Sohgo Security Services Co., Ltd. (2331) AI Stock Analysis

• Market Cap: ¥654.32B
• Dividend Yield: 2.14%
• Average Volume (3M): 783.35K
• Price to Earnings (P/E): 18.5
• Beta (1Y): 0.40
• Revenue Growth: 7.73%
• EPS Growth: 30.92%
• Country: JP
• Employees: 64,982
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): 18.66
• Shares Outstanding: 510,200,200
• 10 Day Avg. Volume: 728,830
• 30 Day Avg. Volume: 783,346
• PEG Ratio: 4.36
• Price to Book (P/B): 1.62
• Price to Sales (P/S): 0.99
• P/FCF Ratio: 18.13
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 68.68
• Revenue Forecast (FY): ¥599.40B

• Rating: 64 Neutral
• Price Target: ¥1,374.00 ▲(11.57% Upside)
• Action: Downgraded Date: 02/05/26
• Date: Action: Downgraded 02/05/26

The score is primarily supported by steady financial performance and a notably strong balance sheet, plus reasonable valuation. This is tempered by weak technical indicators (downtrend and negative momentum), making near-term risk higher despite improving TTM profitability.

Positive Factors

Balance Sheet Health

Conservative leverage and a materially improved debt-to-equity in the trailing twelve months provide durable financial flexibility. For a labor- and logistics-intensive security services business, this supports payroll funding, contract performance, opportunistic investment, and resilience through economic cycles.

Recurring Contract Revenue Model

A revenue mix anchored in contracted guarding, monitoring, and maintenance yields predictable, recurring cash flows. Multi-year contracts and attached monitoring/maintenance create customer stickiness, smoothing revenue volatility and supporting steady long-term organic growth and margin visibility.

Recent Revenue & Profitability Momentum

Trailing-twelve-months top-line growth alongside rising gross, operating and net margins versus FY2025 indicates operational momentum. Sustained revenue expansion and margin recovery suggest improving utilization, pricing or service mix that can lift durable earnings power if recurring contract growth continues.

Negative Factors

Cash Conversion Quality

Modest OCF-to-EBITDA and inconsistent cash conversion mean reported profits do not always convert to free cash reliably. For a capital-light but working-capital sensitive services firm, this constrains reinvestment, dividends or M&A flexibility and raises execution risk over months ahead.

Margin Sustainability Below Peak

Even with recent margin improvement, margins remain below FY2022 peaks, signaling structural pressure (e.g., wage, mix, or competitive constraints). Persistent below-peak margins reduce excess cash generation and limit the company’s ability to expand profitability without operational or pricing changes.

Return on Equity Below Prior Peak

ROE that has recovered but not reached prior highs implies capital is not yet as productive as before. Longer-term shareholder returns could be constrained unless the firm improves margin mix or deploys capital into higher-return services, making efficiency a structural focus area.

Sohgo Security Services Co., Ltd. Business Overview & Revenue Model

Company Description

Sohgo Security Services Co.,Ltd. engages in the security, integrated management, and disaster prevention businesses in Japan and internationally. The company offers home security systems and services, such as housework contracting and safety confirmation services for senior citizens; stalker countermeasures for women; and long-term care services. It also provides various systems for corporate customers, including online security systems, electronic security systems, condominium complex security systems, and automated management system for ATMs, as well as security systems for supporting schedule management at unmanned stores and other buildings; and damage insurance policies. In addition, the company offers stationed security services, total security and robot systems, transportation security systems, cash management solutions for stores, and total ATM management systems; and general property management and fire protection, building management, and call center services, as well as automated external defibrillator, a device that administrates an electric shock. Further, it provides other products and services for corporate customers, such as guest reception terminals, risk management tools, and security camera systems, as well as information security, specialty security, confidential document collection and recycling, test administration support, telegram, career training, BCP solution, and acquisition support services. The company was incorporated in 1965 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Sohgo Security Services generates revenue primarily through its core offerings of manned security services, which include on-site security personnel for businesses and events. Additionally, the company earns income from the installation and maintenance of electronic security systems, such as surveillance cameras and alarm systems. Another key revenue stream is derived from security consulting services, where they provide expertise in risk assessment and security planning. The company also benefits from long-term contracts with clients in various sectors, ensuring a stable income flow. Significant partnerships with technology providers enhance their service offerings and contribute to operational efficiency, further bolstering their financial performance.

Sohgo Security Services Co., Ltd. Financial Statement Overview

Summary

Solid fundamentals overall: revenue and profitability improved in TTM and the balance sheet is conservatively levered with improving debt-to-equity and solid ROE. The main constraint is cash-flow quality—operating cash flow relative to EBITDA is modest and cash conversion has been inconsistent versus profits.

Income Statement

TTM (Trailing-Twelve-Months) revenue is up strongly versus the prior annual period, and profitability improved with higher gross, operating, and net margins than FY2025. That said, margins remain below the stronger FY2022 peak levels, indicating some longer-term compression and a business that is profitable but not consistently expanding margins year after year.

Balance Sheet

Leverage looks conservative, with debt-to-equity improving meaningfully in TTM (Trailing-Twelve-Months) versus recent annual periods, supporting balance-sheet resilience. Return on equity is solid and has improved versus FY2024–FY2025, though it remains below the FY2022 high, suggesting profitability on capital is good but not at prior peak efficiency.

Cash Flow

Free cash flow is positive and growing in TTM (Trailing-Twelve-Months), and cash generation remains meaningful relative to earnings. However, operating cash flow relative to EBITDA is modest in both TTM (Trailing-Twelve-Months) and FY2025, implying weaker cash conversion versus reported operating profitability and some volatility in cash flow performance across years (including a free-cash-flow decline in FY2025).

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2021
Income Statement
Total Revenue	590.52B	551.88B	521.40B	492.23B	489.09B	469.92B
Gross Profit	138.33B	127.76B	125.71B	121.23B	125.58B	117.11B
EBITDA	77.81B	68.71B	59.94B	61.62B	67.19B	59.45B
Net Income	33.26B	27.11B	27.33B	23.95B	28.96B	25.01B
Balance Sheet
Total Assets	612.00B	572.40B	567.56B	516.65B	488.28B	481.46B
Cash, Cash Equivalents and Short-Term Investments	175.02B	150.68B	151.23B	143.65B	148.50B	144.25B
Total Debt	37.49B	59.91B	50.58B	53.83B	54.26B	69.98B
Total Liabilities	219.87B	196.40B	180.98B	172.76B	160.77B	177.04B
Stockholders Equity	351.79B	338.43B	352.93B	305.07B	290.71B	268.49B
Cash Flow
Free Cash Flow	32.02B	30.28B	40.57B	14.41B	26.93B	42.08B
Operating Cash Flow	50.20B	45.13B	56.06B	31.68B	42.74B	55.52B
Investing Cash Flow	-20.82B	-15.55B	-16.91B	-24.82B	-14.09B	-38.45B
Financing Cash Flow	-21.98B	-36.31B	-21.50B	-19.38B	-18.18B	-12.71B

Sohgo Security Services Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1231.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2331, the sentiment is Positive. The current price of 1231.5 is above the 20-day moving average (MA) of 1186.70, above the 50-day MA of 1217.40, and above the 200-day MA of 1121.97, indicating a bullish trend. The MACD of 10.93 indicates Negative momentum. The RSI at 71.91 is Negative, neither overbought nor oversold. The STOCH value of 96.99 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2331.

Sohgo Security Services Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9740	80 Outperform	¥43.92B	14.19	―	1.95%	9.05%	14.38%
6744	76 Outperform	¥278.00B	22.86	―	2.42%	9.55%	9.52%
9735	73 Outperform	¥2.67T	23.15	8.35%	1.77%	5.39%	4.89%
4264	65 Neutral	¥10.16B	50.68	―	―	5.80%	-43.56%
2331	64 Neutral	¥654.32B	18.50	―	2.14%	7.73%	30.92%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7058	62 Neutral	¥4.54B	17.67	―	3.03%	6.87%	-1.10%

Sohgo Security Services Co., Ltd. Corporate Events

ALSOK Makes Minor Correction to Third-Quarter Comprehensive Income Figure

ALSOK Co., Ltd. has issued a correction to its consolidated financial results for the third quarter ended December 31, 2025, prepared under Japanese GAAP. The revision concerns a minor error in the disclosure of comprehensive income for the nine-month period, with the figure adjusted from ¥27,671 million to ¥27,621 million, while all other reported financial metrics, including net sales, operating income, ordinary income, and profit attributable to owners of parent, remain unchanged.

The correction indicates that the company’s strong earnings momentum, highlighted by solid year-on-year growth in sales and profits, is unaffected by the adjustment. For investors and other stakeholders, the announcement suggests the underlying business performance is intact, and the change is limited to a small numerical correction in comprehensive income disclosure, with no broader impact on ALSOK’s operations or earnings trend.

The most recent analyst rating on (JP:2331) stock is a Hold with a Yen1225.00 price target. To see the full list of analyst forecasts on Sohgo Security Services Co., Ltd. stock, see the JP:2331 Stock Forecast page.

ALSOK Posts Strong Q3 FY2025 Results and Lifts Full-Year Earnings Outlook

ALSOK reported solid growth for the third quarter ended December 31, 2025, with consolidated net sales, operating income, ordinary income, and profit attributable to owners of parent all rising year-on-year, leading to higher earnings per share. The company’s balance sheet also strengthened, with increases in total assets, net assets, and net asset value per share, while operating cash flow improved and cash and cash equivalents at period-end rose, despite continued investment and financing outflows. ALSOK’s full-year forecasts indicate continued revenue and profit expansion, supported by a stable equity ratio and enhanced shareholder returns through an increased dividend, including a commemorative component for the year ended March 2025, underscoring management’s confidence in the company’s financial health and growth trajectory.

The most recent analyst rating on (JP:2331) stock is a Buy with a Yen1434.00 price target. To see the full list of analyst forecasts on Sohgo Security Services Co., Ltd. stock, see the JP:2331 Stock Forecast page.

ALSOK Posts Strong Nine-Month Earnings and Keeps Upgraded Dividend Outlook

ALSOK CO., LTD. reported strong consolidated results for the nine months ended December 31, 2025, with net sales rising 9.6% year on year to ¥439.1 billion and profit attributable to owners of parent jumping 38.0% to ¥23.7 billion, reflecting a sharp recovery in profitability. Operating and ordinary income climbed more than 20% compared with the previous year, comprehensive income surged over 50%, and the equity base strengthened as total assets and net assets both increased, while share buybacks trimmed average shares outstanding and supported higher earnings per share. The company maintained its full-year forecast for the fiscal year ending March 31, 2026, projecting continued top-line and profit growth, and kept its dividend outlook unchanged at an increased annual payout of ¥29.20 per share. ALSOK also continued to reshape its portfolio by adding three consolidated subsidiaries, including ALSOK MIYAZAKI CO., LTD. and Okinawa Building Maintenance Co., Ltd. and its subsidiary, while removing two units, moves that suggest an ongoing effort to optimize its regional service network and operating efficiency following its corporate rebranding to ALSOK in July 2025.

The most recent analyst rating on (JP:2331) stock is a Buy with a Yen1434.00 price target. To see the full list of analyst forecasts on Sohgo Security Services Co., Ltd. stock, see the JP:2331 Stock Forecast page.