FRONTEO, Inc. (2158) AI Stock Analysis

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FRONTEO, Inc.

(2158)

Rating:65Neutral

Price Target:

¥651.00

▲(7.43%Upside)

FRONTEO, Inc.'s stock score is primarily influenced by its mixed financial performance, characterized by operational recovery but inconsistent cash flow and profit margins. The technical analysis indicates slight positive momentum, while the high P/E ratio suggests overvaluation, impacting the overall score.

FRONTEO, Inc. (2158) vs. iShares MSCI Japan ETF (EWJ)

Market Cap

¥23.85B

Dividend YieldN/A

Average Volume (3M)170.14K

Price to Earnings (P/E)43.0

Beta (1Y)1.51

Revenue Growth-17.30%

EPS GrowthN/A

CountryJP

Employees225

SectorTechnology

Sector Strength83

IndustryInformation Technology Services

Share Statistics

EPS (TTM)6.87

Shares Outstanding39,356,860

10 Day Avg. Volume218,270

30 Day Avg. Volume170,143

Financial Highlights & Ratios

PEG Ratio0.33

Price to Book (P/B)7.39

Price to Sales (P/S)0.00

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

FRONTEO, Inc. Business Overview & Revenue Model

Company DescriptionFRONTEO, Inc. (2158) is a technology company specializing in data analysis and artificial intelligence solutions, primarily serving the legal, healthcare, and business sectors. The company offers a range of services that include eDiscovery, digital forensics, and data analytics, leveraging its proprietary AI technology to assist clients in managing large volumes of data effectively and making informed decisions.

How the Company Makes MoneyFRONTEO, Inc. generates revenue through its suite of AI-driven services and solutions tailored to various industries. The company's primary revenue streams include fees from its eDiscovery and digital forensics services, where they assist legal firms and corporate clients in managing and analyzing data for litigation and investigation purposes. Additionally, FRONTEO earns income through its healthcare analytics solutions, offering data-driven insights to improve patient outcomes and operational efficiency in medical institutions. The company often engages in partnerships and collaborations with other technology firms and industry players to enhance its service offerings and expand its market reach, further contributing to its revenue.

FRONTEO, Inc. Financial Statement Overview

Summary

FRONTEO, Inc. shows a mixed financial performance. While there are signs of operational recovery with improved EBIT and EBITDA margins, as well as better leverage management, the company faces challenges with erratic revenue and profit margins, coupled with inconsistent cash flow.

Income Statement

Positive

The company's income statement shows a volatile performance over recent years. The gross profit margin has been consistently positive, indicating good cost management relative to revenue. However, there is a significant fluctuation in net profit margin, with recent losses in 2023 and 2024 following profitable years. Revenue growth has also been erratic, with a decline in 2025. Despite this, recent improvements in EBIT and EBITDA margins suggest a recovery in operational efficiency.

Balance Sheet

Positive

The balance sheet reflects a moderate financial position. The debt-to-equity ratio has improved, indicating better leverage management. Return on equity is turning positive again, showing potential for increasing shareholder value. However, a relatively low equity ratio could indicate risk if financial conditions worsen. Overall, there is a positive trajectory in strengthening the balance sheet.

Cash Flow

Neutral

Cash flow analysis reveals inconsistent free cash flow growth, with a notable decline in recent periods. The operating cash flow to net income ratio is positive, suggesting that the company is generating cash from its operations. However, the free cash flow to net income ratio shows variability, indicating challenges in converting profits into free cash. The company needs to stabilize its cash flow generation to ensure long-term financial health.

TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
6.93B	6.10B	7.38B	7.22B	10.93B	10.37B
	Gross Profit
4.00B	3.45B	3.48B	3.26B	5.57B	4.78B
	EBIT
944.21M	527.55M	-185.00M	-1.36B	1.72B	507.22M
	EBITDA
-845.04M	614.80M	-1.93B	-723.23M	2.69B	1.40B
	Net Income Common Stockholders
-1.90B	555.09M	-2.84B	-1.70B	1.31B	359.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.17B	2.60B	3.04B	1.48B	3.46B	3.00B
	Total Assets
11.59B	6.47B	7.52B	9.15B	11.83B	11.94B
	Total Debt
3.94B	1.99B	2.93B	3.09B	3.75B	5.63B
	Net Debt
772.99M	-612.07M	-117.38M	1.61B	284.20M	2.62B
	Total Liabilities
5.84B	3.24B	4.68B	4.10B	5.38B	7.30B
	Stockholders Equity
5.75B	3.23B	2.84B	5.05B	6.44B	4.64B
Cash Flow		Free Cash Flow
0.00	668.34M	1.23B	-1.54B	1.72B	1.45B
	Operating Cash Flow
0.00	751.47M	1.71B	-914.62M	2.38B	2.03B
	Investing Cash Flow
0.00	-254.03M	-181.86M	-625.06M	-618.21M	-347.73M
	Financing Cash Flow
0.00	-911.48M	-32.15M	-606.32M	-1.46B	-53.02M

FRONTEO, Inc. Technical Analysis

Technical Analysis Sentiment

Positive

Last Price606.00

Price Trends

50DMA

579.94

Positive

100DMA

597.99

Positive

200DMA

628.08

Negative

Market Momentum

MACD

8.25

Positive

RSI

54.38

Neutral

STOCH

22.61

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2158, the sentiment is Positive. The current price of 606 is below the 20-day moving average (MA) of 614.00, above the 50-day MA of 579.94, and below the 200-day MA of 628.08, indicating a neutral trend. The MACD of 8.25 indicates Positive momentum. The RSI at 54.38 is Neutral, neither overbought nor oversold. The STOCH value of 22.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2158.

FRONTEO, Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2359	81 Outperform	¥26.59B	11.95		2.95%	2.50%	-1.48%
3393	81 Outperform	¥27.31B	13.36		4.14%	13.49%	24.76%
2349	77 Outperform	¥26.27B	10.92		1.18%	11.94%	14.10%
4396	76 Outperform	¥25.60B	16.65		1.91%	20.75%	31.02%
3788	69 Neutral	¥23.15B	32.02		1.85%	7.60%	-6.99%
2158	65 Neutral	¥23.85B	42.97		―	-17.30%	―
Sector *	62 Neutral	$11.81B	10.34	-7.44%	2.91%	7.41%	-7.93%

* Technology Sector Average

Performance Comparison

JP:2158

FRONTEO, Inc.

606.00

-20.00

-3.19%

JP:2349

Nippon Information Development Co., Ltd.

2,365.00

57.93

2.51%

JP:2359

Core Corporation

1,863.00

25.50

1.39%

JP:3393

Startia Holdings,Inc.

2,755.00

794.45

40.52%

JP:3788

GMO GlobalSign Holdings K.K.

2,010.00

-924.40

-31.50%

JP:4396

System Support, Inc.

2,476.00

658.86

36.26%

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.