The average target price of 6196.T is 5312 and suggests 45% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 6800.0. This translates into 85% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 4500.0. This suggests 22% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Strike Company,Limited provides mergers and acquisitions brokerage services in Japan. It offers M&A mediation/advice, corporate valuation, financial due diligence and consulting, pre-marketing service, financial consulting, and corporate revitalization support services. The company was incorporated in 1997 and is headquartered in Tokyo, Japan.

Japan

Strike Company,Limited

Financial Services

The company pays dividends on rare occasions. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been good and slightly above its peers. At the same time, the average five-year yield has been significantly lower, at almost zero. 

6196.T reported revenue of JPY 18 127mn in the last 12 months, up 17% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS grew 2% from FY23 to JPY 232.77. Market expects EPS to reach JPY 256.54 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 4ppts over six months and grown 22ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 31.7% in the last 12 months, a decline from 39.0% in FY23. 

Historically, 6196.T has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 23.8%, down from 28.3% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 22.2% in the last 12 months, a decrease from 31.0% in FY23. The market analysts predict that RoA will be 34.4% in FY24, again stronger than its peers. 

Strike Company,Limited reported a return on equity (RoE) of 25.9% in the last 12 months, down from 34.6% in FY23. The market consensus projects an RoE of 39.5% in FY24, again ahead of its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 25.4%, below the peers. The consensus estimate for FY24 for RoCE is 52.4%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 7.8 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

6196.T has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and remains favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, robust profitability, solid return on capital, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, excessive margin volatility, poor working capital management, and inadequate interest coverage.

In highly turbulent market conditions, 6196.T is highly volatile. In other words, the stock will fall substantially more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be significant. 

In normal market circumstances, 6196.T is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from large to notable. 

Considering past and projected metrics, the stock is neither 'expensive' nor 'cheap' compared to its peers. In particular, the stock is reasonably priced on P/E, 'cheap' on EV/EBITD. 

Strike Company,Limited

¥ 3725

5

Strike Company,Limited

¥ 3725

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

¥ 3725

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