LEIFRAS Co., Ltd. (LFS)
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LEIFRAS Co., Ltd. (Nasdaq: LFS) teaches roughly 70,688 children soccer, baseball and basketball at about 4,500 locations across Japan, has been profitable for years and scores a perfect 9 of 9 on the Piotroski test. The same annual report states that the company's disclosure controls and procedures were not effective as of December 31, 2025 — and describes, in its use-of-proceeds paragraph, physical stores, franchise partners and distribution centers that a children's sports school does not own. Sympathy is not an audit, and this is where the two get separated.
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Basics
Performance
Valuation
Profitability
Balance Sheet & Safety
Growth
Quality & Screener
AI Rating
Uses AILeifras verkauft keine KI, setzt sie aber nach eigener Darstellung im Jahresbericht selbst ein — zur Steigerung der betrieblichen Effizienz, für datengestütztes Bewerber-Screening und die Automatisierung von Verwaltungsaufgaben —, und wertet den KI-Boom ausdrücklich als Rückenwind für seine von Menschen erbrachten Sportkurse.
View the full file — quotes, sources, reviewed filings
„We use artificial intelligence (“AI”) to improve operational efficiency."
Wir setzen künstliche Intelligenz („KI“) ein, um die betriebliche Effizienz zu verbessern.
„By using AI and systemization to create operational efficiency, we reinvest resources into people, allowing our instructors to focus on what only humans can provide: empathy, passion, and on-site judgment when interacting with children."
Indem wir mit KI und Systematisierung betriebliche Effizienz schaffen, investieren wir Mittel wieder in Menschen und ermöglichen unseren Trainern, sich auf das zu konzentrieren, was nur Menschen leisten können: Einfühlungsvermögen, Leidenschaft und Urteilsvermögen vor Ort im Umgang mit Kindern.
„As artificial intelligence (“AI”) and digital technologies advance, the relative value of human-centered services continues to rise."
Mit dem Fortschritt künstlicher Intelligenz („KI“) und digitaler Technologien steigt der relative Wert von Dienstleistungen, die den Menschen in den Mittelpunkt stellen, weiter an.
„We plan to also promote operational efficiency using AI and other technologies, creating an environment where employees can focus on core tasks such as coaching and customer service, thereby increasing productivity across the entire group."
Wir planen außerdem, die betriebliche Effizienz mithilfe von KI und anderen Technologien zu steigern und ein Umfeld zu schaffen, in dem sich die Mitarbeiter auf Kernaufgaben wie Training und Kundenbetreuung konzentrieren können, wodurch die Produktivität in der gesamten Gruppe steigt.
Filings Reviewed: 20-F 2026-04-08 · 424B4 2025-10-10 · 6-K 2026-06-18 · 6-K 2026-04-08 · 6-K 2026-03-12 · 6-K 2025-12-18 · 6-K 2025-10-30
Rated on August 1, 2026 · How the Rating Is Built
Highlighted are things our editorial team noticed: green = stands out as strong, red = deserves a closer look. No single metric is a verdict on its own — always read it in context.
Quarterly Figures
| Quarter | EPS (Earnings Per Share) | EPS YoY (%) | Sales (JPY m) | Sales YoY (%) | Net Margin (%) | OCF (JPY m) | FCF (JPY m) |
|---|---|---|---|---|---|---|---|
| 2024: Q2 | – | – | 5,023 | 10.40 | 0.90 | -223 | -235 |
| 2024: Q4 | – | – | 5,836 | 20.70 | 6.80 | 436 | 432 |
| 2025: Q2 | 15.08 | – | 5,311 | 5.70 | 1.00 | 303 | 262 |
| 2025: Q3 | 2.16 | – | 3,067 | 15.70 | 5.60 | 14 | 13 |
| 2025: Q4 | 0.05 | – | 3,172 | -45.60 | 6.80 | 156 | 155 |
| 2026: Q1 | 0.03 | – | 2,954 | 10.00 | 4.20 | -141 | -147 |
- EPS (Earnings Per Share):
- Quarterly profit divided by the total share count — how much of the profit works out to a single share.
- YoY (Year over Year):
- Change versus the same quarter a year ago — this is how you compare without seasonal distortion (e.g. the holiday shopping season).
- Sales:
- All revenue for the quarter, before any costs are deducted — the top line of the income statement.
- Net Margin:
- What percentage of sales is left over as profit in the end. Negative means the company is posting a loss.
- OCF (Operating Cash Flow):
- The cash that actually flows into the till from the core business during the quarter — harder to dress up than book profit.
- FCF (Free Cash Flow):
- Operating cash flow minus capital expenditures — the money that's genuinely free to use, say for paying down debt, buybacks, or dividends.
Assessment: Opportunities & Risks
Management states that "our disclosure controls and procedures were not effective" as of December 31, 2025 on three material weaknesses, none remediated as of the annual report filed 04/08/2026; as an emerging growth company, no outside auditor attests to internal controls. Visible consequences in the same document: three conflicting membership counts, a table of ten people headed "seven individuals," and the subtotal "INCOME BEFORE INCOME TAX POVISION."
Profitable in all three reported years with positive operating cash flow throughout (JPY 677.9 million, JPY 207.1 million, JPY 468.3 million for 2023–2025) and free cash flow of JPY 414.8 million in 2025. Net cash of roughly JPY 2.19 billion at 12/31/2025, equity ratio 39.5%, return on equity 29.2%, Piotroski F-Score 9 of 9 (data as of 08/01/2026).
Revenue rose 13.5% in 2025, but membership was flat at 70,688 (+0.0% versus 70,663) and fell 2.5% to 60,960 in the first quarter of 2026. Growth came from higher fees ("due to higher monthly fees," 6-K of 06/18/2026) and from the government-funded social business (+32.8% revenue), not from more children.
A guidance notice from Hakodate City (October 2024) found over-claimed after-school daycare fees at four Hokkaido facilities for 2023 and 2024; repayments were completed in 2025 with JPY 0.6 million following in January 2026, but a 40% penalty and revocation or suspension of operator designations remain possible per the annual report — in exactly the line expanded by two of the three 2026 acquisitions.
Founder Kiyotaka Ito holds 50.37% (13,176,142 of 26,160,619 shares, 04/08/2026), directors and senior management 52.32% — a "controlled company" under Nasdaq Rule 5615(c). The exemptions are expressly not used, but Japanese home-country practice permits articles under which "there is no quorum requirement for a general resolution of shareholders." Only 8.30% of shares exist as ADSs; 229 holders of record, none in the United States.
2026 guidance ($82.9–95.7 million of revenue, $4.5–5.4 million of operating income) was affirmed 06/18/2026 while explicitly assuming "no business acquisitions" — three closed on 05/01, 06/01 and 07/01/2026. The social business is 27% of revenue and expressly business-to-government; its largest single contract, roughly JPY 2.3 billion from the Japan Sports Agency, was not renewed beyond March 31, 2025.
Leifras is an operationally sound micro cap with an unusually poor paper trail. The business has been profitable every reported year, generated JPY 414.8 million of free cash flow in 2025, carries net cash of roughly JPY 2.19 billion and scores the maximum 9 of 9 on the Piotroski test (data as of 08/01/2026). The same annual report, filed April 8, 2026, states that disclosure controls and procedures were not effective as of December 31, 2025 on three unremediated material weaknesses, describes a use of IPO proceeds belonging to a retail business the company does not operate, calls flat membership a "steady growth rate," and discloses a live regulatory matter carrying a possible 40 percent penalty in the very line being expanded by acquisition. Not investment advice.
- LFS reached our research list through our Reddit attention scanner (social-media attention signal, data as of August 1, 2026) and was then cross-checked against our in-house stock scanner, which returned an unusual combination: Piotroski 9 of 9, return on equity 29.2%, interest coverage 38.07 and equity ratio 39.5%, alongside a price-earnings ratio of 19.8 and a price-to-book of 4.74 (data as of 08/01/2026).
- Recency gate: the most recent interim report evaluated is the Form 6-K filed June 18, 2026 for the period ended March 31, 2026; every mandatory filing through July 1, 2026 was reviewed, and the 6-K of July 1, 2026 (completion of the SWIFT JAPAN acquisition) is the most recent filing of any kind. Leifras is a foreign private issuer and reports on Form 20-F and Form 6-K only.
- Market-value cross-check: 26,160,619 shares (04/08/2026, unchanged since — all three 2026 acquisitions were paid in cash) times $2.38 gives $62.3 million, matching the feed market value of $62.3 million exactly (0% deviation, data as of 08/01/2026).
- The quality light rates the company, not the entry point: the red is a judgment on the reliability of the reporting, not a statement about whether the ADS is cheap or expensive at a price-earnings ratio of roughly 20 and a price-to-sales of roughly 0.8 (data as of 08/01/2026). No analyst consensus exists for this stock.
- Currency note: all revenue and costs arise in yen while the ADSs trade in dollars, with no documented hedging. Dollar figures in this analysis use the rate the filings themselves apply — $1 = JPY 156.80 in the annual report for 2025, $1 = JPY 159.08 in the interim report for the first quarter of 2026 — so dollar amounts are not comparable across the two periods without that adjustment.
About the Company
Leifras Co., Ltd. operates as a sports and social business company in Japan. It operates through two segments, Sports School Business and Social Business segments. The company focuses on providing services related to the operation of sports schools and organization of events for children; selling of sports equipment; managing extracurricular activities in elementary and junior high schools; offering sports therapy for children with developmental disabilities; and providing health exercise guidance for the elderly. It is also involved in the management and operation of sports clubs, sports classes, and cultural classes; extracurricular activities in elementary and junior high schools; sports and healthcare facility management; travel business; and management of after-school childcare facilities. The company's sports schools offer soccer, baseball, basketball, track and field, general beginner sports, rhythmic karate, kendo, tennis, girls' sports, volleyball, cheer dance, dance, and table tennis, as well as multi-discipline sports programs. Leifras Co., Ltd. has a strategic alliance with H & R Produce Distributors Inc. Leifras Co., Ltd. was incorporated in 2001 and is headquartered in Shibuya, Japan.
| IPO Year | 2025 |
|---|
Chart
Interactive price chart (TradingView).
Data as of: August 1, 2026 · Source: fundamental data & SEC filings (annual and quarterly reports, 10-K/10-Q)
Note: pure fact-based analysis, not investment advice and not a solicitation to buy or sell. All figures without guarantee.