Soliton Systems KK (3040) AI Stock Analysis

• Market Cap: $37.20B
• Dividend Yield: 3.23%
• Average Volume (3M): 114.60K
• Price to Earnings (P/E): 15.4
• Beta (1Y): 0.81
• Revenue Growth: 3.44%
• EPS Growth: 79.35%
• Country: JP
• Employees: 678
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 45.23
• Shares Outstanding: 19,738,888
• 10 Day Avg. Volume: 100,740
• 30 Day Avg. Volume: 114,603
• PEG Ratio: -1.13
• Price to Book (P/B): 1.73
• Price to Sales (P/S): 1.14
• P/FCF Ratio: 11.53
• Enterprise Value/Market Cap: 0.32
• Enterprise Value/Revenue: 0.63
• Enterprise Value/Gross Profit: 1.42
• Enterprise Value/Ebitda: 4.83
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 18,184.65
• Revenue Forecast (FY): $3.34T

• Rating: 78 Outperform
• Price Target: ¥2,020.00 ▲(0.50% Upside)

Soliton Systems KK's stock is supported by strong financial performance and positive technical indicators. The company's robust balance sheet and consistent cash flow generation are significant strengths. While the valuation is fair, the attractive dividend yield adds to the stock's appeal. The absence of earnings call data and corporate events does not impact the overall positive outlook.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage and a favorable debt-to-equity ratio provides financial stability and reduces risk, supporting long-term growth.

Cash Flow Resilience

Consistent operating cash flow and positive free cash flow indicate liquidity strength, enabling the company to invest in growth and weather economic fluctuations.

Profitability

Sustained profitability through robust gross profit margins reflects efficient operations and cost management, supporting long-term financial health.

Negative Factors

Revenue Growth Decline

A decline in revenue growth can signal challenges in market expansion or product demand, potentially impacting future earnings and competitive positioning.

Operational Efficiency Challenges

Decreasing EBIT and EBITDA margins indicate operational inefficiencies, which could erode profitability and hinder the company's ability to maintain competitive advantages.

Free Cash Flow Growth Decline

A slowdown in free cash flow growth can limit the company's ability to fund new projects and investments, affecting long-term strategic initiatives and shareholder returns.

Soliton Systems KK Business Overview & Revenue Model

Company Description

Soliton Systems K.K., a technology company, provides IT security, remote live broadcasting, and embedded solutions in Japan and internationally. The company offers IT security products that include mailzen, soliton secure desktop, NetAttest D3, NetAttest LAP, and cyber space analytics.. It also provides mobile video transmission products comprising smart-telecaster ZAO, smart-telecaster Zao-S, smart-telecaster Zao-SH, ZAO App, HD view decoder/receiver, cloud view, cloud view switcher, and VMS Plus. In addition, the company offers advanced teleoperation products and data analytics. Soliton Systems K.K. was founded in 1979 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Soliton 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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	18.77B	18.61B	19.06B	19.76B	17.39B	16.46B
Gross Profit	8.39B	8.29B	8.56B	7.63B	7.82B	7.55B
EBITDA	2.46B	2.52B	3.12B	2.77B	2.98B	1.90B
Net Income	1.72B	1.73B	1.94B	1.59B	1.87B	1.48B
Balance Sheet
Total Assets	23.25B	23.29B	22.62B	19.26B	17.30B	16.01B
Cash, Cash Equivalents and Short-Term Investments	15.38B	14.69B	13.39B	10.22B	8.50B	7.30B
Total Debt	171.00M	191.00M	133.00M	157.00M	157.00M	292.00M
Total Liabilities	11.15B	11.00B	11.49B	9.65B	8.83B	8.98B
Stockholders Equity	12.08B	12.27B	11.12B	9.60B	8.46B	7.01B
Cash Flow
Free Cash Flow	0.00	1.84B	3.14B	2.00B	1.75B	1.53B
Operating Cash Flow	0.00	2.04B	3.64B	2.30B	2.08B	2.62B
Investing Cash Flow	0.00	-237.00M	-57.00M	-305.00M	-464.00M	-1.12B
Financing Cash Flow	0.00	-507.00M	-397.00M	-252.00M	-481.00M	-1.10B

Soliton Systems KK Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2010.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 2010 is above the 20-day moving average (MA) of 1934.60, above the 50-day MA of 1784.92, and above the 200-day MA of 1421.64, indicating a bullish trend. The MACD of 56.84 indicates Positive momentum. The RSI at 62.82 is Neutral, neither overbought nor oversold. The STOCH value of 42.18 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3040	78 Outperform	$37.20B	15.43	19.71%	3.23%	3.44%	79.35%
4493	78 Outperform	¥17.63B	25.58	―	0.17%	31.39%	13.12%
3741	76 Outperform	¥31.07B	22.10	―	1.81%	21.97%	15.89%
3992	66 Neutral	¥21.00B	22.21	―	2.31%	5.07%	10.80%
4847	65 Neutral	¥24.87B	19.33	―	3.70%	6.02%	-11.83%
3695	65 Neutral	¥9.59B	30.18	―	5.27%	26.41%	-20.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Soliton Systems KK Corporate Events

Soliton Systems KK Corrects Financial Results Translation

Soliton Systems KK announced corrections to the English translation of its consolidated financial results for the nine months ended September 30, 2025. The corrections address clerical errors in the translation, specifically changing references from ‘Six Months ended’ to ‘Nine Months ended.’ These changes do not affect the original Japanese document, ensuring accuracy in the company’s financial reporting for stakeholders.

Soliton Systems Reports Strong Financial Growth in 2025

Soliton Systems K.K. reported a significant improvement in its financial performance for the nine months ending September 30, 2025, with net sales increasing by 5% and operating profit surging by 79% compared to the previous year. The company’s strong financial results reflect its effective market strategies and robust demand for its IT security solutions, positioning it favorably in the competitive technology industry.