CMC Corporation (2185) AI Stock Analysis

• Market Cap: ¥21.50B
• Dividend Yield: 3.19%
• Average Volume (3M): 4.83K
• Price to Earnings (P/E): 10.0
• Beta (1Y): 0.22
• Revenue Growth: -1.95%
• EPS Growth: 34.62%
• Country: JP
• Employees: 862
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 15.05
• Shares Outstanding: 14,364,000
• 10 Day Avg. Volume: 3,670
• 30 Day Avg. Volume: 4,830
• PEG Ratio: 0.42
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 0.81
• P/FCF Ratio: -75.47
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 78 Outperform
• Price Target: ¥1,911.00 ▲(17.10% Upside)

CMC Corporation's strong financial performance and undervaluation are the primary drivers of its high score. The stock's technical indicators show positive momentum, although the overbought RSI suggests caution. The lack of earnings call and corporate events data did not impact the score.

CMC Corporation Business Overview & Revenue Model

Company Description

CMC Corporation, together with its subsidiaries, provides manual creation, business process management, training, translation, and interpretation services. The company provides technical information solutions, such as user manuals, AR manuals, data structuring, and XML editor; personnel development solutions, including training events, staff manuals, training programs, and virtual work experiences; process improvement solutions, such as knowledge transfer and management, document management, and RPA applications; and marketing solutions, such as web/video, VR, and AR content, as well as event activation. It also offers various services, such as knowledge connect, ATOM knowledge, AR tools, VR showroom, hiyari hatto VR, AI contact, AI contents search, MaaS business development, multiplay VR, VR prototyping, AR repair manual, ICT for real estate promotion, workplace kaizen, VR content, digital sales support tools for real estate, Abook, automotive business development, and total printing, as well as manual writing, editing, and translation. CMC Corporation was founded in 1962 and is headquartered in Nagoya, Japan.

How the Company Makes Money

CMC Corporation generates revenue through a diversified portfolio of products and services in the technology and telecommunications sectors. Key revenue streams include IT services, where the company offers enterprise solutions, digital transformation services, and cloud computing. Additionally, CMC Corporation earns income from its telecommunications operations, which encompass providing infrastructure and connectivity services. Significant partnerships with other technology firms and government contracts also play a crucial role in contributing to the company's earnings. Revenue is further bolstered by the company's investments in research and development, which enable it to offer cutting-edge solutions to its clients.

CMC Corporation Financial Statement Overview

Summary

CMC Corporation exhibits strong financial performance with impressive revenue growth and profitability. The balance sheet is robust with low leverage and high equity, indicating financial stability. However, the decline in free cash flow poses a challenge, suggesting the need for careful cash management.

Income Statement

CMC Corporation demonstrates strong revenue growth with a 5.81% increase from the previous year, indicating robust demand for its services. The gross profit margin is solid at 37.25%, and the net profit margin has improved to 10.65%, reflecting efficient cost management. EBIT and EBITDA margins are healthy at 15.24% and 16.94% respectively, showcasing operational efficiency. Overall, the income statement reflects a positive growth trajectory and profitability.

Balance Sheet

The balance sheet is strong with a low debt-to-equity ratio of 0.01, indicating minimal leverage and financial risk. The return on equity is healthy at 10.08%, suggesting effective use of shareholder funds. The equity ratio is high at 78.13%, highlighting a strong capital structure. However, the slight increase in total liabilities warrants monitoring. Overall, the balance sheet reflects stability and prudent financial management.

Cash Flow

The cash flow statement shows a decline in free cash flow due to increased capital expenditures, resulting in negative free cash flow growth. The operating cash flow to net income ratio is robust at 1.01, indicating strong cash generation relative to earnings. However, the free cash flow to net income ratio is negative, highlighting potential challenges in cash management. While operating cash flow remains strong, the decline in free cash flow is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	18.41B	19.52B	18.45B	17.92B	17.33B	17.07B
Gross Profit	6.82B	7.28B	6.86B	6.86B	6.54B	6.00B
EBITDA	3.00B	3.31B	2.89B	2.90B	2.65B	2.22B
Net Income	2.13B	2.08B	1.76B	2.00B	1.62B	1.35B
Balance Sheet
Total Assets	25.20B	26.41B	24.75B	22.63B	21.07B	19.69B
Cash, Cash Equivalents and Short-Term Investments	12.35B	12.32B	13.54B	11.50B	9.93B	9.39B
Total Debt	604.75M	298.35M	389.81M	71.22M	15.48M	96.41M
Total Liabilities	4.37B	5.48B	5.52B	5.09B	5.11B	4.27B
Stockholders Equity	20.52B	20.63B	18.94B	17.42B	15.88B	15.33B
Cash Flow
Free Cash Flow	700.00M	-209.16M	2.71B	1.65B	1.79B	1.13B
Operating Cash Flow	1.01B	2.10B	3.06B	1.79B	1.92B	1.34B
Investing Cash Flow	-99.00M	-3.11B	-671.30M	-158.75M	-209.66M	-64.51M
Financing Cash Flow	-1.01B	-649.30M	-474.56M	-450.10M	-1.28B	-703.12M

CMC Corporation Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1632.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2185, the sentiment is Neutral. The current price of 1632 is below the 20-day moving average (MA) of 1668.88, below the 50-day MA of 1684.00, and above the 200-day MA of 1551.11, indicating a neutral trend. The MACD of -16.94 indicates Positive momentum. The RSI at 36.91 is Neutral, neither overbought nor oversold. The STOCH value of 18.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:2185.

CMC Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9709	80 Outperform	¥27.93B	12.23	―	3.77%	8.21%	43.69%
2185	78 Outperform	¥21.50B	10.03	―	3.19%	-1.95%	34.62%
9799	74 Outperform	¥16.02B	13.11	―	3.20%	6.50%	5.16%
3968	68 Neutral	¥20.27B	41.69	―	1.82%	20.91%	-26.43%
3837	67 Neutral	¥23.39B	21.78	―	2.30%	9.83%	23.34%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6572	60 Neutral	¥20.95B	45.67	―	1.64%	13.47%	296.94%