Frontier Management, Inc. (7038) AI Stock Analysis

• Market Cap: ¥8.44B
• Dividend Yield: 6.22%
• Average Volume (3M): 32.00K
• Price to Earnings (P/E): 67.2
• Beta (1Y): 0.96
• Revenue Growth: 0.06%
• EPS Growth: -255.58%
• Country: JP
• Employees: 433
• Sector: Industrials
• Sector Strength: 93
• Industry: Specialty Business Services
• EPS (TTM): -11.02
• Shares Outstanding: 11,814,001
• 10 Day Avg. Volume: 37,550
• 30 Day Avg. Volume: 32,000
• PEG Ratio: 0.02
• Price to Book (P/B): 3.20
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 155.37
• 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: 50 Neutral
• Price Target: ¥718.00 ▲(0.28%Upside)

The overall stock score reflects significant financial performance challenges and weak valuation metrics. Despite a neutral technical analysis indicating no immediate risk of decline, the financial and valuation concerns weigh heavily on the stock's outlook.

Frontier Management, Inc. Business Overview & Revenue Model

Company Description

Frontier Management, Inc. (7038) is a Japanese company primarily engaged in the management consulting sector. It offers a wide range of services, including business strategy consulting, organizational reform, and human resource development. The company aims to support businesses in enhancing their operational efficiency and achieving sustainable growth.

How the Company Makes Money

Frontier Management, Inc. generates revenue through consulting fees charged to its clients for the various services it provides. These services include strategic planning, corporate restructuring, and organizational improvement. The company collaborates with businesses across different industries, offering tailor-made solutions to address specific challenges and opportunities. Revenue is primarily driven by long-term engagements with large corporations, as well as short-term projects with smaller businesses. Significant partnerships with key clients and the company's reputation for delivering effective management solutions also contribute to its income.

Frontier Management, Inc. Financial Statement Overview

Summary

Frontier Management, Inc. is facing financial difficulties with notable declines in revenue, profitability, and cash flow, marking a reversal from past growth trends. Despite a strong cash position providing liquidity, the increasing leverage and declining equity ratio highlight financial risks. A strategic focus on operational efficiency and revenue growth is necessary to counter these negative trends.

Income Statement

The company experienced a significant revenue decline from 2023 to 2024, falling from ¥10.03 billion to ¥9.27 billion. The gross profit margin has declined alongside the revenue, indicating cost management challenges. Additionally, the net loss in 2024 is a concern, as it reflects negative profitability trends. Historical growth from 2019 to 2022 was robust, but recent performance shows volatility, emphasizing the need for strategic adjustments.

Balance Sheet

The balance sheet highlights a strong cash position with significant cash reserves outstripping total debt, resulting in a negative net debt. This provides liquidity and operational flexibility. However, the debt-to-equity ratio has increased from 2023 to 2024, indicating higher leverage. The equity ratio dropped, pointing towards rising liabilities relative to assets, which could pose future financial risks if not managed properly.

Cash Flow

The cash flow situation is concerning, with a significant decline in both operating and free cash flows in 2024. This decline follows a previously positive trend, indicating operational challenges. The operating cash flow to net income ratio is negative, reflecting cash flow inefficiency. Historically, the company maintained positive cash flows, but recent cash flow strains highlight potential liquidity issues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
9.27B	10.03B	7.92B	5.74B	5.19B
	Gross Profit
4.26B	5.53B	4.69B	3.49B	3.11B
	EBIT
-632.00M	1.25B	908.13M	501.29M	580.80M
	EBITDA
-588.72M	1.35B	959.94M	552.31M	614.99M
	Net Income Common Stockholders
-694.00M	780.68M	556.72M	338.71M	420.51M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.79B	6.36B	3.22B	1.79B	1.90B
	Total Assets
14.17B	10.87B	5.66B	3.82B	3.79B
	Total Debt
1.40B	1.59B	777.70M	0.00	0.00
	Net Debt
-6.16B	-4.25B	-2.42B	-1.78B	-1.90B
	Total Liabilities
3.42B	4.05B	2.64B	1.37B	1.34B
	Stockholders Equity
2.70B	3.76B	2.96B	2.45B	2.45B
Cash Flow		Free Cash Flow
-2.55B	181.19M	1.16B	286.14M	453.63M
	Operating Cash Flow
-2.52B	225.00M	1.25B	316.81M	456.10M
	Investing Cash Flow
-63.85M	-1.38B	-486.91M	-31.52M	-59.30M
	Financing Cash Flow
4.30B	3.79B	646.53M	-404.76M	-230.68M

Frontier Management, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 716.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7038, the sentiment is Positive. The current price of 716 is below the 20-day moving average (MA) of 720.35, above the 50-day MA of 693.74, and below the 200-day MA of 840.82, indicating a neutral trend. The MACD of 5.04 indicates Positive momentum. The RSI at 54.99 is Neutral, neither overbought nor oversold. The STOCH value of 61.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7038.

Frontier Management, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6580	80 Outperform	¥9.57B	19.26		1.06%	44.22%	111.83%
7318	78 Outperform	¥11.11B	5.45		―	26.97%	275.83%
7386	74 Outperform	¥8.49B	15.09		0.60%	13.85%	6.06%
Sector *	65 Neutral	$4.46B	12.23	5.23%	249.78%	4.08%	-12.31%
7371	60 Neutral	¥7.40B	24.50		2.83%	-2.79%	17.28%
7038	50 Neutral	¥8.44B	67.23		6.22%	0.06%	-255.58%

Frontier Management, Inc. Corporate Events

Frontier Management Inc. Reports Q1 FY2025 Financial Results Amid Strategic Expansion

Frontier Management Inc. reported its consolidated financial results for the first quarter of the fiscal year ending December 2025, showing a 12.7% increase in net sales compared to the previous year. Despite the rise in sales, the company experienced a decline in operating income and a net loss attributable to owners of the parent, reflecting challenges in the current economic environment. The company has also expanded its scope of consolidation by including four new companies, indicating a strategic move to enhance its market position. However, the equity ratio has decreased, suggesting a potential impact on financial stability.

Frontier Management Completes Restricted Stock Allocation

Frontier Management Inc. has completed the allocation of restricted stock awards, issuing 44,998 shares of common stock at JPY 713 per share, totaling JPY 32,083,574. This move, resolved by the Board of Directors, aims to incentivize key directors and align their interests with the company’s long-term goals.

Frontier Management Aligns Director Compensation with Performance Goals

Frontier Management Inc. announced the issuance of new shares as restricted stock awards to align director compensation with company performance and shareholder value. This move is part of a broader strategy to link remuneration with both short-term and long-term performance goals, enhancing incentives for directors to achieve corporate objectives.

Frontier Management Inc. Unveils Plan to Meet TSE Prime Market Listing Criteria

Frontier Management Inc. has announced a strategic plan to meet the Tokyo Stock Exchange Prime Market’s listing criteria by December 2026, after failing to meet the market capitalization requirement as of December 2024. The company aims to improve profitability and enhance its price earnings ratio by focusing on organic growth, M&A activities, and improved investor relations, thereby ensuring its business growth potential is accurately evaluated and enhancing shareholder value.

Frontier Management, Inc. Strengthens Corporate Governance and Diversity Initiatives

Frontier Management, Inc. has announced its commitment to strengthening corporate governance to enhance corporate value and management efficiency. The company is focusing on improving diversity within its workforce, aiming to increase the percentage of female employees and managers by 2026, and has established a DE&I Promotion Committee to foster an inclusive work environment.

Frontier Management Completes Acquisition of HobbyLink Japan

Frontier Management Inc. announced the completion of its acquisition of HobbyLink Japan Ltd. through its subsidiary, Frontier Capital Inc. The acquisition cost was revised from 2.3 billion yen to 2 billion yen, and the company plans to issue new shares through a third-party allotment, maintaining HobbyLink Japan as a consolidated subsidiary. This strategic move is expected to impact Frontier Management’s consolidated results for the fiscal year ending December 2025.