Fujitsu (FJTSY) AI Stock Analysis

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Fujitsu

(OTC:FJTSY)

77Outperform

Fujitsu's overall stock score of 76.5 reflects a strong financial performance and positive earnings call insights, particularly in the Service Solutions segment. The technical analysis shows bullish momentum, though caution is advised due to overbought signals. Valuation is neutral, aligning with industry standards. The company appears well-positioned for future growth, despite some challenges in specific segments.

Fujitsu (FJTSY) vs. S&P 500 (SPY)

Market Cap

$35.51B

Dividend Yield0.54%

Average Volume (3M)9.09K

Price to Earnings (P/E)16.8

Beta (1Y)0.43

Revenue Growth-6.98%

EPS Growth126.74%

CountryUS

Employees123,527

SectorTechnology

Sector Strength51

IndustryInformation Technology Services

Share Statistics

EPS (TTM)1.15

Shares Outstanding2,071,108,400

10 Day Avg. Volume27,258

30 Day Avg. Volume9,086

Financial Highlights & Ratios

PEG Ratio0.13

Price to Book (P/B)N/A

Price to Sales (P/S)0.97

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Fujitsu Business Overview & Revenue Model

Company DescriptionFujitsu Limited is a leading Japanese multinational information and communications technology (ICT) company, primarily engaged in the development and provision of technology products, solutions, and services. Headquartered in Tokyo, Fujitsu operates in various sectors including IT services, computing products, network solutions, and software development. The company is known for its innovative advancements in areas such as cloud computing, artificial intelligence, and the Internet of Things (IoT), thereby catering to a wide range of industries globally.

How the Company Makes MoneyFujitsu makes money through a diversified revenue model that includes several key streams. A significant portion of its income is derived from its IT services division, which provides consulting, systems integration, managed services, and IT infrastructure services to businesses, governments, and organizations worldwide. Additionally, Fujitsu generates revenue from its technology solutions segment, which includes the sale of hardware products such as servers, storage devices, and personal computers, as well as telecommunications equipment. The company also earns from its software and solutions offerings, which encompass enterprise applications, middleware, and infrastructure software. Fujitsu's strategic partnerships with other technology firms and collaborations in research and development further enhance its market presence and revenue generation. Factors such as a strong focus on digital transformation and sustainability initiatives also contribute positively to Fujitsu's earnings.

Fujitsu Financial Statement Overview

Summary

Fujitsu displays a solid financial performance with strong profitability, effective cost management, and efficient cash flow generation. The balance sheet is stable with manageable leverage, though attention should be paid to increasing liabilities. Overall, the company is well-positioned in the software industry, exhibiting growth potential and sound financial health.

Income Statement

Very Positive

Fujitsu shows strong profitability with a consistent increase in net income over the past years, leading to a robust net profit margin. The company has managed to maintain a stable gross profit margin, reflecting efficient cost management. Revenue growth is moderate, indicating steady expansion in its operations. The EBIT and EBITDA margins are healthy, showcasing solid operational performance.

Balance Sheet

Positive

The balance sheet reflects a strong equity position with an improving equity ratio, indicating stability. The debt-to-equity ratio is manageable, reflecting prudent financial leverage. However, there is a noticeable increase in total liabilities, which could pose potential risks if not managed carefully. Return on equity is healthy, suggesting efficient use of equity to generate profits.

Cash Flow

Very Positive

Fujitsu exhibits impressive cash flow management with a significant increase in free cash flow, driven by strong operating cash flow. This indicates effective conversion of revenue into actual cash, enhancing liquidity. The free cash flow to net income ratio is robust, supporting sustainable financial health. The company maintains a positive trajectory in operating cash flow growth.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
3.79T	3.76T	3.71T	3.59T	3.59T	3.86T
	Gross Profit
1.19T	1.16T	1.14T	1.12T	1.08T	1.11T
	EBIT
223.98B	260.21B	335.61B	219.20B	266.32B	211.48B
	EBITDA
461.19B	370.73B	457.57B	446.38B	471.68B	447.69B
	Net Income Common Stockholders
267.00B	254.48B	215.18B	182.69B	202.70B	160.04B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
273.98B	342.14B	355.90B	484.02B	481.83B	451.86B
	Total Assets
2.95T	3.51T	3.27T	3.33T	3.19T	3.19T
	Total Debt
424.68B	245.68B	211.18B	285.32B	316.32B	405.57B
	Net Debt
157.98B	-342.14B	-144.73B	-198.70B	-165.51B	-46.29B
	Total Liabilities
1.98T	1.60T	1.53T	1.62T	1.64T	1.84T
	Stockholders Equity
841.12B	1.75T	1.59T	1.59T	1.45T	1.24T
Cash Flow		Free Cash Flow
117.76B	113.38B	52.23B	105.10B	179.18B	214.29B
	Operating Cash Flow
314.70B	309.22B	220.33B	248.35B	307.95B	347.26B
	Investing Cash Flow
-157.92B	-157.24B	-42.81B	-59.27B	-71.56B	-114.21B
	Financing Cash Flow
-163.27B	-181.49B	-313.58B	-193.69B	-219.63B	-193.16B

Fujitsu Technical Analysis

Technical Analysis Sentiment

Positive

Last Price19.29

Price Trends

50DMA

19.92

Negative

100DMA

18.98

Positive

200DMA

18.69

Positive

Market Momentum

MACD

0.12

Positive

RSI

46.03

Neutral

STOCH

60.29

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FJTSY, the sentiment is Positive. The current price of 19.29 is below the 20-day moving average (MA) of 19.77, below the 50-day MA of 19.92, and above the 200-day MA of 18.69, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 46.03 is Neutral, neither overbought nor oversold. The STOCH value of 60.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FJTSY.

Fujitsu Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FJTSY	77 Outperform	$35.51B	16.80	19.16%	0.54%	-6.98%	126.74%
ACN	75 Outperform	$178.56B	23.54	27.26%	1.95%	4.10%	9.78%
INFY	75 Outperform	$68.15B	21.14	33.16%	2.46%	3.08%	11.92%
CTSH	72 Outperform	$34.71B	15.57	16.21%	1.72%	1.98%	7.16%
WIT	68 Neutral	$28.80B	26.52	16.59%	2.16%	-3.41%	67.87%
Sector *	57 Neutral	$19.95B	9.66	-12.05%	2.76%	5.40%	-24.89%
FIS	51 Neutral	$36.82B	49.02	4.65%	2.04%	-17.38%	―

* Technology Sector Average

Performance Comparison

FJTSY

Fujitsu

19.29

2.91

17.77%

ACN

Accenture

284.34

-23.46

-7.62%

CTSH

Cognizant

70.17

2.81

4.17%

FIS

Fidelity National Info

72.35

2.95

4.25%

INFY

Infosys

16.88

0.08

0.48%

WIT

Wipro

2.84

0.22

8.40%

Fujitsu Earnings Call Summary

Earnings Call Date: Jan 31, 2025 | % Change Since: 1.90% | Next Earnings Date: Apr 24, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant growth in the Service Solutions segment, driven by Fujitsu Uvance and a strong order backlog in Japan. However, challenges remain in the Hardware and Device Solutions segments, with notable declines in revenue and profits. While core free cash flow improved, the impact of one-time losses from business restructuring adds complexity to the overall financial picture.

Highlights

Service Solutions Revenue Growth

Revenue in the Service Solutions segment increased by 12.9%, reaching JPY 1.522 trillion, driven by digital transformation and modernization projects.

Fujitsu Uvance Performance

Fujitsu Uvance experienced a 67% increase in revenue, contributing significantly to the overall revenue growth in the Service Solutions segment.

Improvement in Adjusted Operating Profit

Adjusted operating profit increased by JPY 61.8 billion, reaching JPY 116.3 billion, more than twice the previous year, due to higher revenue and profitability improvements.

Strong Order Backlog in Japan

Orders in Japan increased by 16%, with significant growth in the Finance (21%), Public and Healthcare (26%), and Mission-critical segments (15%).

Positive Core Free Cash Flow

Core free cash flow increased by JPY 39.2 billion, reaching JPY 75 billion, due to improved working capital management.

Lowlights

Decline in Hardware Solutions Revenue

Hardware Solutions revenue decreased by 6% year-on-year, mainly due to a large pullback in network product demand.

Device Solutions Revenue and Profit Decrease

Device Solutions revenue dropped by 30.2%, and adjusted operating profit decreased by JPY 58.2 billion year-on-year due to weak semiconductor packaging demand.

One-time Loss from Business Restructuring

A one-time loss of approximately JPY 50 billion was recorded from exiting the private cloud business in Germany and the CCD business in Europe.

Company Guidance

In the third quarter earnings call for fiscal year 2023, Takeshi Isobe detailed Fujitsu's financial performance and guidance. Service Solutions emerged as the most significant segment, with revenue reaching JPY 1.522 trillion, up 12.9% year-on-year, and adjusted operating profit doubling to JPY 116.3 billion. This growth was driven by strong demand for digital transformation and modernization projects, particularly in Japan. Fujitsu Uvance saw a remarkable 67% revenue increase, contributing significantly to the overall performance. However, Hardware and Device Solutions experienced declines, with Device Solutions' revenue dropping 30.2% year-on-year. The company's core free cash flow improved to JPY 75 billion, up JPY 39.2 billion from the previous year. Despite some challenges, such as reduced demand for hardware and network products, the company maintained its full-year forecast, projecting revenue of JPY 3.810 trillion and an adjusted operating profit of JPY 320 billion for fiscal 2023. Fujitsu also announced a 1:10 stock split effective April 1, 2024, to enhance share liquidity.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.