TEAR Corp. (2485) AI Stock Analysis

• Market Cap: ¥11.25B
• Dividend Yield: 3.99%
• Average Volume (3M): 48.50K
• Price to Earnings (P/E): 9.0
• Beta (1Y): 0.24
• Revenue Growth: 33.96%
• EPS Growth: 64.42%
• Country: JP
• Employees: 899
• Sector: Consumer Cyclical
• Sector Strength: 70
• Industry: Personal Products & Services
• EPS (TTM): 27.97
• Shares Outstanding: 22,510,100
• 10 Day Avg. Volume: 58,560
• 30 Day Avg. Volume: 48,500
• PEG Ratio: 0.33
• Price to Book (P/B): 1.23
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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

• Rating: 72 Outperform
• Price Target: ¥542.00 ▲(8.18%Upside)

TEAR Corp. has a strong financial performance with impressive revenue growth and profitability, though cash flow generation needs improvement. The technical analysis shows upward momentum, but caution is warranted due to possible overbought conditions. The valuation indicates potential undervaluation with a solid dividend yield. Overall, TEAR Corp. presents a promising investment opportunity, though attention to cash flow is necessary.

TEAR Corp. Business Overview & Revenue Model

Company Description

TEAR Corp. (2485) is a Japanese company primarily engaged in the provision of funeral services. It operates in the life-ending industry, offering comprehensive services that include funeral planning, execution, and post-funeral arrangements. The company also deals with the sale of funeral-related products such as coffins, urns, and memorial goods, catering to both individual clients and institutional customers.

How the Company Makes Money

TEAR Corp. generates revenue through its diverse range of funeral services and related product sales. The company's primary income stream is derived from offering full-service funeral arrangements, which include venue preparation, ceremony facilitation, and associated logistics. Additionally, TEAR Corp. earns from the sale of funeral products, such as caskets and memorial items, which complement its service offerings. The company may also engage in partnerships with local governments or other institutions to provide specialized or large-scale funeral services, further contributing to its revenue. Seasonal demand fluctuations and demographic changes in Japan play a significant role in influencing the company's earnings.

TEAR Corp. Financial Statement Overview

Summary

TEAR Corp. exhibits strong revenue growth and solid profitability metrics with a healthy gross profit margin and robust EBIT and EBITDA margins. The balance sheet shows manageable leverage and effective equity utilization. However, the cash flow position is weak, with zero free cash flow, indicating a need for improvement in liquidity and operational efficiency.

Income Statement

TEAR Corp. demonstrates strong revenue growth with a TTM revenue of ¥20.47 billion, up from ¥14.07 billion in 2023, reflecting a significant revenue growth rate. Gross profit margin is healthy at 38.92% for TTM, and net profit margin stands at 4.85%, indicating solid profitability. EBIT and EBITDA margins are also robust at 8.45% and 13.90%, respectively. However, the net profit margin can be improved further for enhanced financial performance.

Balance Sheet

The company's balance sheet reveals a moderate debt-to-equity ratio of 1.47, indicating manageable leverage. Return on Equity (ROE) is decent at 11.88%, showing effective utilization of equity capital. The equity ratio is 30.50%, reflecting a balanced capital structure but leaves room for improvement to strengthen financial stability.

Cash Flow

Cash flow statements show challenges with free cash flow, which is currently zero in TTM. Historical free cash flow growth was strong, but maintaining positive free cash flow in the upcoming periods is crucial. Operating cash flow to net income ratio is not available for TTM, indicating potential issues in translating income to cash flow.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
20.47B	18.84B	14.07B	13.28B	12.20B	11.92B
	Gross Profit
7.97B	7.44B	5.77B	5.26B	4.75B	4.56B
	EBIT
1.73B	1.44B	1.14B	1.06B	887.00M	595.00M
	EBITDA
2.85B	2.63B	1.78B	1.49B	1.40B	1.16B
	Net Income Common Stockholders
992.00M	752.00M	789.00M	568.00M	542.00M	345.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.25B	4.29B	2.94B	3.08B	2.87B	3.06B
	Total Assets
27.38B	27.33B	15.38B	14.17B	13.54B	13.47B
	Total Debt
12.28B	12.23B	2.82B	2.37B	2.15B	2.57B
	Net Debt
8.03B	7.94B	-121.00M	-712.00M	-717.00M	-495.00M
	Total Liabilities
19.03B	19.14B	7.50B	6.67B	4.52B	4.54B
	Stockholders Equity
8.35B	8.19B	7.88B	7.50B	9.02B	8.93B
Cash Flow		Free Cash Flow
0.00	799.00M	-82.00M	445.00M	743.00M	223.00M
	Operating Cash Flow
0.00	2.00B	1.27B	1.35B	1.37B	986.00M
	Investing Cash Flow
0.00	-9.41B	-1.41B	-906.00M	-688.00M	-742.00M
	Financing Cash Flow
0.00	8.76B	-2.00M	-237.00M	-879.00M	-149.00M

TEAR Corp. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 501.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2485, the sentiment is Positive. The current price of 501 is above the 20-day moving average (MA) of 480.00, above the 50-day MA of 460.44, and above the 200-day MA of 438.36, indicating a bullish trend. The MACD of 11.57 indicates Negative momentum. The RSI at 68.85 is Neutral, neither overbought nor oversold. The STOCH value of 88.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2485.

TEAR Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9628	81 Outperform	¥32.77B	6.54		2.43%	42.55%	101.78%
2198	74 Outperform	¥23.21B	14.80		3.04%	3.78%	7.69%
2485	72 Outperform	¥11.25B	8.98		3.99%	33.96%	64.42%
7040	71 Outperform	¥5.60B	6.71		3.61%	1.39%	31.23%
Sector *	62 Neutral	$6.94B	11.29	2.95%	3.87%	2.70%	-24.49%
6186	58 Neutral	¥2.13B	7.99		3.66%	-2.43%	-115.41%
7578	54 Neutral	¥2.14B	―		―	-24.95%	-140.34%