West Holdings (TSE:1407) - Share price, News & Analysis

Q: What is the Fair Price of 1407 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

1407 (¥4360) is trading below our estimate of [[fair value]] (¥9768.56)

1407 fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	5/6
Past Performance	1/6
Financial Health	4/6
Dividends	2/6

1407 Stock Overview

West Holdings Corporation engages in the renewable energy business.

Rewards

Trading at 55.4% below our estimate of its fair value

Earnings are forecast to grow 40.68% per year

Risk Analysis

Debt is not well covered by operating cash flow

Highly volatile share price over the past 3 months

Large one-off items impacting financial results

Profit margins (5.2%) are lower than last year (8.3%)

West Holdings Competitors

RENOVA

TSE:9519

JP¥213.7b

eREXLtd

TSE:9517

JP¥148.8b

EF-ON

TSE:9514

JP¥11.8b

Kasumigaseki CapitalLtd

TSE:3498

JP¥21.3b

Price History & Performance

Summary of all time highs, changes and price drops for West Holdings
Historical stock prices
Current Share Price	JP¥4,360.00
52 Week High	JP¥6,940.00
52 Week Low	JP¥3,085.00
Beta	0.53
1 Month Change	-0.23%
3 Month Change	-6.44%
1 Year Change	-2.46%
3 Year Change	523.91%
5 Year Change	819.90%
Change since IPO	2,350.69%

Shareholder Returns

	1407	JP Renewable Energy	JP Market
7D	3.2%	-0.6%	0.3%
1Y	-2.5%	-11.3%	-1.8%

Return vs Industry: 1407 exceeded the JP Renewable Energy industry which returned -11.3% over the past year.

Return vs Market: 1407 matched the JP Market which returned -1.8% over the past year.

Price Volatility

Is 1407's price volatile compared to industry and market?
1407 volatility
1407 Average Weekly Movement	8.7%
Renewable Energy Industry Average Movement	7.1%
Market Average Movement	3.9%
10% most volatile stocks in JP Market	8.0%
10% least volatile stocks in JP Market	2.1%

Stable Share Price: 1407 is more volatile than 90% of JP stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: 1407's weekly volatility (9%) has been stable over the past year, but is still higher than 75% of JP stocks.

About the Company

Founded	Employees	CEO	Website
1981	346	Takashi Kikkawa	https://www.west-gr.co.jp

West Holdings Corporation engages in the renewable energy business. It is involved in the installation of residential and industrial solar power generation systems; ground-based and roof-based installations for factories; construction and sales of public and industrial photovoltaic power generation systems; solar power generation and sales activities; management and maintenance business for photovoltaic power generation systems and related equipment; and energy saving services. The company was founded in 1981 and is headquartered in Tokyo, Japan.

West Holdings Fundamentals Summary

How do West Holdings's earnings and revenue compare to its market cap?
1407 fundamental statistics
Market Cap	JP¥177.31b
Earnings (TTM)	JP¥4.09b
Revenue (TTM)	JP¥77.98b

43.4x

P/E Ratio

2.3x

P/S Ratio

Is 1407 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
1407 income statement (TTM)
Revenue	JP¥77.98b
Cost of Revenue	JP¥63.51b
Gross Profit	JP¥14.47b
Other Expenses	JP¥10.38b
Earnings	JP¥4.09b

Last Reported Earnings

May 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	100.52
Gross Margin	18.56%
Net Profit Margin	5.24%
Debt/Equity Ratio	267.6%

How did 1407 perform over the long term?

See historical performance and comparison

Dividends

1.3%

Current Dividend Yield

50%

Payout Ratio

Does 1407 pay a reliable dividends?

See 1407 dividend history and benchmarks

When do you need to buy 1407 by to receive an upcoming dividend?
West Holdings dividend dates
Ex Dividend Date	Aug 30 2022
Dividend Pay Date	Nov 29 2022
Days until Ex dividend	19 days
Days until Dividend pay date	110 days

Does 1407 pay a reliable dividends?

See 1407 dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is 1407 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

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

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 1407?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 1407. This is calculated by dividing 1407's market cap by their current preferred multiple.
What is 1407's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥177.31b

1407 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	2.7x
Enterprise Value/EBITDA	23.1x
PEG Ratio	1.1x

Price to Earnings Ratio vs Peers

How does 1407's PE Ratio compare to its peers?

1407 PE Ratio vs Peers

The above table shows the PE ratio for 1407 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	27.6x
9519 RENOVA	43.5x	6.7%	JP¥213.7b
9517 eREXLtd	15.4x	3.5%	JP¥148.8b
9514 EF-ON	11.2x	30.1%	JP¥11.8b
3498 Kasumigaseki CapitalLtd	40.4x	n/a	JP¥21.3b
1407 West Holdings	43.4x	40.7%	JP¥177.3b

Price-To-Earnings vs Peers: 1407 is expensive based on its Price-To-Earnings Ratio (43.4x) compared to the peer average (27.6x).

Price to Earnings Ratio vs Industry

How does 1407's PE Ratio compare vs other companies in the Asian Renewable Energy Industry?

Price-To-Earnings vs Industry: 1407 is expensive based on its Price-To-Earnings Ratio (43.4x) compared to the JP Renewable Energy industry average (15.2x)

Price to Earnings Ratio vs Fair Ratio

What is 1407'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.

1407 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	43.4x
Fair PE Ratio	28.3x

Price-To-Earnings vs Fair Ratio: 1407 is expensive based on its Price-To-Earnings Ratio (43.4x) compared to the estimated Fair Price-To-Earnings Ratio (28.3x).

Share Price vs Fair Value

What is the Fair Price of 1407 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 1407 (¥4360) is trading below our estimate of fair value (¥9768.56)

Significantly Below Fair Value: 1407 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is West Holdings forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

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

40.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1407's forecast earnings growth (40.7% per year) is above the savings rate (0.04%).

Earnings vs Market: 1407's earnings (40.7% per year) are forecast to grow faster than the JP market (8.3% per year).

High Growth Earnings: 1407's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 1407's revenue (16.4% per year) is forecast to grow faster than the JP market (4.4% per year).

High Growth Revenue: 1407's revenue (16.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 1407's Return on Equity is forecast to be high in 3 years time (27.9%)

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Past Performance

How has West Holdings performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

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

23.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 1407 has a large one-off loss of ¥1.5B impacting its May 31 2022 financial results.

Growing Profit Margin: 1407's current net profit margins (5.2%) are lower than last year (8.3%).

Past Earnings Growth Analysis

Earnings Trend: 1407's earnings have grown significantly by 23.8% per year over the past 5 years.

Accelerating Growth: 1407's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1407 had negative earnings growth (-18.4%) over the past year, making it difficult to compare to the Renewable Energy industry average (53.6%).

Return on Equity

High ROE: 1407's Return on Equity (17.2%) is considered low.

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Financial Health

How is West Holdings's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

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

Financial Position Analysis

Short Term Liabilities: 1407's short term assets (¥79.8B) exceed its short term liabilities (¥31.1B).

Long Term Liabilities: 1407's short term assets (¥79.8B) exceed its long term liabilities (¥45.4B).

Debt to Equity History and Analysis

Debt Level: 1407's net debt to equity ratio (143.7%) is considered high.

Reducing Debt: 1407's debt to equity ratio has reduced from 313.9% to 267.6% over the past 5 years.

Debt Coverage: 1407's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 1407's interest payments on its debt are well covered by EBIT (16.2x coverage).

Balance Sheet

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Dividend

What is West Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.26%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: 1407's dividend (1.26%) isn’t notable compared to the bottom 25% of dividend payers in the JP market (1.63%).

High Dividend: 1407's dividend (1.26%) is low compared to the top 25% of dividend payers in the JP market (3.63%).

Stability and Growth of Payments

Stable Dividend: 1407's dividend payments have been volatile in the past 10 years.

Growing Dividend: 1407's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (49.7%), 1407's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 1407 is paying a dividend but the company has no free cash flows.

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Management

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

9.7yrs

Average board tenure

CEO

Takashi Kikkawa (72 yo)

no data

Tenure

JP¥113,000,000

Compensation

Mr. Takashi Kikkawa serves as the Chief Executive Officer of West Holdings Corporation Mr. Kikkawa served as President of Ligitek Japan Co., Ltd. since October 2010. Mr. Kikkawa established Nishi Nihon Kan...

CEO Compensation Analysis

Compensation vs Market: Insufficient data to establish whether Takashi's total compensation is reasonable compared to companies of similar size in the JP market.

Compensation vs Earnings: Takashi's compensation has been consistent with company performance over the past year.

Board Members

Experienced Board: 1407's board of directors are considered experienced (9.7 years average tenure).

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	2022/08/10 00:00
End of Day Share Price	2022/08/10 00:00
Earnings	2022/05/31
Annual Earnings	2021/08/31