Soliton Systems KK (3040) AI Stock Analysis

• Market Cap: ¥29.19B
• Dividend Yield: 4.12%
• Average Volume (3M): 37.07K
• Price to Earnings (P/E): 15.9
• Beta (1Y): 0.73
• Revenue Growth: -0.14%
• EPS Growth: -4.22%
• Country: JP
• Employees: 678
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 9.50
• Shares Outstanding: 19,738,888
• 10 Day Avg. Volume: 54,140
• 30 Day Avg. Volume: 37,070
• 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: 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

• Rating: 77 Outperform
• 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 Business Overview & Revenue Model

Company Description

Soliton 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 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: 1577.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3040	77 Outperform	¥29.19B	15.95	14.71%	4.12%	-0.14%	-4.22%
4493	76 Outperform	¥20.59B	35.01	―	0.15%	28.56%	-13.56%
3741	74 Outperform	¥25.37B	18.12	―	4.44%	17.22%	10.53%
4847	74 Outperform	¥27.29B	19.78	―	3.43%	7.42%	-4.90%
3992	73 Outperform	¥21.13B	25.56	―	2.21%	2.06%	-16.53%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3695	61 Neutral	¥8.71B	50.20	―	5.80%	14.59%	-71.29%

Soliton Systems KK Corporate Events

Soliton Systems KK Reports Mixed Financial Results for First Half of 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

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

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

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.