Rhythm Co., Ltd. (7769) AI Stock Analysis

• Market Cap: ¥27.71B
• Dividend Yield: 2.18%
• Average Volume (3M): 25.18K
• Price to Earnings (P/E): 13.6
• Beta (1Y): 0.43
• Revenue Growth: -2.63%
• EPS Growth: 148.45%
• Country: JP
• Employees: 2,486
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): 184.81
• Shares Outstanding: 8,385,093
• 10 Day Avg. Volume: 17,520
• 30 Day Avg. Volume: 25,176
• PEG Ratio: 0.69
• Price to Book (P/B): 0.98
• Price to Sales (P/S): 0.94
• P/FCF Ratio: 25.58
• 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: 76 Outperform
• Price Target: ¥3,780.00 ▲(14.55% Upside)

Rhythm Co., Ltd. has a strong financial foundation with solid revenue growth and profitability, supported by effective cash flow management. The technical indicators suggest stability, while the valuation is reasonable, making it a moderately attractive investment in the luxury goods sector.

Rhythm Co., Ltd. Business Overview & Revenue Model

Company Description

Rhythm Co., Ltd. (7769) is a leading Japanese company specializing in the design, manufacturing, and distribution of timepieces, including watches and clock mechanisms. The company operates primarily in the consumer electronics sector, focusing on creating innovative and high-quality products that cater to both domestic and international markets. Rhythm Co. is well-known for its precision engineering and commitment to craftsmanship, offering a diverse range of timekeeping products suited for various lifestyles and preferences.

How the Company Makes Money

Rhythm Co., Ltd. generates revenue primarily through the sale of its watches and clock mechanisms. The company's revenue model is multifaceted, with key revenue streams including direct sales to consumers through retail outlets and online platforms, as well as wholesale distribution to third-party retailers. Additionally, Rhythm Co. benefits from partnerships with various brands and manufacturers, allowing them to expand their product offerings and reach new customer segments. The company also invests in research and development to innovate and improve its product lines, ensuring competitiveness in the market, which contributes to sustained earnings growth.

Rhythm Co., Ltd. Financial Statement Overview

Summary

Rhythm Co., Ltd. demonstrates strong revenue growth and improved profitability with a healthy gross profit margin and increased net profit margin. The balance sheet is solid with low leverage and high equity ratio, though ROE has declined slightly. Cash flow is robust, supporting investment and expansion, despite some constraints in free cash flow relative to net income.

Income Statement

Rhythm Co., Ltd. demonstrates strong revenue growth over recent years, with a notable increase from ¥27.3 billion in 2021 to ¥32.7 billion in 2025. The gross profit margin remains healthy at approximately 20%, reflecting efficient cost management. Net profit margin has improved significantly, reaching 2.3% in 2025, signaling enhanced profitability. The EBIT and EBITDA margins have also increased, indicating stronger operational performance.

Balance Sheet

The company maintains a solid balance sheet with a decreasing debt-to-equity ratio, which stood at 0.24 in 2025, showcasing prudent financial leverage. The equity ratio is robust at 69.4%, indicating strong financial stability. However, a slight decrease in ROE from 3.8% in 2024 to 2.4% in 2025 suggests room for improvement in generating returns on equity.

Cash Flow

Rhythm Co., Ltd. enjoys a positive free cash flow trajectory, with a remarkable growth of 68.9% from 2024 to 2025, reflecting effective capital management. The operating cash flow to net income ratio of 3.2 in 2025 indicates strong cash generation relative to income, although the free cash flow to net income ratio is more modest at 1.6, suggesting potential constraints on discretionary cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	32.90B	32.67B	32.60B	31.23B	30.00B	27.30B
Gross Profit	6.98B	6.59B	6.67B	6.78B	6.81B	6.34B
EBITDA	3.51B	2.61B	2.22B	2.46B	2.77B	556.00M
Net Income	2.03B	758.00M	477.00M	794.00M	1.03B	-1.26B
Balance Sheet
Total Assets	45.34B	45.09B	43.57B	39.74B	38.29B	35.70B
Cash, Cash Equivalents and Short-Term Investments	13.51B	13.52B	11.04B	9.90B	9.94B	10.28B
Total Debt	8.75B	7.65B	5.56B	4.66B	4.58B	5.28B
Total Liabilities	14.77B	13.78B	12.43B	10.87B	11.29B	10.66B
Stockholders Equity	30.57B	31.31B	31.14B	28.87B	27.00B	25.02B
Cash Flow
Free Cash Flow	0.00	1.20B	710.00M	94.00M	300.00M	1.15B
Operating Cash Flow	0.00	2.44B	2.46B	1.19B	1.25B	1.85B
Investing Cash Flow	0.00	-1.46B	-2.14B	-1.07B	-876.00M	-585.00M
Financing Cash Flow	0.00	1.32B	150.00M	-467.00M	-1.20B	-686.00M

Rhythm Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3300.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7769, the sentiment is Positive. The current price of 3300 is below the 20-day moving average (MA) of 3332.50, below the 50-day MA of 3337.00, and below the 200-day MA of 3485.69, indicating a neutral trend. The MACD of 5.72 indicates Negative momentum. The RSI at 55.52 is Neutral, neither overbought nor oversold. The STOCH value of 63.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7769.

Rhythm Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7769	―	¥27.71B	13.58	―	2.18%	-2.63%	148.45%
9904	―	¥10.12B	20.95	―	5.29%	3.88%	0.84%
7638	―	¥25.34B	12.18	―	3.07%	38.13%	94.39%
7937	―	$35.08B	22.35	2.37%	3.43%	19.89%	-11.30%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
8139	―	¥24.66B	75.91	―	0.62%	2.98%	-42.40%
7872	―	¥6.22B	―	―	4.62%	-1.15%	47.80%

Rhythm Co., Ltd. Corporate Events

Rhythm Co., Ltd. Announces Shareholder Benefit Plan Details

Rhythm Co., Ltd. has announced the details of its Shareholder Benefit Plan, which was resolved at the Board of Directors meeting. The plan includes a benefit of a digital gift service equivalent to 15,000 yen for eligible shareholders recorded as of the end of March each year, starting from March 2026. The costs related to this plan have been incorporated into the company’s financial forecast for the fiscal year ending March 31, 2026.

Rhythm Co., Ltd. Completes Liquidation of U.S. Subsidiary

Rhythm Co., Ltd. has completed the liquidation of its wholly-owned subsidiary, RHYTHM U.S.A., INC., which was involved in the sales of Rhythm brand clocks in the United States. This liquidation has resulted in a gain of 191 million yen, recorded as extraordinary income, potentially strengthening the company’s financial position.

Rhythm Co., Ltd. Revises Financial Forecasts Amid Mixed Business Performance

Rhythm Co., Ltd. has revised its financial forecasts for the fiscal year ending March 31, 2026, reflecting improved sales and profitability in its livingware business, particularly due to mobile fans. However, its precision parts business faces challenges with declining orders for European automobile parts. The company’s profit outlook has been positively impacted by gains from asset sales and subsidiary liquidation.

Rhythm Co., Ltd. Reports Strong Profit Growth and Revised Forecast

Rhythm Co., Ltd. reported a significant increase in profits for the three months ended June 30, 2025, with a 520.7% rise in profit attributable to owners of the parent compared to the previous year. The company also announced a revision to its financial results forecast for the fiscal year ending March 31, 2026, indicating positive growth expectations, despite a slight decrease in capital adequacy ratio and exclusion of RHYTHM U.S.A., INC. from its consolidation scope.