Sougou Shouken Co., Ltd. (7850) AI Stock Analysis

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Sougou Shouken Co., Ltd.

(TSE/TYO:7850)

Select Model

Rating:63Neutral

Price Target:JPY 853.00▲(10.92% Upside)

Action:reiterated

Date:09/12/26

The stock's score is primarily driven by a mixed financial performance, where strong revenue growth and a healthier balance sheet are countered by weak cash flow generation. The very attractive valuation, with a low P/E ratio and solid dividend yield, provides significant support. However, the technical analysis is a major headwind, showing a clear bearish trend and weak momentum across all key indicators.

Positive Factors

Gross margin expansionThe sustained improvement in gross margin indicates better retention of revenue after direct costs and provides a stronger base for future earnings. Although operating profitability remains modest, this trend could support incremental margin expansion if cost discipline is maintained.

Negative Factors

Thin profitabilityVery low operating and net margins leave limited protection against cost increases, weaker demand, or execution pressure. Even with improved gross margin, a small amount of operating friction can materially reduce earnings, making durable profitability more difficult to sustain.

Sougou Shouken Co., Ltd. (7850) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 2.31B
Dividend Yield: 2.60%
Average Volume (3M): 2,562
Price to Earnings (P/E): 7.4
Beta (1Y): 0.25
Revenue Growth: -1.26%
EPS Growth: -1.85%
Country: Japan
Employees: 381
Sector: General
Sector Strength: 55
Industry: Specialty Business Services

Sougou Shouken Co., Ltd. Business Overview & Revenue Model

Company Description

Sougou Shouken Co., Ltd. engages in the business of commercial printing and advertising services. The company operates through the Information Communication segment which provides sales promotion services through events planning in print media, telev...

Sougou Shouken Co., Ltd. Financial Statement Overview

Summary

Financial performance is mixed. The income statement shows strong revenue growth and improving gross margins, but net margins remain very thin. The balance sheet has significantly improved with much lower leverage. However, cash flow is a concern due to volatile free cash flow and weak cash conversion from net income. Overall, operational turnaround and balance sheet strength are offset by poor cash generation.

Income Statement

72Positive

Balance Sheet

78Positive

Cash Flow

55Neutral

Financial statement breakdown
Breakdown	TTM	Jul 2026	Jul 2025	Jul 2024	Jul 2023	Jul 2022
Income Statement
Total Revenue	16.03B	16.03B	16.24B	15.80B	15.86B	15.31B
Gross Profit	5.13B	5.13B	5.02B	4.74B	4.49B	4.21B
EBITDA	769.58M	669.68M	837.90M	893.33M	812.12M	825.14M
Net Income	313.75M	313.75M	319.66M	274.50M	207.48M	178.93M
Balance Sheet
Total Assets	7.66B	7.66B	8.02B	7.71B	8.37B	8.98B
Cash, Cash Equivalents and Short-Term Investments	1.04B	1.04B	1.30B	1.18B	1.34B	1.53B
Total Debt	2.35B	2.35B	2.83B	3.10B	4.11B	4.76B
Total Liabilities	4.17B	4.17B	4.85B	4.82B	5.76B	6.50B
Stockholders Equity	3.45B	3.45B	3.14B	2.86B	2.58B	2.45B
Cash Flow
Free Cash Flow	0	467.72M	546.45M	601.46M	596.39M	454.76M
Operating Cash Flow	0	644.36M	610.13M	863.66M	642.06M	584.72M
Investing Cash Flow	0	-353.49M	-157.65M	41.38M	-120.87M	-294.47M
Financing Cash Flow	0	-565.45M	-332.76M	-1.07B	-708.99M	-401.71M

Sougou Shouken Co., Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price769.00

Price Trends

50DMA794.00Negative

100DMA817.99Negative

200DMA837.65Negative

Market Momentum

MACD-8.90Positive

RSI42.02Neutral

STOCH55.37Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7850, the sentiment is Negative. The current price of 769.00 is below the 20-day moving average (MA) of 783.80, below the 50-day MA of 794.00, and below the 200-day MA of 837.65, indicating a bearish trend. The MACD of -8.90 indicates Positive momentum. The RSI at 42.02 is Neutral, neither overbought nor oversold. The STOCH value of 55.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7850.

Sougou Shouken Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:7850 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:7987	70Outperform	JPY 13.98B	5.65	―	4.07%	-0.27%	41.12%
JP:3948	63Neutral	JPY 6.70B	19.78	―	4.29%	0.32%	67.81%
JP:7850	63Neutral	JPY 2.31B	7.35	―	2.60%	-1.26%	-1.85%
JP:7916	57Neutral	JPY 5.58B	31.11	―	2.74%	-3.13%	-142.20%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:7919	55Neutral	JPY 3.47B	5.24	―	3.81%	-1.46%	43.56%
JP:7805	54Neutral	JPY 3.06B	9.12	―	2.11%	-1.49%	-24.51%

* General Sector Average

Performance Comparison

JP:7850 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:7850	Sougou Shouken Co., Ltd.	769.00	-52.95	-6.44%
JP:3948	Hikari Business Form Co., Ltd.	1166.00	-38.66	-3.21%
JP:7805	PRINTNET INC.	617.00	-29.30	-4.53%
JP:7916	Mitsumura Printing Co., Ltd.	1823.00	215.89	13.43%
JP:7919	Nozaki Insatsu Shigyo Co., Ltd.	202.00	17.73	9.62%
JP:7987	Nakabayashi Co., Ltd.	541.00	21.01	4.04%

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: Sep 12, 2026

Sougou Shouken Co., Ltd. AI Stock Analysis