Margin SustainabilityVery high gross margin (82.09%) and solid net margin (9.93%) indicate durable pricing power and operational efficiency in messaging services. Sustained margins provide capacity to fund R&D and platform investment, supporting long-term competitiveness and cash returns.

Revenue Growth TrendsConsistent revenue growth (+12.93% YoY) reflects rising demand for transaction and subscription messaging. A recurring transaction-fee and subscription model with enterprise customers creates predictable revenue streams that support multi-year visibility and strategic investment planning.

Balance Sheet StrengthLow leverage (debt-to-equity 0.17) and a strong equity ratio (61.83%) give the company financial flexibility to fund capex, pursue M&A, or absorb shocks without aggressive refinancing. A ROE of ~12.79% indicates reasonably efficient capital use.

Bears Say

Free Cash Flow DeclineFree cash flow declined from 2024 to 2025 despite strong operating cash conversion (operating cash flow to net income ~0.96). If higher capex or working-capital needs persist, reduced FCF can limit reinvestment, dividend capacity, and balance sheet optionality over the medium term.

Operating Margin PressureA slight decline in EBIT margin, despite high gross margins, suggests rising operating costs or increased investment that compresses operating profitability. If this trend persists, it could erode the conversion of gross margin strength into sustainable net returns and cash generation.

Business Concentration RiskHeavy reliance on SMS/MMS transaction fees and operator partnerships concentrates revenue exposure. Structural risks include technological substitution, pricing pressure, or contract shifts; without meaningful diversification, revenue durability could be challenged over the medium term.

2175 FAQ

What was SMS Co., Ltd.’s price range in the past 12 months?

SMS Co., Ltd. lowest stock price was ¥978.70 and its highest was ¥1851.00 in the past 12 months.

What is SMS Co., Ltd.’s market cap?

SMS Co., Ltd.’s market cap is ¥147.45B.

When is SMS Co., Ltd.’s upcoming earnings report date?

SMS Co., Ltd.’s upcoming earnings report date is Apr 28, 2026 which is in 54 days.

How were SMS Co., Ltd.’s earnings last quarter?

SMS Co., Ltd. released its earnings results on Jan 30, 2026. The company reported -¥3.84 earnings per share for the quarter, missing the consensus estimate of ¥0.91 by -¥4.75.

Is SMS Co., Ltd. overvalued?

According to Wall Street analysts SMS Co., Ltd.’s price is currently Overvalued. Get more investment ideas with TipRanks Premium

Does SMS Co., Ltd. pay dividends?

SMS Co., Ltd. pays a Annually dividend of ¥28.5 which represents an annual dividend yield of 2.09%. See more information on SMS Co., Ltd. dividends here

What is SMS Co., Ltd.’s EPS estimate?

SMS Co., Ltd.’s EPS estimate is 25.56.

How many shares outstanding does SMS Co., Ltd. have?

SMS Co., Ltd. has 87,561,600 shares outstanding.

What happened to SMS Co., Ltd.’s price movement after its last earnings report?

SMS Co., Ltd. reported an EPS of -¥3.84 in its last earnings report, missing expectations of ¥0.91. Following the earnings report the stock price went down -1.388%.

Which hedge fund is a major shareholder of SMS Co., Ltd.?

Currently, no hedge funds are holding shares in JP:2175

What is the TipRanks Smart Score and how is it calculated?

Smart Score combines eight research factors - such as analyst recommendations, hedge fund trends, and technical indicators - to measure a stock’s outlook. These signals are unified into a single score that reflects bullish or bearish momentum. See detailed methodology

Company Description

SMS Co., Ltd.

SMS Co., Ltd. provides information infrastructure for the nursing care, medical care, career, healthcare, and elderly care field business areas in Japan and internationally. It operates an online community site for professionals or families engaged in nursing care; a certification course information portal; and a housing information portal for seniors, as well as a home-delivered meal search site. The company also operates various sites that provide online community, mail order, and magazines/book services for nurses; services for pharmacists and pharmacies; hospital management and administrator services; and consulting services for national and local governments. In addition, it provides recruiting agent services, as well as recruiting ads services for professionals and operators in nursing and medical care fields. Further, the company offers medical-related services. SMS Co., Ltd. was incorporated in 2003 and is based in Tokyo, Japan.