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

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Watami Co., Ltd.

(TSE/TYO:7522)

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Rating:82Outperform

Price Target:JPY 984.00▼(-2.38% Downside)

Action:reiterated

Date:08/17/26

Watami achieves a strong overall score, primarily driven by its attractive valuation and a highly successful financial turnaround featuring consistent revenue growth, improved profitability, and effective deleveraging. Technical indicators reflect a robust uptrend with positive momentum, further supporting the favorable outlook.

Positive Factors

Profitability turnaroundThe shift from losses in 2022 to sustained recent profitability indicates a meaningful improvement in operating performance. Continued positive net income gives Watami greater capacity to fund operations, support its brands, and absorb normal fluctuations in restaurant demand over the next several quarters.

Negative Factors

Meaningful remaining debtAlthough leverage has improved, the remaining debt load is still large relative to equity and remains significant for a restaurant business with consumer-sensitive revenues. This can constrain capital allocation, increase financial obligations, and reduce the company’s room to respond if operating conditions soften.

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

Market Cap: JPY 40.43B
Dividend Yield: 0.99%
Average Volume (3M): 163.37K
Price to Earnings (P/E): 7.7
Beta (1Y): 0.57
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 presents a robust financial profile driven by a successful turnaround, consecutive years of revenue growth, and margin expansion. The balance sheet has been effectively de-risked through steady deleveraging, while cash flow generation remains healthy and comfortably supports debt obligations.

Income Statement

85Very Positive

Balance Sheet

80Positive

Cash Flow

75Positive

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 SentimentPositive

Last Price1008.00

Price Trends

50DMA883.60Positive

100DMA914.51Positive

200DMA932.01Positive

Market Momentum

MACD3.99Negative

RSI75.76Negative

STOCH74.47Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7522, the sentiment is Positive. The current price of 1008.00 is above the 20-day moving average (MA) of 861.70, above the 50-day MA of 883.60, and above the 200-day MA of 932.01, indicating a bullish trend. The MACD of 3.99 indicates Negative momentum. The RSI at 75.76 is Negative, neither overbought nor oversold. The STOCH value of 74.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	82Outperform	JPY 34.82B	7.74	―	0.99%	6.60%	124.61%
JP:3087	73Outperform	JPY 172.89B	19.45	―	1.57%	7.72%	32.66%
JP:9936	70Outperform	JPY 178.22B	26.77	―	1.88%	-0.10%	-24.16%
JP:9861	69Neutral	JPY 302.51B	53.60	―	0.48%	9.53%	37.85%
JP:3197	64Neutral	JPY 800.58B	43.63	9.87%	0.66%	9.51%	10.42%
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
JP:3397	56Neutral	JPY 436.68B	188.34	―	0.20%	2.10%	-48.92%

* 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.	1008.00	80.64	8.70%
JP:3197	Skylark Holdings Co	3648.00	459.31	14.40%
JP:3087	Doutor Nichires Holdings Co., Ltd.	3945.00	1540.89	64.09%
JP:3397	TORIDOLL Holdings Corporation	5379.00	1082.86	25.21%
JP:9861	Yoshinoya Holdings Co., Ltd.	4835.00	1827.35	60.76%
JP:9936	Ohsho Food Service Corp.	2973.00	-114.31	-3.70%

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. While operati...

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