On Thursday, Jefferies upgraded Visional Inc (4194:JP) stock from Hold to Buy, increasing the price target from JPY8,700 to JPY9,500. The upgrade reflects a renewed optimism in the company's long-term growth prospects, particularly within its Bizreach platform, which has shown a year-over-year growth of 15%—a robust figure for the human resources sector.
Jefferies analysis suggests that the declining growth trend that investors were previously focused on has ended. He believes that Visional Inc now stands at a compelling valuation, with a price-earnings ratio (PER) of 20 times against Jefferies' forecast for the fiscal year ending in July 2025 (FY7/25) earnings per share (EPS).
Visional's business model, which involves anonymous posting of curricula vitae (CVs) and charging corporations for direct recruitment, is cited as having strong barriers to entry. This aspect of the company's operations is particularly noteworthy as it differentiates Visional from competitors in the HR industry.
The emphasis on direct recruitment over agency business is another key factor in Jefferies' positive outlook. The firm supports Visional's strategy to maintain its unique position in the market against competitive pressures.
The new price target of JPY9,500 is based on a projected 25.7 times multiple of the FY7/25 EPS of JPY369.8, indicating Jefferies' confidence in the company's earnings potential and market position.
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