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Soliton Systems KK (JP:3040)
:3040
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Soliton Systems KK (3040) AI Stock Analysis

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JP:3040

Soliton Systems KK

(OTC:3040)

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Outperform 77 (OpenAI - 4o)
Rating:77Outperform
Price Target:
¥1,536.00
▼(-2.60% Downside)
Soliton Systems KK is well-positioned with strong financial health, characterized by consistent revenue and profit margins, a robust equity foundation, and healthy cash flow generation. The stock's valuation is attractive with a reasonable P/E ratio and high dividend yield. Technical indicators suggest a positive trend, although operational efficiency challenges are noted in recent margins.

Soliton Systems KK (3040) vs. iShares MSCI Japan ETF (EWJ)

Soliton Systems KK Business Overview & Revenue Model

Company DescriptionSoliton Systems KK (3040) is a Japanese technology company specializing in the development of advanced video transmission and cybersecurity solutions. Operating primarily in the sectors of media and entertainment, as well as network security, Soliton's core products include high-quality live video streaming solutions, cloud-based services, and innovative security software designed to protect data in transit. The company serves a diverse clientele, including broadcasters, corporations, and public sector entities, enabling them to enhance their communication and security capabilities.
How the Company Makes MoneySoliton Systems generates revenue through multiple streams, primarily through the sale of its video transmission equipment and cybersecurity software licenses. The company offers subscription-based services for its cloud platforms, providing recurring revenue. Additionally, Soliton partners with various distributors and technology firms to expand its market reach, which allows for increased sales and service contracts. The company also benefits from maintenance and support services that accompany its products, contributing to its overall earnings.

Soliton Systems KK Financial Statement Overview

Summary
Soliton Systems KK demonstrates strong financial health with consistent revenue and profit margins, a robust equity foundation, and healthy cash flow generation. While there are signs of operational efficiency challenges, notably in recent EBIT and EBITDA margins, the company remains well-positioned with low leverage and effective capital management.
Income Statement
75
Positive
Soliton Systems KK has shown consistent revenue growth over the years, although there was a slight dip in 2024. The gross profit margin has remained robust, indicating effective cost management, while the net profit margin has been strong, showcasing profitability. However, the recent decline in both EBIT and EBITDA margins suggests potential challenges in operational efficiency.
Balance Sheet
82
Very Positive
The company maintains a healthy equity position with a strong equity ratio and low debt levels, as evidenced by a favorable debt-to-equity ratio. Return on Equity (ROE) is impressive, indicating effective use of equity capital to generate profits. Overall, the balance sheet reflects financial stability and low leverage risk.
Cash Flow
78
Positive
Operating cash flow has shown resilience, although there has been a decrease in 2024. The company has maintained positive free cash flow, which is a strong indicator of liquidity. However, the decline in free cash flow growth rate indicates potential challenges in generating cash surplus compared to previous years.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue18.77B18.61B19.06B19.76B17.39B16.46B
Gross Profit8.39B8.29B8.56B7.63B7.82B7.55B
EBITDA2.46B2.52B3.12B2.77B2.98B1.90B
Net Income1.72B1.73B1.94B1.59B1.87B1.48B
Balance Sheet
Total Assets23.25B23.29B22.62B19.26B17.30B16.01B
Cash, Cash Equivalents and Short-Term Investments15.38B14.69B13.39B10.22B8.50B7.30B
Total Debt171.00M191.00M133.00M157.00M157.00M292.00M
Total Liabilities11.15B11.00B11.49B9.65B8.83B8.98B
Stockholders Equity12.08B12.27B11.12B9.60B8.46B7.01B
Cash Flow
Free Cash Flow0.001.84B3.14B2.00B1.75B1.53B
Operating Cash Flow0.002.04B3.64B2.30B2.08B2.62B
Investing Cash Flow0.00-237.00M-57.00M-305.00M-464.00M-1.12B
Financing Cash Flow0.00-507.00M-397.00M-252.00M-481.00M-1.10B

Soliton Systems KK Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1577.00
Price Trends
50DMA
1425.66
Positive
100DMA
1374.81
Positive
200DMA
1271.31
Positive
Market Momentum
MACD
30.30
Negative
RSI
64.70
Neutral
STOCH
55.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3040, the sentiment is Positive. The current price of 1577 is above the 20-day moving average (MA) of 1483.95, above the 50-day MA of 1425.66, and above the 200-day MA of 1271.31, indicating a bullish trend. The MACD of 30.30 indicates Negative momentum. The RSI at 64.70 is Neutral, neither overbought nor oversold. The STOCH value of 55.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3040.

Soliton Systems KK Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
¥29.19B15.9514.71%4.12%-0.14%-4.22%
76
Outperform
¥20.59B35.010.15%28.56%-13.56%
74
Outperform
¥25.37B18.124.44%17.22%10.53%
74
Outperform
¥27.29B19.783.43%7.42%-4.90%
73
Outperform
¥21.13B25.562.21%2.06%-16.53%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
61
Neutral
¥8.71B50.205.80%14.59%-71.29%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:3040
Soliton Systems KK
1,577.00
364.25
30.04%
JP:3695
GMO Research & AI,Inc.
1,980.00
-502.81
-20.25%
JP:3741
Systems Engineering Consultants Co., Ltd.
2,478.00
511.29
26.00%
JP:3992
Needs Well, Inc.
544.00
268.62
97.55%
JP:4493
Cyber Security Cloud, Inc.
2,031.00
278.90
15.92%
JP:4847
Intelligent Wave Inc.
1,038.00
188.39
22.17%

Soliton Systems KK Corporate Events

Soliton Systems KK Reports Mixed Financial Results for First Half of 2025
Aug 8, 2025

Soliton Systems KK reported its consolidated financial results for the first half of 2025, showing a slight increase in net sales by 2% compared to the previous year, reaching ¥8,710 million. Despite the increase in operating profit by 22.5%, ordinary profit decreased by 6.2%, and profit attributable to owners of the parent fell by 1.5%. The company maintained a stable equity-to-asset ratio and announced a dividend payment schedule, reflecting its ongoing commitment to shareholder returns. The exclusion of Soliton Network Systems (Shanghai) Co., Ltd. from consolidation and changes in accounting policies were noted, indicating strategic adjustments in its operations.

Soliton Systems’ Parent Company Reports Strong Financial Results
Jun 20, 2025

Soliton Systems KK announced the financial results of its parent company, Yugen Kaisha Zen-Noboks, for the fiscal year ending March 31, 2025. The parent company reported a net profit of 374,423 thousand yen, indicating a strong financial performance despite an operating loss, which could positively impact Soliton Systems’ strategic positioning and stakeholder confidence.

Soliton Systems Completes Treasury Share Disposal for Employee Compensation
Jun 16, 2025

Soliton Systems KK has completed the payment procedures for the disposal of 4,500 treasury shares as restricted stock compensation, a decision made by its Board of Directors on May 22, 2025. This move, involving a total disposal amount of 5,760,000 yen, is part of the company’s strategy to incentivize its employees, potentially enhancing their commitment and aligning their interests with the company’s performance.

Soliton Systems Introduces Stock Compensation Plan to Boost Employee Retention
May 22, 2025

Soliton Systems K.K. has announced a plan to dispose of 4,500 treasury shares as restricted stock compensation to incentivize employees and enhance corporate value. This initiative, aimed at strengthening employee retention, involves granting shares over a three-year period with specific conditions attached, reflecting the company’s strategic focus on sustainable growth and employee engagement.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 14, 2025