Rock Field (TSE:2910) Q2 Losses Undercut Bullish Margin-Recovery Narrative

Rock Field Ltd (TSE:2910) has posted another loss making quarter for Q2 2026, with revenue of ¥12.6 billion and net income of minus ¥90 million translating to basic EPS of minus ¥3.44. The company has seen quarterly revenue hover in a tight band over recent periods, from ¥12.7 billion in Q1 2026 and ¥11.7 billion in Q4 2025 to the latest ¥12.6 billion. EPS has swung from ¥19.25 in Q3 2025 to minus ¥10.87 in Q4 2025 and minus ¥0.38 in Q1 2026, creating a mixed picture for margins as investors weigh near term pressure against the longer term growth outlook.

See our full analysis for Rock FieldLtd.

With the latest numbers on the table, the next step is to compare these results with the dominant Rock Field narratives to see which storylines hold up and which ones the fresh margin pressures start to undermine.

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Margins Squeezed To 0.2 Percent

• Over the last 12 months Rock Field generated ¥50.9 billion in revenue but only ¥119 million in net profit, which works out to a slim 0.2 percent net margin compared with 1.5 percent a year ago.
• Bears focus on this margin compression as a sign of fragile profitability, and the numbers back up that concern:
  • Within the last four reported quarters three were loss making, including a ¥284 million loss in Q4 2025 and a ¥90 million loss in Q2 2026.
  • Reported earnings for the year also absorbed a one off loss of ¥276 million, which weighs on the trailing margin even though it does not reflect day to day trading.

Low 0.7x Sales Multiple Versus Peers

• The shares trade on a price to sales ratio of 0.7 times, below both the Japan hospitality industry average of 0.9 times and a 0.8 times peer average, even though revenue over the last year has held around ¥51.0 billion.
• Bullish investors highlight this discount multiple as support for a value angle, yet the valuation data introduces some friction with that view:
  • Despite the low sales multiple, the current share price of ¥1,314 sits above the DCF fair value estimate of ¥1,211.13, so the stock is not cheap on every measure.
  • Forecasts calling for roughly 35 percent annual earnings growth alongside only about 2.4 percent annual revenue growth mean much of the bull case leans on margin improvement rather than top line acceleration.

📊 Read the full Rock FieldLtd Consensus Narrative.

Dividend Coverage Looks Stretched

• The stock offers a 1.83 percent dividend yield, but that payout is flagged as not well covered by either current earnings or free cash flow given that trailing net profit was only ¥119 million on ¥50.9 billion of revenue.
• Critics argue that paying out under these conditions is risky, and the recent history gives them numbers to point to:
  • Trailing earnings growth turned negative versus the prior five year trend and included the ¥276 million one off loss, leaving little room to support distributions.
  • With net margins at just 0.2 percent and three of the last six quarters in the red, any further profit pressure could quickly force management to rethink the current level of dividends.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Rock FieldLtd's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

Explore Alternatives

Rock Field’s wafer thin margins, stretched dividend coverage, and recent loss making quarters highlight how fragile its earnings base currently looks.

If you want companies with more dependable performance, use our stable growth stocks screener (2088 results) to quickly focus on businesses delivering steadier revenue and earnings instead of living with Rock Field’s volatility.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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