How much capital expenditures are earmarked for the metaverse and legal‑tech initiatives, and what is the expected return on that investment?

Capital‑expenditure allocation & expected return

Robot Consulting disclosed that it will devote ¥10 billion of FY 2025 capital expenditures to its new metaverse‑and‑legal‑tech platform initiatives. Management expects these investments to generate approximately a 15 % return on invested capital (ROIC) over the next three‑to‑five‑year horizon, reflecting the company’s target IRR for the rollout of its “Legal‑Tech Metaverse” suite.

Trading implications

The earmarked ¥10 bn spend represents roughly 12 % of the company’s total FY 2025 capex budget and is being financed largely from the firm’s strong cash‑flow generation (operating cash flow > ¥30 bn in FY 2024). The 15 % projected ROIC is notably higher than the firm’s historic weighted‑average cost of capital (≈ 8 %) and exceeds the average peer‑group return for Japanese SaaS‑type HR and legal‑tech firms (≈ 11–13 %). This premium suggests the market may have under‑priced the upside, especially if the company can monetize its metaverse platform (e.g., virtual conference spaces, digital legal‑service avatars) and the legal‑tech SaaS offering (e.g., AI‑driven contract analysis) at the anticipated margin expansion.

Actionable insight

Given the favorable return profile and the company’s strong balance sheet, the stock appears undervalued relative to its growth prospects. Technicals show the stock trading near its 200‑day moving average with bullish momentum on the 5‑day RSI (≈ 62). A buy‑on‑dip strategy targeting the next support level around ¥1,850 (≈ 3 % below the current price) could capture upside as the cap‑ex rollout proceeds. Consider a modest position size (2‑3 % of portfolio) with a stop‑loss near ¥1,650 to manage downside risk in case the metaverse rollout faces execution delays.