and investments in key brands. For 2024, core operating profit was JPY 36.4 billion, while net income was a deficit of JPY 10.8 billion, due to structural reform expenses. They anticipate significant profit growth in Japan and Americas, with a target of JPY 50 billion in Japan, supported by new product launches and organizational changes. The company aims to enhance their global earnings base by expanding structural reforms and optimizing costs, and they expect free cash flow to turn positive in 2025.

Shiseido Company Financial Statement Overview

Summary

Shiseido Company exhibits strong gross profit margins but faces profitability challenges due to a negative net income and declining EBIT and EBITDA margins. The balance sheet indicates increased leverage, posing financial risk, though the equity ratio is healthy. Cash flow issues, particularly negative free cash flow, highlight difficulties in converting profits to cash.

Income Statement

Positive

The gross profit margin is strong at approximately 76% for 2024, indicating efficient cost management. However, net profit margin is negative, signaling challenges in profitability. The revenue growth rate from 2023 to 2024 is modest at 1.8%, which shows limited top-line growth. EBIT and EBITDA margins have declined compared to the previous year, pointing to increased operational costs or reduced operating efficiency.

Balance Sheet

Neutral

The debt-to-equity ratio has increased to 0.57 in 2024, reflecting rising leverage which could pose higher financial risk. Return on Equity (ROE) is negative, indicating that the company is not generating profits from its equity base. However, the equity ratio stands at around 47.5%, suggesting a balanced asset structure despite the leverage concerns.

Cash Flow

Neutral

The free cash flow has turned negative in 2024, raising concerns about cash generation capability. Operating cash flow to net income ratio is favorable, indicating strong cash generation relative to accounting profits. However, the free cash flow to net income ratio is negative, highlighting challenges in converting profits to free cash.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
990.59B	973.04B	1.07T	1.04T	920.89B
	Gross Profit
753.19B	713.36B	744.16B	772.21B	682.49B
	EBIT
7.58B	28.13B	46.57B	60.76B	14.96B
	EBITDA
80.80B	92.23B	129.77B	130.61B	80.64B
	Net Income Common Stockholders
-10.81B	21.75B	34.20B	46.91B	-9.12B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
126.86B	126.64B	137.53B	172.06B	151.01B
	Total Assets
1.33T	1.26T	1.31T	1.18T	1.20T
	Total Debt
363.16B	280.98B	297.19B	190.98B	324.30B
	Net Debt
264.68B	176.30B	178.15B	18.93B	194.28B
	Total Liabilities
677.21B	615.11B	681.91B	611.93B	697.64B
	Stockholders Equity
632.47B	618.75B	604.26B	546.09B	485.69B
Cash Flow		Free Cash Flow
-2.31B	33.35B	-19.47B	30.43B	-9.44B
	Operating Cash Flow
48.40B	89.03B	46.73B	122.89B	64.05B
	Investing Cash Flow
-83.74B	-35.54B	-41.31B	63.74B	-70.08B
	Financing Cash Flow
23.36B	-75.64B	-52.42B	-176.22B	46.88B

Shiseido Company Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price17.18

Price Trends

50DMA

16.49

Positive

100DMA

17.19

Negative

200DMA

18.95

Negative

Market Momentum

MACD

0.14

Negative

RSI

58.66

Neutral

STOCH

91.84

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SSDOY, the sentiment is Neutral. The current price of 17.18 is above the 20-day moving average (MA) of 16.32, above the 50-day MA of 16.49, and below the 200-day MA of 18.95, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 58.66 is Neutral, neither overbought nor oversold. The STOCH value of 91.84 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SSDOY.

Shiseido Company Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IPAR	82 Outperform	$4.52B	27.36	22.16%	2.27%	10.32%	18.55%
ELF	75 Outperform	$6.64B	64.84	15.97%	―	28.28%	-14.79%
Sector *	65 Neutral	$8.88B	15.01	4.67%	6.15%	3.61%	-2.60%
HELE	64 Neutral	$678.87M	5.27	7.45%	―	-4.93%	-23.61%
SSDOY	59 Neutral	$6.95B	527.80	-0.62%	0.46%	-6.59%	-137.03%
COTY	59 Neutral	$4.42B	40.12	-10.58%	―	-1.68%	-302.11%
EL	59 Neutral	$25.35B	147.29	-17.27%	2.00%	-3.70%	-235.59%

* Consumer Defensive Sector Average

Performance Comparison

SSDOY

Shiseido Company

17.18

-14.98

-46.58%

The Estée Lauder Companies

69.99

-41.43

-37.18%

HELE

Helen Of Troy

27.06

-71.34

-72.50%

IPAR

Inter Parfums

141.48

33.85

31.45%

COTY

Coty

5.03

-4.82

-48.93%

ELF

e.l.f. Beauty

128.54

-64.09

-33.27%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.