Watami Co., Ltd. (7522) AI Stock Analysis

Watami Co., Ltd.

(TSE/TYO:7522)

Select Model

Rating:78Outperform

Price Target:JPY 975.00▲(15.25% Upside)

Action:upgraded

Date:08/17/26

Watami scores 78, reflecting a favorable investment case. The company's strong financial performance—marked by improving profitability, reduced leverage, and solid cash flow—is the primary driver. The stock is in a bullish trend, though overbought conditions may cause short-term volatility. Attractive valuation with a low P/E ratio further supports the positive outlook.

Positive Factors

Profitability TurnaroundRecovery from losses in 2022 to sustained profitability indicates that the operating model has regained earnings capacity. If maintained, positive net income and improved EBIT can support reinvestment and resilience across the next several quarters.

Negative Factors

Meaningful Debt BurdenDespite better leverage, TTM debt of about ¥27.2 billion remains close to equity of about ¥29.8 billion. That meaningful obligation can constrain financial flexibility and leave less room to absorb weaker operating conditions or fund initiatives.

Watami Co., Ltd. (7522) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 33.93B
Dividend Yield: 1.18%
Average Volume (3M): 161.44K
Price to Earnings (P/E): 6.5
Beta (1Y): 0.37
Revenue Growth: 6.60%
EPS Growth: 124.61%
Country: Japan
Employees: 1,624
Sector: Consumer Cyclical
Sector Strength: 61
Industry: Restaurants

Watami Co., Ltd. Business Overview & Revenue Model

Company Description

Watami Co., Ltd. is a diverse enterprise with operations spanning food service, home meal delivery, and agricultural sectors, both within Japan and internationally. The company's portfolio includes managing a chain of restaurants, as well as involvem...

How the Company Makes Money

Watami makes money mainly by selling food and beverages through its restaurant operations, generating revenue from customer spending (dine-in sales and, where applicable, takeout/delivery sales) across its branded restaurant formats. A second major s...

Watami Co., Ltd. Financial Statement Overview

Summary

Watami has shown steady revenue growth and a strong turnaround in profitability, with net margin reaching 5.5% TTM. Balance sheet strength improved significantly, with debt-to-equity down to 0.91 and robust ROE of 18.2%. Operating cash flow is solid, though free cash flow declined slightly. Overall financial health is sound.

Income Statement

78Positive

Balance Sheet

85Very Positive

Cash Flow

72Positive

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	95.31B	93.27B	88.71B	82.30B	77.92B	64.36B
Gross Profit	52.75B	51.99B	48.36B	46.63B	42.18B	32.96B
EBITDA	8.49B	8.16B	7.40B	6.55B	4.27B	935.00M
Net Income	5.22B	4.11B	3.52B	4.19B	1.67B	-1.84B
Balance Sheet
Total Assets	73.29B	74.56B	71.49B	64.23B	57.05B	52.22B
Cash, Cash Equivalents and Short-Term Investments	44.74B	45.95B	46.13B	40.64B	35.71B	30.83B
Total Debt	27.24B	29.00B	29.08B	26.76B	24.68B	25.02B
Total Liabilities	42.94B	44.06B	44.35B	42.06B	39.24B	37.59B
Stockholders Equity	29.84B	30.16B	26.80B	21.89B	17.68B	14.47B
Cash Flow
Free Cash Flow	4.08B	4.62B	5.52B	2.80B	5.10B	-692.00M
Operating Cash Flow	7.55B	7.57B	6.89B	4.74B	6.68B	1.02B
Investing Cash Flow	-6.79B	-4.92B	-6.56B	-3.06B	-4.99B	-15.37B
Financing Cash Flow	-2.13B	-1.90B	-13.00M	59.00M	-1.54B	10.10B

Watami Co., Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price846.00

Price Trends

50DMA900.38Negative

100DMA919.21Negative

200DMA935.59Negative

Market Momentum

MACD-12.31Negative

RSI39.34Neutral

STOCH21.11Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7522, the sentiment is Negative. The current price of 846.00 is below the 20-day moving average (MA) of 857.00, below the 50-day MA of 900.38, and below the 200-day MA of 935.59, indicating a bearish trend. The MACD of -12.31 indicates Negative momentum. The RSI at 39.34 is Neutral, neither overbought nor oversold. The STOCH value of 21.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7522.

Watami Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:7522 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:7522	78Outperform	JPY 34.70B	6.49	―	1.18%	6.60%	124.61%
JP:3087	63Neutral	JPY 157.63B	17.75	―	1.72%	7.72%	32.66%
JP:3197	63Neutral	JPY 826.29B	43.41	10.08%	0.66%	11.29%	22.50%
JP:9936	63Neutral	JPY 176.83B	26.20	―	1.92%	-0.10%	-24.16%
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
JP:9861	51Neutral	JPY 291.39B	50.33	―	0.51%	9.53%	37.85%
JP:3397	49Neutral	JPY 423.76B	483.02	―	0.23%	3.28%	-79.18%

* Consumer Cyclical Sector Average

Performance Comparison

JP:7522 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:7522	Watami Co., Ltd.	846.00	-49.69	-5.55%
JP:3197	Skylark Holdings Co	3636.00	836.34	29.87%
JP:3087	Doutor Nichires Holdings Co., Ltd.	3600.00	1241.03	52.61%
JP:3397	TORIDOLL Holdings Corporation	4835.00	410.18	9.27%
JP:9861	Yoshinoya Holdings Co., Ltd.	4540.00	1538.31	51.25%
JP:9936	Ohsho Food Service Corp.	2910.00	-113.50	-3.75%

Watami Co., Ltd. Corporate Events

Watami Delivers Strong Q1 Profit Rebound but Withholds Full-Year Outlook Amid Global Uncertainty

Aug 14, 2026

Watami reported consolidated net sales of ¥24.2 billion for the three months ended June 30, 2026, up 9.3% year on year, with profit attributable to owners of parent surging to ¥1.62 billion and basic earnings per share rising to ¥37.46...

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: Aug 17, 2026

Watami Co., Ltd. AI Stock Analysis