TRANSACTIONLtd (TSE:7818) - Share price, News & Analysis

Q: What is the Fair Price of 7818 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

7818 (¥1114) is trading below our estimate of [[fair value]] (¥3007.46)

7818 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	3/6
Past Performance	2/6
Financial Health	6/6
Dividends	5/6

7818 Stock Overview

TRANSACTION CO.,Ltd. plans, designs, manufactures, and sells consumer products in Japan and internationally.

Rewards

Trading at 63% below our estimate of its fair value

Earnings are forecast to grow 13.58% per year

Pays a reliable dividend of 2.15%

Risk Analysis

No risks detected for 7818 from our risk checks.

TRANSACTIONLtd Competitors

S.T

TSE:4951

JP¥33.0b

Niitaka

TSE:4465

JP¥12.6b

Earth

TSE:4985

JP¥116.7b

Pigeon

TSE:7956

JP¥220.1b

Price History & Performance

Summary of all time highs, changes and price drops for TRANSACTIONLtd
Historical stock prices
Current Share Price	JP¥1,114.00
52 Week High	JP¥1,530.00
52 Week Low	JP¥842.00
Beta	0.71
1 Month Change	8.05%
3 Month Change	14.61%
1 Year Change	-22.96%
3 Year Change	22.42%
5 Year Change	-14.83%
Change since IPO	1,659.53%

Shareholder Returns

	7818	JP Household Products	JP Market
7D	2.2%	8.1%	1.9%
1Y	-23.0%	-6.1%	-6.2%

Return vs Industry: 7818 underperformed the JP Household Products industry which returned -6.1% over the past year.

Return vs Market: 7818 underperformed the JP Market which returned -6.2% over the past year.

Price Volatility

Is 7818's price volatile compared to industry and market?
7818 volatility
7818 Average Weekly Movement	4.3%
Household Products Industry Average Movement	3.8%
Market Average Movement	4.2%
10% most volatile stocks in JP Market	8.5%
10% least volatile stocks in JP Market	2.3%

Stable Share Price: 7818 is not significantly more volatile than the rest of JP stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 7818's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1987	453	Satoshi Ishikawa	https://www.trans-action.co.jp

TRANSACTION CO.,Ltd. plans, designs, manufactures, and sells consumer products in Japan and internationally. The company offers event products, such as T-shirts, towels, and penlights; animation or game goods; sales promotion goods; notebooks; bags and tumbler bottles, and stationery or leather accessory, as well as health care and beauty miscellaneous goods products, such as masks and mirror pouches under the MARKLESS STYLE brand; eco bags under the Motteru brand name; belt stopping bags under the gowell brand; and petware and goods under the Calulu brand name.

TRANSACTIONLtd Fundamentals Summary

How do TRANSACTIONLtd's earnings and revenue compare to its market cap?
7818 fundamental statistics
Market Cap	JP¥32.42b
Earnings (TTM)	JP¥1.90b
Revenue (TTM)	JP¥17.10b

17.1x

P/E Ratio

1.9x

P/S Ratio

Is 7818 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
7818 income statement (TTM)
Revenue	JP¥17.10b
Cost of Revenue	JP¥10.45b
Gross Profit	JP¥6.65b
Other Expenses	JP¥4.75b
Earnings	JP¥1.90b

Last Reported Earnings

Feb 28, 2022

Next Earnings Date

Jul 12, 2022

Earnings per share (EPS)	65.32
Gross Margin	38.90%
Net Profit Margin	11.12%
Debt/Equity Ratio	5.1%

How did 7818 perform over the long term?

See historical performance and comparison

Dividends

2.2%

Current Dividend Yield

34%

Payout Ratio

Does 7818 pay a reliable dividends?

See 7818 dividend history and benchmarks

When do you need to buy 7818 by to receive an upcoming dividend?
TRANSACTIONLtd dividend dates
Ex Dividend Date	Aug 30 2022
Dividend Pay Date	Nov 08 2022
Days until Ex dividend	64 days
Days until Dividend pay date	134 days

Does 7818 pay a reliable dividends?

See 7818 dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is 7818 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 7818?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 7818. This is calculated by dividing 7818's market cap by their current preferred multiple.
What is 7818's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥32.42b

7818 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.6x
Enterprise Value/EBITDA	9.4x
PEG Ratio	1.3x

Price to Earnings Ratio vs Peers

How does 7818's PE Ratio compare to its peers?

7818 PE Ratio vs Peers

The above table shows the PE ratio for 7818 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	31.2x
4951 S.T	29.7x	21.7%	JP¥33.0b
4465 Niitaka	49.6x	n/a	JP¥12.6b
4985 Earth	21.9x	9.9%	JP¥116.7b
7956 Pigeon	23.4x	6.6%	JP¥220.1b
7818 TRANSACTIONLtd	17.1x	13.6%	JP¥32.4b

Forward PE

Price-To-Earnings vs Peers: 7818 is good value based on its Price-To-Earnings Ratio (17.1x) compared to the peer average (31.2x).

Price to Earnings Ratio vs Industry

How does 7818's PE Ratio compare vs other companies in the Asian Household Products Industry?

Price-To-Earnings vs Industry: 7818 is good value based on its Price-To-Earnings Ratio (17.1x) compared to the JP Household Products industry average (23.4x)

Price to Earnings Ratio vs Fair Ratio

What is 7818's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

7818 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	17.1x
Fair PE Ratio	17.3x

Price-To-Earnings vs Fair Ratio: 7818 is good value based on its Price-To-Earnings Ratio (17.1x) compared to the estimated Fair Price-To-Earnings Ratio (17.3x).

Share Price vs Fair Value

What is the Fair Price of 7818 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 7818 (¥1114) is trading below our estimate of fair value (¥3007.46)

Significantly Below Fair Value: 7818 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 7818 is poor value based on its PEG Ratio (1.3x)

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Future Growth

How is TRANSACTIONLtd forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

13.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 7818's forecast earnings growth (13.6% per year) is above the savings rate (0.02%).

Earnings vs Market: 7818's earnings (13.6% per year) are forecast to grow faster than the JP market (9% per year).

High Growth Earnings: 7818's earnings are forecast to grow, but not significantly.

Revenue vs Market: 7818's revenue (9.9% per year) is forecast to grow faster than the JP market (4.4% per year).

High Growth Revenue: 7818's revenue (9.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 7818's Return on Equity is forecast to be low in 3 years time (17%).

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Past Performance

How has TRANSACTIONLtd performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

18.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 7818 has high quality earnings.

Growing Profit Margin: 7818's current net profit margins (11.1%) are lower than last year (11.2%).

Past Earnings Growth Analysis

Earnings Trend: 7818's earnings have grown by 18.1% per year over the past 5 years.

Accelerating Growth: 7818's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 7818 had negative earnings growth (-11%) over the past year, making it difficult to compare to the Household Products industry average (-7%).

Return on Equity

High ROE: 7818's Return on Equity (16.1%) is considered low.

Discover strong past performing companies

Financial Health

How is TRANSACTIONLtd's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 7818's short term assets (¥11.3B) exceed its short term liabilities (¥2.3B).

Long Term Liabilities: 7818's short term assets (¥11.3B) exceed its long term liabilities (¥682.0M).

Debt to Equity History and Analysis

Debt Level: 7818 has more cash than its total debt.

Reducing Debt: 7818's debt to equity ratio has reduced from 7% to 5.1% over the past 5 years.

Debt Coverage: 7818's debt is well covered by operating cash flow (403.3%).

Interest Coverage: 7818 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is TRANSACTIONLtd current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.15%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: 7818's dividend (2.15%) is higher than the bottom 25% of dividend payers in the JP market (1.68%).

High Dividend: 7818's dividend (2.15%) is low compared to the top 25% of dividend payers in the JP market (3.74%).

Stability and Growth of Payments

Stable Dividend: 7818's dividends per share have been stable in the past 10 years.

Growing Dividend: 7818's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (33.7%), 7818's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (29.5%), 7818's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.8yrs

Average management tenure

CEO

Satoshi Ishikawa (60 yo)

35.42yrs

Tenure

Mr. Satoshi Ishikawa has been the President of Transaction Co. Ltd. January 1987 and served as its Chief Operating Officer. Mr. Ishikawa Joined Jun Co. Ltd.Resigned Established Transaction Co., Ltd. in A...

Leadership Team

Experienced Management: 7818's management team is seasoned and experienced (5.8 years average tenure).

Board Members

Experienced Board: 7818's board of directors are not considered experienced ( 2.4 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/02/28
Annual Earnings	2021/08/31