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CORREC CO., LTD.
(6578)
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Rating:55Neutral
Price Target:
¥504.00
▲(26.63% Upside)
Action:Downgraded
Date:04/17/26
The score is driven mainly by mixed fundamentals: shrinking revenue, compressed profitability, and weakening 2026 operating cash flow, despite positive free cash flow and an equity-backed balance sheet. Technical indicators are neutral-to-soft (negative MACD, below 50-day average), and valuation is less attractive given the high P/E, only partly supported by the dividend yield.
Positive Factors
Equity-backed balance sheet
Stable equity near ¥1.01–1.10B provides a durable capital cushion that supports operations, investment and distributions over the medium term. That equity base helps absorb earnings volatility and enables strategic flexibility even as leverage has risen.
Negative Factors
Sustained revenue contraction
Multi-year revenue declines, including an -8.1% drop in 2026, signal structural demand or market-share challenges. Persistent top-line shrinkage undermines economies of scale, compresses operating leverage and makes durable margin recovery and cash generation harder.
Read all positive and negative factors
Positive Factors
Negative Factors
Equity-backed balance sheet
Stable equity near ¥1.01–1.10B provides a durable capital cushion that supports operations, investment and distributions over the medium term. That equity base helps absorb earnings volatility and enables strategic flexibility even as leverage has risen.
Read all positive factors
CORREC CO., LTD. (6578) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥3.61B
Dividend Yield2.07%
Average Volume (3M)24.38K
Price to Earnings (P/E)―
Beta (1Y)0.50
Revenue Growth-8.71%
EPS Growth-173.06%
CountryJP
Employees358
SectorIndustrials
Sector Strength72
IndustrySoftware - Services
Share Statistics
EPS (TTM)5.48
Shares Outstanding7,422,400
10 Day Avg. Volume12,410
30 Day Avg. Volume24,376
Financial Highlights & Ratios
PEG Ratio0.81
Price to Book (P/B)3.08
Price to Sales (P/S)0.49
P/FCF Ratio41.75
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
CORREC CO., LTD. Business Overview & Revenue Model
Company Description
CORREC Co., Ltd., together with its subsidiaries, engages in the engages in sales agency work in Japan. It operates through energy segment, outsourcing, and media platform segments. The company is involved in chat real estate service for finding a...
How the Company Makes Money
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CORREC CO., LTD. Earnings Call Summary
Earnings Call Date:Jan 09, 2026
(Q3-2025)
| % Change Since: |
Next Earnings Date:Oct 08, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive picture: group revenue and profits grew YoY, several full-year forecasts were revised upward (including a double-digit upgrade to net income), Games, Music and sensors showed strong momentum, MAUs and streaming metrics reached record or robust growth, and shareholder returns continued via buybacks. Lowlights were concentrated in Pictures (marketing-driven profit decline and strike-related timing shifts), a modest sales decline in ET&S, near-term profit pressure in I&SS and Financial Services' volatility from market-related gains/losses. Management highlighted active mitigation actions (cost reductions, inventory control, supply-chain duplication, bond sales at Sony Life) and a clear strategic focus on entertainment and global expansion. Overall the positive operational and guidance trends outweigh the isolated segment challenges, indicating constructive forward momentum.Positive Updates
Consolidated Quarterly Revenue and Profit Growth
Consolidated sales (excluding Financial Services) for Q3 rose 7% YoY to JPY 3,695.7 billion and operating income increased 10% YoY to JPY 423.0 billion. Consolidated sales including Financial Services grew 18% YoY to JPY 4,409.6 billion, operating income rose 1% YoY to JPY 469.3 billion (a Q3 record), and net income increased 3% YoY to JPY 373.7 billion.
Negative Updates
Pictures Operating Income Decline and Increased Marketing Costs
Pictures sales rose 9% YoY to JPY 398.2 billion, but operating income fell 18% YoY to JPY 34.0 billion primarily because of higher marketing expenses for theatrical releases. Some major theatrical releases were postponed due to industry strikes, shifting timing into later fiscal years.
Read all updates
Q3-2025 Updates
Positive
Negative
Consolidated Quarterly Revenue and Profit Growth
Consolidated sales (excluding Financial Services) for Q3 rose 7% YoY to JPY 3,695.7 billion and operating income increased 10% YoY to JPY 423.0 billion. Consolidated sales including Financial Services grew 18% YoY to JPY 4,409.6 billion, operating income rose 1% YoY to JPY 469.3 billion (a Q3 record), and net income increased 3% YoY to JPY 373.7 billion.
Read all positive updates
Company Guidance
Sony provided an upwardly revised full‑year outlook and strong Q3 guidance: consolidated Q3 sales excl. Financial Services were JPY 3,695.7bn (up 7% YoY) with operating income JPY 423.0bn (up 10%); consolidated Q3 sales including Financial Services were JPY 4,409.6bn (up 18%), operating income JPY 469.3bn (up 1%, a Q3 record) and net income JPY 373.7bn (up 3%). For the full year the company raised sales excl. Financial Services to JPY 11,900bn and operating income to JPY 1,190bn (up 2%), with operating cash flow revised up 15% to JPY 1,660bn; consolidated sales incl. Financial Services were raised to JPY 13,200bn (up 4%), operating income to JPY 1,335bn (up 2%) and net income to JPY 1,080bn (up 10%). Key segment guidance and metrics include G&NS sales of JPY 1,682.3bn in Q3 (up 16%) and operating income JPY 118.1bn (up 37%, Q3 record) with MAUs at a record 129m (Dec, +5% YoY), PS5 cumulative sell‑through comparable to PS4 at the same post‑launch point and promotion cost per PS5 unit down ~20% YoY; G&NS full‑year sales were revised to JPY 4,610bn (+3%) and operating income to JPY 380bn (+7%). Music Q3 sales JPY 481.7bn (+14%) and op. income JPY 97.4bn (+28%) prompted full‑year upward revisions to JPY 1,790bn sales and JPY 340bn operating income (both +3%); Pictures Q3 sales JPY 398.2bn (+9%) with op. income JPY 34.0bn (‑18%) and an unchanged full‑year forecast; ET&S Q3 sales JPY 704.5bn (‑4%) and op. income JPY 77.1bn (flat) with no change to FY guidance; I&SS Q3 sales JPY 500.9bn (flat) and op. income JPY 97.5bn (‑2%) with a slight FY sales lift to JPY 1,790bn; Financial Services Q3 revenue rose to JPY 718.5bn (up JPY 406.7bn YoY) with operating income JPY 46.4bn (down JPY 30.9bn YoY) and the full‑year Financial Services revenue forecast raised by JPY 390bn to JPY 1,300bn (op. income unchanged). The company also completed a JPY 250bn buyback and established a new JPY 50bn repurchase facility.CORREC CO., LTD. Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
62
Positive
Cash Flow
58
Neutral
| Breakdown | Feb 2026 | Feb 2025 | Feb 2024 | Feb 2023 | Feb 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.69B | 6.47B | 3.94B | 4.12B | 4.82B |
| Gross Profit | 5.35B | 4.39B | 3.43B | 3.85B | 4.62B |
| EBITDA | 82.36M | 177.01M | 156.01M | 292.85M | -62.03M |
| Net Income | 40.25M | 19.94M | 88.79M | 201.76M | -371.05M |
Balance Sheet | |||||
| Total Assets | 3.07B | 2.94B | 2.38B | 1.82B | 1.93B |
| Cash, Cash Equivalents and Short-Term Investments | 1.46B | 1.56B | 1.41B | 1.05B | 1.04B |
| Total Debt | 733.90M | 792.78M | 640.00M | 316.67M | 341.66M |
| Total Liabilities | 2.00B | 1.86B | 1.27B | 807.81M | 1.05B |
| Stockholders Equity | 1.07B | 1.08B | 1.10B | 1.01B | 876.70M |
Cash Flow | |||||
| Free Cash Flow | 79.26M | 170.12M | 162.68M | -41.42M | -646.53M |
| Operating Cash Flow | 88.97M | 174.61M | 175.05M | -41.21M | -644.53M |
| Investing Cash Flow | -93.19M | -131.46M | -33.65M | 22.11M | -63.13M |
| Financing Cash Flow | -98.62M | 105.84M | 323.95M | -23.70M | 119.13M |
CORREC CO., LTD. Technical Analysis
Positive
398.00
Price Trends
452.94
Positive
439.16
Positive
399.82
Positive
Market Momentum
11.18
Positive
65.51
Neutral
47.58
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6578, the sentiment is Positive. The current price of 398 is below the 20-day moving average (MA) of 477.15, below the 50-day MA of 452.94, and below the 200-day MA of 399.82, indicating a bullish trend. The MACD of 11.18 indicates Positive momentum. The RSI at 65.51 is Neutral, neither overbought nor oversold. The STOCH value of 47.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6578.
CORREC CO., LTD. Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | ¥1.05T | 26.30 | ― | 1.30% | 28.87% | 20.88% | |
77 Outperform | ¥25.41B | 22.16 | ― | 3.50% | 11.96% | 10.15% | |
72 Outperform | ¥32.30B | 11.23 | ― | 4.39% | 17.36% | 0.10% | |
72 Outperform | ¥12.61B | 13.86 | ― | 2.91% | 6.19% | 28.57% | |
71 Outperform | ¥22.83B | 11.81 | ― | 2.18% | ― | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
55 Neutral | ¥3.61B | -28.62 | ― | 2.07% | -8.71% | -173.06% |
* Industrials Sector Average
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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.