Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> reported 2QFY03/2025 results on Monday which saw strong improvement in earnings with a beat. The company also revised its full-year guidance upwards.</li>
<li>The labour markets globally have continued to trend downwards, particularly in the US while web traffic on Indeed and Glassdoor has fallen significantly.</li>
<li>• Recruit’s monetisation efforts coupled with measures to reduce costs have paid off, however, we don’t expect labour markets to improve anytime soon, posing significant threat.</li>
</ul>



Recruit Holdings (6098 JP) reported 2QFY03/2025 results on Monday which saw strong improvement in earnings with a beat. The company also revised its full-year guidance upwards.
The labour markets globally have continued to trend downwards, particularly in the US while web traffic on Indeed and Glassdoor has fallen significantly.
• Recruit’s monetisation efforts coupled with measures to reduce costs have paid off, however, we don’t expect labour markets to improve anytime soon, posing significant threat.


Recruit Holdings: Another Quarter of Strong Earnings Despite Labour Markets Trending Downwards

<ul>
<li>
<a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> ’s share price has been up more than 40% YTD driven by better-than-expected earnings and an announcement to buy back ¥600bn worth shares.</li>
<li>The company’s 1Q earnings beat consensus and showed some recovery across all business segments, however, the labour markets are heading towards a decline.</li>
<li>It seems that the company has run out of investment options, and we would not rush to make an entry as worst is not over yet for the company.</li>
</ul>



Recruit Holdings (6098 JP) ’s share price has been up more than 40% YTD driven by better-than-expected earnings and an announcement to buy back ¥600bn worth shares.
The company’s 1Q earnings beat consensus and showed some recovery across all business segments, however, the labour markets are heading towards a decline.
It seems that the company has run out of investment options, and we would not rush to make an entry as worst is not over yet for the company.


Recruit: Labour Markets Continue to Trend Down, but Recruit’s Efforts Pay Off in 1Q

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Last month, Reuters reported that activist-ish investor Value Act Capital Management had bought a stake in <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> and separately in <a href="https://www.smartkarma.com/entities/expedia-group-inc" target="_blank" data-smartkarma-citation="entities:6669:1" rel="noopener">Expedia Group, Inc. (EXPE US)</a>). </li>
<li>It was "revealed" in a letter to its clients. And there were reasons stated why Value Act thought Recruit was worth a lot more than it was trading for. </li>
<li>Today, Recruit announced an on-market buyback for ¥200bn. That's nice. But it is not enormous, and it may signal other info, and it is worth understanding details and context.</li>
</ul>


Last month, Reuters reported that activist-ish investor Value Act Capital Management had bought a stake in Recruit Holdings (6098 JP) and separately in Expedia Group, Inc. (EXPE US)). 
It was "revealed" in a letter to its clients. And there were reasons stated why Value Act thought Recruit was worth a lot more than it was trading for. 
Today, Recruit announced an on-market buyback for ¥200bn. That's nice. But it is not enormous, and it may signal other info, and it is worth understanding details and context.


Recruit (6098 JP) Buyback - It's Big But Not THAT Big; Value Act Effect Vs Corp Selldown Vs Multiple

<ul>
<li>Last December, <a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> announced a ¥200bn buyback which sounded big but with lots of cross-holders, wasn't huge. The stock is up 80% in 6+ months since.</li>
<li>Today, the company announced a new buyback of ¥600bn. This is very aggressive, and at 25x EBITDA and 40x PER, is probably due to demand to sell. </li>
<li>Crossholders now hold ¥2trln which is three-plus times this buyback. And if the price were to rise 10% a year for 3yrs, it would be four times.</li>
</ul>


Last December, Recruit Holdings (6098 JP) announced a ¥200bn buyback which sounded big but with lots of cross-holders, wasn't huge. The stock is up 80% in 6+ months since.
Today, the company announced a new buyback of ¥600bn. This is very aggressive, and at 25x EBITDA and 40x PER, is probably due to demand to sell. 
Crossholders now hold ¥2trln which is three-plus times this buyback. And if the price were to rise 10% a year for 3yrs, it would be four times.


Recruit (6098 JP) - BIG Headline Buyback But Disappointing if That Is Best Use Of Cash

<ul>
<li>
<a href="https://www.smartkarma.com/entities/recruit-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:15070:1" rel="noopener">Recruit Holdings (6098 JP)</a> reported 4Q and full-year FY03/2024 results today. Earnings beat own guidance as well as consensus estimates.</li>
<li>Weakening labour markets have negatively impacted all business segments and new pricing model for Indeed has not really been successful.</li>
<li>Recruit expects a recovery in 2HFY03/2025, but at the rate at which job openings are going down, we remain cautious.</li>
</ul>



Recruit Holdings (6098 JP) reported 4Q and full-year FY03/2024 results today. Earnings beat own guidance as well as consensus estimates.
Weakening labour markets have negatively impacted all business segments and new pricing model for Indeed has not really been successful.
Recruit expects a recovery in 2HFY03/2025, but at the rate at which job openings are going down, we remain cautious.


Recruit: As We Said… Weakening Earnings

Japan

Recruit Holdings Co. Ltd. operates information providing services in human resource, housing, bridal, travel, restaurants, beauty, automobiles, and education and more. The company also operate staffing services and advertising business.

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Recruit Holdings (6098 JP)

Recruit: Labour Markets Continue to Trend Down, but Recruit’s Efforts Pay Off in 1Q

Recruit's share price is up more than 40% YTD driven by better than expected earnings and share buyback. Labour markets globally are heading...

Shifara Samsudeen, ACMA, CGMA

Recruit (6098 JP) Buyback - It's Big But Not THAT Big; Value Act Effect Vs Corp Selldown Vs Multiple

Recruit has announced a ¥200bn buyback. Last year's market buyback was ¥150bn. This is NOT "Value Act Effect" but it may be taken as such. That...

Travis Lundy

Recruit (6098 JP) - BIG Headline Buyback But Disappointing if That Is Best Use Of Cash

Dentsu just announced a ¥600bn buyback. That is huge in yen terms but Recruit has a lot of cash to offset large crossholder selling interest....

Travis Lundy

Recruit: As We Said… Weakening Earnings

Recruit's earnings beat consensus, but all three segments are expected to see further slowdown with weakening labor markets. As expected new...

Shifara Samsudeen, ACMA, CGMA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Recruit Holdings: Another Quarter of Strong Earnings Despite Labour Markets Trending Downwards

​Recruit's 2Q earnings beat expectations and raised full-year guidance. Global labor market trends downwards, however, Recruit's monetisation...

Shifara Samsudeen, ACMA, CGMA

Recruit: Labour Markets Continue to Trend Down, but Recruit’s Efforts Pay Off in 1Q

​Recruit's share price is up more than 40% YTD driven by better than expected earnings and share buyback. Labour markets globally are heading...

Shifara Samsudeen, ACMA, CGMA

Recruit (6098 JP) Buyback - It's Big But Not THAT Big; Value Act Effect Vs Corp Selldown Vs Multiple

Recruit has announced a ¥200bn buyback. Last year's market buyback was ¥150bn. This is NOT "Value Act Effect" but it may be taken as such. That...

Travis Lundy

Recruit (6098 JP) - BIG Headline Buyback But Disappointing if That Is Best Use Of Cash

Dentsu just announced a ¥600bn buyback. That is huge in yen terms but Recruit has a lot of cash to offset large crossholder selling interest....

Travis Lundy

Recruit: As We Said… Weakening Earnings

​Recruit's earnings beat consensus, but all three segments are expected to see further slowdown with weakening labor markets. As expected new...

Shifara Samsudeen, ACMA, CGMA

Recruit's 2Q earnings beat expectations and raised full-year guidance. Global labor market trends downwards, however, Recruit's monetisation...

Recruit's share price is up more than 40% YTD driven by better than expected earnings and share buyback. Labour markets globally are heading...

Recruit's earnings beat consensus, but all three segments are expected to see further slowdown with weakening labor markets. As expected new...