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Palemo Holdings Co.,Ltd. (2778) AI Stock Analysis

JP:2778

Palemo Holdings Co.,Ltd.

(TSE/TYO:2778)

Select Model
Rating:46.4Neutral
Price Target:JPY 119.00â–¼(-8.46% Downside)
Action:reiterated
Date:09/26/26

The overall score is primarily constrained by weakening fundamentals and volatile cash flows, with only moderate support from a short- to medium-term positive price trend and momentum, while a loss-making valuation with no dividend keeps upside potential limited.

Positive Factors
Debt ReductionDebt reduction from the 2022 peak and stabilized equity improve financial resilience and reduce interest-related pressure. Although leverage remains material, deleveraging gives management more room to manage working capital and support operations over the next several quarters.
Negative Factors
Persistent Revenue ContractionFive consecutive years of revenue contraction indicate sustained weakness in demand, store productivity, or merchandise execution rather than a single-period setback. The steep 2026 decline makes it harder to absorb fixed retail costs and limits the company’s ability to rebuild earnings through scale.

Palemo Holdings Co.,Ltd. (2778) vs. iShares MSCI Japan ETF (EWJ)

-30%-20%-10%0%10%20%30%JP:2778-7.91%EWJ+17.00%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26
Market Cap
JPY 1.52B
Dividend Yield
―
Average Volume (3M)
45.91K
Price to Earnings (P/E)
-20.3
Beta (1Y)
0.73
Revenue Growth
-4.40%
EPS Growth
-90.41%
Country
Japan
Employees
118
Sector
Consumer Cyclical
Sector Strength
61
Industry
Apparel - Footwear & Accessories

Palemo Holdings Co.,Ltd. Business Overview & Revenue Model

Company Description

Palemo Holdings Co.,Ltd. operates a chain of specialty stores in Japan. The company sells women’s clothing, apparel, and accessories under Palemo Store, Lucid Park, Re-J&SUPURE, Hare no hi, INCENSE, Dosch, Gal Fit, and Suzutan brands. It is also invo...

How the Company Makes Money

Palemo Holdings makes money primarily by selling apparel and fashion-related merchandise to end customers. Its core revenue stream is merchandise sales generated through its retail operations (i.e., sales at company-operated stores and other retail f...

Palemo Holdings Co.,Ltd. Financial Statement Overview

Summary

Persistent revenue decline, volatile profitability, and inconsistent operating/free cash flows are only partly offset by stable gross margins and improved leverage, resulting in a weak but not distressed financial profile.

Income Statement

35Negative

Balance Sheet

45Neutral

Cash Flow

40Negative
Financial statement breakdown
BreakdownTTMFeb 2026Feb 2025Feb 2024Feb 2023Feb 2022
Income Statement
Total Revenue13.75B14.08B15.04B15.94B17.51B17.91B
Gross Profit7.18B7.43B7.90B8.28B9.14B9.35B
EBITDA147.19M213.63M164.02M741.92M750.85M-1.02B
Net Income-76.21M21.40M-47.63M411.77M562.00M-1.39B
Balance Sheet
Total Assets6.08B6.23B7.02B8.47B8.82B9.22B
Cash, Cash Equivalents and Short-Term Investments1.17B1.28B2.04B2.95B3.04B2.21B
Total Debt2.50B1.64B1.93B2.92B3.49B3.49B
Total Liabilities4.52B4.66B5.44B6.83B7.57B8.80B
Stockholders Equity1.56B1.58B1.58B1.64B1.25B418.48M
Cash Flow
Free Cash Flow0-340.24M250.40M434.84M24.57M-400.13M
Operating Cash Flow0-124.13M363.48M565.81M207.26M-158.58M
Investing Cash Flow0-332.96M-218.86M-80.72M362.78M107.19M
Financing Cash Flow0-310.91M-1.05B-584.75M264.96M125.43M

Palemo Holdings Co.,Ltd. Technical Analysis

Technical Analysis SentimentPositive
Last Price130.00

Price Trends

50DMA119.20Positive
100DMA115.37Positive
200DMA123.22Positive

Market Momentum

MACD2.10Positive
RSI57.41Neutral
STOCH62.70Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2778, the sentiment is Positive. The current price of 130.00 is above the 20-day moving average (MA) of 125.15, above the 50-day MA of 119.20, and above the 200-day MA of 123.22, indicating a bullish trend. The MACD of 2.10 indicates Positive momentum. The RSI at 57.41 is Neutral, neither overbought nor oversold. The STOCH value of 62.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2778.

Palemo Holdings Co.,Ltd. Peers Comparison

Overall Rating

UnderperformOutperform
Sector (61)

Financial Indicators

JP:2778 against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
JP:2792JP:279267NeutralJPY 38.93B16.03―3.94%-3.56%-29.47%
Sector *61Neutral$18.38B12.79-2.54%3.03%1.52%-15.83%
JP:8013JP:801348NeutralJPY 3.03B17.93――9.79%―
JP:2778JP:277846NeutralJPY 1.53B-20.29――-4.40%-90.41%
JP:3189JP:318940UnderperformJPY 7.44B-0.32――19.95%-408.72%
JP:7603JP:760338UnderperformJPY 2.30B-0.23――9.58%-10.49%

* Consumer Cyclical Sector Average

Performance Comparison

-50%0%50%JP:2778JP:2792JP:3189JP:7603JP:8013Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26
JP:2778 and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
JP:2778Palemo Holdings Co.,Ltd.128.00-12.00-8.57%
JP:2792HONEYS HOLDINGS CO. LTD.1397.00-37.73-2.63%
JP:3189ANAP Inc.58.00-422.00-87.92%
JP:7603Mac House Co., Ltd.25.00-150.00-85.71%
JP:8013NAIGAI Co., Ltd.369.0090.0032.26%
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.

Date of analysis: Sep 26, 2026