# Mercari (4385.JP)

Canonical: https://gigainvestors.com/s/4385.JP

Analysis as of: 2026-10-15T07:10:16.459Z. Financial observations: FY2016–FY2026.

Listing currency: JPY. Reporting currency: JPY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: JPY 3,708.00 per share; close as of 2026-10-15.

Estimated value: low JPY 2,565.89 per share, central JPY 3,198.89 per share, high JPY 3,567.49 per share. Buy at or below the central value JPY 3,198.89 per share. Valuation as of 2026-10-15T07:10:16.459Z; scenarios are not confidence intervals.

Expected annual return: 8.7% at the stated quote. About 8.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; JP 10-year bond 2.9% + 4 points).

## Checklist

### understandable: fail

- 0 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- negative average operating margin

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 5

- Operating margin variation: 7.92×

Chart: Operating margin; fiscal year observations.

- FY2017: -0.13×

- FY2018: -0.12×

- FY2019: -0.24×

- FY2020: -0.25×

- FY2021: 0.05×

- FY2022: -0.03×

- FY2023: 0.10×

- FY2024: 0.09×

- FY2025: 0.14×

- FY2026: 0.19×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 0.7%

- ROIC, second-lowest year: -9.3%

- Typical minus recent gross margin: 1.5 pp

- Typical gross margin (annual median): 73.3%

- Recent gross margin (lower of latest and 3-year median): 71.8%

- Years with nonpositive capital: 6

- Capital spending / revenue: 0.8%

- ROIC including acquisitions, ten-year median: 17.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: -8.2%

- FY2018: -4.2%

- FY2019: -9.3%

- FY2020: -17.5%

- FY2021: 3.1%

- FY2022: -1.7%

- FY2023: >100%

- FY2024: 18.9%

- FY2025: 16.5%

- FY2026: 15.5%

### economics: fail

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 0.96×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: JPY 77B

- Net income, five-year total: JPY 81B

- Working capital / revenue, annual change: 32.2 pp

- Working capital / revenue, change between three-year averages: 213.7 pp

- Working capital / revenue, final three-year average: 122.5%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 0.98×

- FY2023: 1.02×

- FY2024: 1.04×

- FY2025: 0.98×

- FY2026: 0.90×

### management: pass

- Historical market-dollar context (not the management verdict): 2019 to 2026 (7 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: -8.2% vs 16.5%

- Per-share earnings: -36.65 to 159.05 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 4.2%

- Ordinary dilution, 5-year annual growth: 1.0%

- Market cap gain: JPY 260B

- Cumulative retained earnings: JPY 62B

- Diluted shares, 10-year annual growth: 4.2%

- Diluted shares, 5-year annual growth: 1.0%

- $1 test, starting fiscal year: FY2019

- $1 test, ending fiscal year: FY2026

- Per-share value change: JPY 195.70

- Per-share value, starting three-year median: JPY -36.65

- Per-share value, ending three-year median: JPY 159.05

- Buyback history: 0 years

- Debt-funded buybacks: No

- Cumulative net income, 10 years: JPY 38B

- ROIC, first three-year median: -8.2%

- ROIC, last three-year median: 16.5%

Chart: Earnings per share; fiscal year observations.

- FY2017: JPY -36.65

- FY2018: JPY -60.61

- FY2019: JPY -94.98

- FY2020: JPY -147.86

- FY2021: JPY 36.43

- FY2022: JPY -47.34

- FY2023: JPY 81.28

- FY2024: JPY 82.48

- FY2025: JPY 159.05

- FY2026: JPY 214.74

### accounting: fail

- earnings not backed by cash

- Sloan accruals: 6.2%

- Receivables to sales index (DSRI): 1.20×

- Restructuring years, last five: 0

- Earnings backed by cash: No

- Operating cash / earnings: -0.27×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.03×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -19.4%

- FY2018: -3.1%

- FY2019: -4.0%

- FY2020: -17.8%

- FY2021: 0.9%

- FY2022: 5.4%

- FY2023: 11.7%

- FY2024: 11.3%

- FY2025: 7.0%

- FY2026: 6.2%

## Holders

## Price story

Down 46% since Nov 2021 · sales +19%

Story as of 2026-10-16T10:00:14.158Z; price observation 2026-10-15.

Price needs cash profits to grow 9.2% a year for ten years

### Sales · FY2025–2026

sales +19%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100Z2BE.pdf; observed 2026-09-17.

- FY2017: JPY 22B 

- FY2018: JPY 36B 

- FY2019: JPY 52B 

- FY2020: JPY 76B 

- FY2021: JPY 106B 

- FY2022: JPY 147B 

- FY2023: JPY 172B 

- FY2024: JPY 187B 

- FY2025: JPY 193B 

- FY2026: JPY 229B 

### Gross margin · FY2026

gross margin 73.7%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100Z2BE.pdf; observed 2026-09-17.

- FY2017: 87.7% 

- FY2018: 81.0% 

- FY2019: 75.1% 

- FY2020: 72.9% 

- FY2021: 77.1% 

- FY2022: 64.7% 

- FY2023: 66.3% 

- FY2024: 69.2% 

- FY2025: 71.8% 

- FY2026: 73.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Annual sales are JPY 229.3 billion.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100Z2BE.pdf (filed 2026-09-17); FY2026: revenue 229293000000; grossProfit 168906000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 69.2% to 73.7% during 2024–26; it earns 0.7% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-09-17); FY2024: grossProfit / revenue = 69.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-09-17); FY2025: grossProfit / revenue = 71.8%.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100Z2BE.pdf (filed 2026-09-17); FY2026: grossProfit / revenue = 73.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-09-17); 10-year return on capital observations [[2017,-0.08178511471740348],[2018,-0.04186747204544637],[2019,-0.09260265910231176],[2020,-0.1748572214643541],[2021,0.03057463546534312],[2022,-0.016813517957296638],[2023,1.3489844721307631],[2024,0.18852019927822297],[2025,0.1650767381099272],[2026,0.15485196270645057]]; median 0.006880558754023242. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 1.2% of cash earnings on expansion; paid no dividends in 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-09-17); FY2021: growth capex 0; upkeep 420000000; owner earnings 6145000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-09-17); FY2023: growth capex 0; upkeep 580000000; owner earnings 13434000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-09-17); FY2024: growth capex 0; upkeep 155000000; owner earnings 13936000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-09-17); FY2025: growth capex 0; upkeep 1163000000; owner earnings 25470000000. Growth capex / owner earnings = 0.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100Z2BE.pdf (filed 2026-09-17); FY2026: growth capex 378770179.8178644; upkeep 4720229820.182136; owner earnings 32004770179.817863. Growth capex / owner earnings = 0.011834803927344432.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-09-17); Dividend observations: [[2017,0],[2018,0],[2019,0],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0],[2026,0]]. Zero only counted when supported by a complete cash-flow statement.

### What the price says

The price assumes cash profits grow 9.2% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-09-17); Ten-year compound average after fade. Initial solved rate 0.11946246273524264. Price 3708; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03.  Closing-price date 2026-10-15.

## Monthly share-price history (JPY per share)

- 2018-07: JPY 4,710.00 per share

- 2018-08: JPY 3,700.00 per share

- 2018-09: JPY 3,755.00 per share

- 2018-10: JPY 2,856.00 per share

- 2018-11: JPY 2,725.00 per share

- 2018-12: JPY 1,842.00 per share

- 2019-01: JPY 2,301.00 per share

- 2019-02: JPY 3,120.00 per share

- 2019-03: JPY 3,400.00 per share

- 2019-04: JPY 3,435.00 per share

- 2019-05: JPY 3,200.00 per share

- 2019-06: JPY 2,858.00 per share

- 2019-07: JPY 2,931.00 per share

- 2019-08: JPY 2,485.00 per share

- 2019-09: JPY 2,685.00 per share

- 2019-10: JPY 2,451.00 per share

- 2019-11: JPY 2,414.00 per share

- 2019-12: JPY 2,235.00 per share

- 2020-01: JPY 1,923.00 per share

- 2020-02: JPY 2,443.00 per share

- 2020-03: JPY 2,100.00 per share

- 2020-04: JPY 2,713.00 per share

- 2020-05: JPY 3,210.00 per share

- 2020-06: JPY 3,330.00 per share

- 2020-07: JPY 4,420.00 per share

- 2020-08: JPY 4,810.00 per share

- 2020-09: JPY 4,850.00 per share

- 2020-10: JPY 4,400.00 per share

- 2020-11: JPY 4,780.00 per share

- 2020-12: JPY 4,575.00 per share

- 2021-01: JPY 5,040.00 per share

- 2021-02: JPY 5,120.00 per share

- 2021-03: JPY 5,020.00 per share

- 2021-04: JPY 5,400.00 per share

- 2021-05: JPY 5,190.00 per share

- 2021-06: JPY 5,900.00 per share

- 2021-07: JPY 5,720.00 per share

- 2021-08: JPY 5,440.00 per share

- 2021-09: JPY 6,160.00 per share

- 2021-10: JPY 6,150.00 per share

- 2021-11: JPY 6,890.00 per share

- 2021-12: JPY 5,860.00 per share

- 2022-01: JPY 4,270.00 per share

- 2022-02: JPY 3,550.00 per share

- 2022-03: JPY 3,225.00 per share

- 2022-04: JPY 2,210.00 per share

- 2022-05: JPY 2,129.00 per share

- 2022-06: JPY 1,950.00 per share

- 2022-07: JPY 2,285.00 per share

- 2022-08: JPY 2,280.00 per share

- 2022-09: JPY 1,934.00 per share

- 2022-10: JPY 2,475.00 per share

- 2022-11: JPY 2,811.00 per share

- 2022-12: JPY 2,699.00 per share

- 2023-01: JPY 2,799.00 per share

- 2023-02: JPY 2,418.00 per share

- 2023-03: JPY 2,309.00 per share

- 2023-04: JPY 2,318.00 per share

- 2023-05: JPY 2,852.00 per share

- 2023-06: JPY 3,359.00 per share

- 2023-07: JPY 3,596.00 per share

- 2023-08: JPY 3,318.00 per share

- 2023-09: JPY 3,226.00 per share

- 2023-10: JPY 3,001.00 per share

- 2023-11: JPY 2,829.50 per share

- 2023-12: JPY 2,612.50 per share

- 2024-01: JPY 2,464.00 per share

- 2024-02: JPY 2,041.50 per share

- 2024-03: JPY 1,973.00 per share

- 2024-04: JPY 1,842.50 per share

- 2024-05: JPY 1,833.00 per share

- 2024-06: JPY 1,997.50 per share

- 2024-07: JPY 2,235.00 per share

- 2024-08: JPY 2,373.50 per share

- 2024-09: JPY 2,507.00 per share

- 2024-10: JPY 2,159.50 per share

- 2024-11: JPY 1,947.50 per share

- 2024-12: JPY 1,793.00 per share

- 2025-01: JPY 1,888.50 per share

- 2025-02: JPY 2,339.00 per share

- 2025-03: JPY 2,355.00 per share

- 2025-04: JPY 2,299.50 per share

- 2025-05: JPY 2,392.50 per share

- 2025-06: JPY 2,674.00 per share

- 2025-07: JPY 2,330.50 per share

- 2025-08: JPY 2,501.00 per share

- 2025-09: JPY 2,276.00 per share

- 2025-10: JPY 2,281.50 per share

- 2025-11: JPY 2,655.00 per share

- 2025-12: JPY 3,170.00 per share

- 2026-01: JPY 3,428.00 per share

- 2026-02: JPY 3,675.00 per share

- 2026-03: JPY 3,671.00 per share

- 2026-04: JPY 3,774.00 per share

- 2026-05: JPY 4,239.00 per share

- 2026-06: JPY 4,090.00 per share

- 2026-07: JPY 4,290.00 per share

- 2026-08: JPY 4,633.00 per share

- 2026-09: JPY 3,604.00 per share

- 2026-10: JPY 3,678.00 per share

## Annual estimated value (JPY per share)

- FY2024: low JPY 1,880.30 per share, central JPY 1,980.51 per share, high JPY 2,113.92 per share

- FY2025: low JPY 1,825.64 per share, central JPY 1,957.12 per share, high JPY 2,132.15 per share

- FY2026: low JPY 2,565.89 per share, central JPY 3,198.89 per share, high JPY 3,567.49 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original EDINET filing](https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100Z2BE.pdf); period 2026-06-30, filed 2026-09-17.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations