Nomura Holdings (NMR) AI Stock Analysis

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Nomura Holdings

(NYSE:NMR)

59Neutral

Nomura Holdings exhibits strong earnings growth and operational efficiency, complemented by a positive earnings call. However, high leverage and negative cash flow present significant risks. The stock's undervaluation and attractive dividend yield are positive, but technical indicators suggest caution due to prevailing bearish trends.

Nomura Holdings (NMR) vs. S&P 500 (SPY)

Market Cap

$14.80B

Dividend Yield4.9%

Average Volume (3M)784.20K

Price to Earnings (P/E)7.8

Beta (1Y)1.45

Revenue Growth19.73%

EPS Growth170.41%

CountryUS

Employees26,850

SectorFinancial

Sector Strength86

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)0.70

Shares Outstanding3,163,562,500

10 Day Avg. Volume1,249,073

30 Day Avg. Volume784,199

Financial Highlights & Ratios

PEG Ratio0.05

Price to Book (P/B)N/A

Price to Sales (P/S)2.03

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusHold

Number of Analyst Covering1

Nomura Holdings Business Overview & Revenue Model

Company DescriptionNomura Holdings, Inc. is a leading global financial services group headquartered in Tokyo, Japan. Founded in 1925, the company operates through three primary business segments: Retail, Asset Management, and Wholesale. Nomura provides a wide range of services including investment banking, brokerage, wealth management, and financial advisory. It serves a diverse clientele that includes individuals, institutions, corporations, and governments worldwide, offering solutions tailored to meet their financial needs and objectives.

How the Company Makes MoneyNomura Holdings generates revenue through its three main business segments. The Retail segment earns income by providing brokerage services, financial advice, and wealth management solutions to individual investors. The Asset Management segment generates fees by managing client assets across various investment strategies, catering to both institutional and retail investors. The Wholesale segment, which includes Global Markets and Investment Banking, makes money through trading activities, underwriting, and advisory services related to mergers and acquisitions, capital raising, and risk management. In addition to these core activities, Nomura leverages strategic partnerships and joint ventures to expand its global reach and enhance its service offerings, further contributing to its revenue streams.

Nomura Holdings Financial Statement Overview

Summary

Nomura Holdings shows robust revenue growth and operational efficiency, with a strong EBIT margin. However, high leverage and negative free cash flow pose risks, alongside challenges in cash generation. The company needs to address cost issues reflected in the negative gross profit margin to enhance its financial health.

Income Statement

Positive

The revenue growth rate from 2023 to 2024 is 35.78%. However, the gross profit margin is negative, indicating significant cost issues. The net profit margin improved but remains low at 10.62% for 2024. The EBIT margin is strong at 50.93%, suggesting good operational efficiency.

Balance Sheet

Neutral

The debt-to-equity ratio is high at 4.21, indicating significant leverage. The equity ratio is low at 6.07%, reflecting a thin equity buffer. The return on equity is moderate at 4.95%, showing adequate profitability relative to equity.

Cash Flow

Neutral

Free cash flow is negative, reflecting cash outflows exceeding inflows. The operating cash flow to net income ratio is low at 0.80, indicating potential issues in cash generation relative to profit. The free cash flow to net income ratio is negative, signaling potential liquidity concerns.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
3.09T	1.56T	1.15T	1.14T	1.24T	1.07T
	Gross Profit
77.56B	-1.23T	-181.27B	748.88B	853.11B	238.44B
	EBIT
328.53B	795.54B	1.30T	453.19B	223.39B	245.89B
	EBITDA
882.49B	0.00	0.00	0.00	0.00	0.00
	Net Income Common Stockholders
211.47B	165.86B	92.79B	143.00B	153.12B	217.00B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.35T	4.24T	4.52T	3.64T	4.16T	3.87T
	Total Assets
32.23T	55.15T	47.77T	43.41T	42.52T	44.00T
	Total Debt
8.50T	14.09T	11.74T	10.90T	9.94T	10.17T
	Net Debt
7.15T	8.93T	7.22T	6.84T	5.78T	6.30T
	Total Liabilities
30.10T	51.70T	44.55T	40.44T	39.76T	41.27T
	Stockholders Equity
2.13T	3.35T	3.15T	2.91T	2.69T	2.65T
Cash Flow		Free Cash Flow
466.93B	-13.14B	-1.15T	-1.48T	545.89B	-222.69B
	Operating Cash Flow
591.09B	132.64B	-974.75B	-1.37T	665.77B	-15.94B
	Investing Cash Flow
-1.19T	-887.94B	38.95B	-45.30B	-139.03B	216.34B
	Financing Cash Flow
793.38B	1.01T	1.29T	1.07T	-269.93B	332.06B

Nomura Holdings Technical Analysis

Technical Analysis Sentiment

Negative

Last Price5.31

Price Trends

50DMA

6.37

Negative

100DMA

6.16

Negative

200DMA

5.88

Negative

Market Momentum

MACD

-0.03

Positive

RSI

37.36

Neutral

STOCH

12.92

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NMR, the sentiment is Negative. The current price of 5.31 is below the 20-day moving average (MA) of 6.08, below the 50-day MA of 6.37, and below the 200-day MA of 5.88, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 37.36 is Neutral, neither overbought nor oversold. The STOCH value of 12.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NMR.

Nomura Holdings Risk Analysis

Nomura Holdings disclosed 25 risk factors in its most recent earnings report. Nomura Holdings reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Nomura Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LPLA	76 Outperform	$24.11B	21.48	42.26%	0.40%	23.20%	2.38%
MS	70 Outperform	$180.16B	14.06	13.88%	3.40%	7.16%	53.77%
GS	70 Outperform	$160.64B	12.75	11.95%	2.40%	14.80%	77.97%
RJF	69 Neutral	$27.93B	13.31	19.07%	1.40%	13.79%	28.57%
Sector *	64 Neutral	$13.21B	9.26	9.39%	4.87%	16.14%	-8.87%
JEF	60 Neutral	$8.77B	14.74	6.38%	3.29%	16.62%	139.24%
NMR	59 Neutral	$14.80B	7.82	9.35%	4.90%	19.73%	170.41%

* Financial Sector Average

Performance Comparison

NMR

Nomura Holdings

5.31

-0.80

-13.09%

JEF

Jefferies

42.76

1.90

4.65%

LPLA

LPL Financial

311.42

51.49

19.81%

Morgan Stanley

108.12

24.70

29.61%

RJF

Raymond James Financial

135.33

14.50

12.00%

Goldman Sachs Group

494.44

113.36

29.75%

Nomura Holdings Earnings Call Summary

Earnings Call Date: Feb 5, 2025 | % Change Since: -17.80% | Next Earnings Date: Apr 25, 2025

Earnings Call Sentiment Positive

The earnings call reflects a largely positive outlook, with significant profit growth, strong international operations, and record achievements in investment management and asset management. However, there are some challenges, including declines in specific segments and increased costs.

Highlights

Record Profit Growth

The company reported a 3% increase in net income to JPY101.4 billion, marking the seventh straight quarter of profit growth.

International Operations Success

International regions reported income before income taxes of JPY51.8 billion, a 30% increase over the last quarter, accounting for nearly 40% of group-wide income before income taxes.

Investment Management Achievements

Assets under management reached a record high of JPY93.5 trillion, with business revenue also at its highest level since the division's establishment.

Strong Wholesale Performance

Net revenue in wholesale increased by 10% to JPY290.5 billion, with global markets revenues increasing for the seventh straight quarter.

Asset Management Milestones

Net inflow for asset management was JPY260 billion, with alternative assets under management rising past JPY2.5 trillion, an increase of JPY400 billion in three months.

Commemorative Dividend Announcement

A commemorative dividend of JPY10 per share will be paid to shareholders as of March 31, 2025, in celebration of Nomura's 100th anniversary.

Lowlights

Investment Management Revenue Decline

Net revenue in investment management decreased by 18%, and income before income taxes fell 41% to JPY18.9 billion due to a decline in valuation gains related to American Century Investments.

Cost Increases

Group-wide expenses rose 4% to JPY363.7 billion, with compensation and benefits increasing by 3% due to an increase in stock-based compensation.

Wealth Management Product Sales Decline

Total sales by product decreased by 11% quarter-on-quarter to JPY5.2 trillion, with sales of stocks falling by 12%.

Company Guidance

In the recent conference call, Nomura Holdings provided guidance on their financial performance for the third quarter of the fiscal year ending March 2025. The group-wide net revenue increased by 4% quarter-on-quarter to JPY502 billion, while income before income taxes also grew by 4% to JPY138.3 billion. Net income rose to JPY101.4 billion, marking a 3% increase over the previous quarter, and earnings per share (EPS) reached JPY33.08. The annualized return on equity (ROE) was 11.8%, indicating a continued streak of profit growth for the seventh consecutive quarter. Notably, the international business contributed significantly, accounting for nearly 40% of group-wide income before income taxes, with income from international regions increasing by 30% to JPY51.8 billion. The effective tax rate fell to 25% due to the utilization of tax loss carryforwards by some international entities. Nomura also highlighted their strategic focus on improving profitability in international operations and diversifying revenue sources, with substantial contributions from their digital assets subsidiary, Laser Digital.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.