Recomm Co., Ltd. (3323) AI Stock Analysis

• Market Cap: ¥6.77B
• Dividend Yield: 1.93%
• Average Volume (3M): 767.99K
• Price to Earnings (P/E): 60.8
• Beta (1Y): 0.47
• Revenue Growth: 22.67%
• EPS Growth: -69.80%
• Country: JP
• Employees: 514
• Sector: Communication Services
• Sector Strength: 72
• Industry: Telecommunications Services
• EPS (TTM): 1.58
• Shares Outstanding: 82,630,260
• 10 Day Avg. Volume: 423,520
• 30 Day Avg. Volume: 767,990
• PEG Ratio: 0.93
• Price to Book (P/B): 1.46
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 35.10
• 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: ¥85.00
• Price Target Upside: 1.19% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 74 Outperform
• Price Target: ¥99.00 ▲(17.86%Upside)

The stock's high score is driven by strong technical indicators and a solid financial foundation. However, the high P/E ratio suggests overvaluation, and challenges in free cash flow growth pose potential risks. Investors should be cautious of overbought technical conditions.

Recomm Co., Ltd. Business Overview & Revenue Model

Company Description

Recomm Co., Ltd. (3323) operates primarily in the technology sector, focusing on providing innovative solutions and services. Its core offerings include a range of technology products and services designed to meet the needs of various industries. The company is committed to delivering high-quality solutions that enhance efficiency and productivity for its clients.

How the Company Makes Money

Recomm Co., Ltd. generates revenue through the sale of its technology products and services to businesses across different sectors. The company's revenue model includes direct sales, subscription-based services, and customized technology solutions that cater to specific client needs. Key revenue streams include software licensing fees, maintenance and support services, and consulting fees. Additionally, Recomm Co., Ltd. may engage in strategic partnerships that expand its market reach and contribute to its earnings.

Recomm Co., Ltd. Financial Statement Overview

Summary

Recomm Co., Ltd. shows solid revenue growth and efficient cost management, with strong gross profit margins. However, the net profit margin is modest, and free cash flow growth is challenged. A balanced financial position with manageable leverage provides a stable foundation.

Income Statement

Recomm Co., Ltd. demonstrated a solid revenue growth trajectory with a TTM increase of 9.6% compared to the previous year. Gross profit margins remain strong at 22.72%, reflecting efficient cost management. However, the net profit margin is modest at 0.85%, suggesting room for improvement in controlling overheads and operational expenses. The EBITDA margin of 2.8% indicates moderate profitability, with potential to enhance operational efficiency.

Balance Sheet

The company exhibits a stable financial structure with a debt-to-equity ratio of 1.02, indicating balanced leverage. The equity ratio of 38.24% reflects a solid equity base, though slightly below industry averages. The return on equity stands at 2.29%, suggesting potential for higher profitability relative to equity.

Cash Flow

Recomm Co., Ltd. presents a mixed cash flow picture. The operating cash flow to net income ratio is healthy at 2.26 for TTM, highlighting strong cash generation relative to net income. However, the free cash flow growth rate is -74.9%, indicating challenges in sustaining free cash flow levels. The free cash flow to net income ratio is 1.81, suggesting effective capital expenditure management but with room for improvement in cash flow stability.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	12.80B	11.69B	9.51B	8.92B	6.63B	7.15B
Gross Profit	2.91B	2.87B	2.43B	2.61B	2.45B	2.15B
EBITDA	358.40M	464.08M	689.74M	619.13M	383.55M	1.32B
Net Income	109.42M	83.94M	314.85M	351.55M	-316.52M	364.43M
Balance Sheet
Total Assets	12.49B	12.65B	10.84B	9.24B	8.25B	9.64B
Cash, Cash Equivalents and Short-Term Investments	2.44B	3.06B	2.69B	2.84B	3.10B	3.48B
Total Debt	4.87B	4.83B	3.51B	2.48B	2.13B	2.61B
Total Liabilities	7.34B	7.35B	5.89B	4.60B	4.07B	5.09B
Stockholders Equity	4.78B	4.96B	4.69B	4.33B	3.68B	4.11B
Cash Flow
Free Cash Flow	197.70M	787.38M	-147.06M	197.12M	373.42M	184.52M
Operating Cash Flow	246.80M	841.61M	-104.76M	266.45M	391.47M	216.06M
Investing Cash Flow	-1.57B	-1.35B	-843.76M	-536.57M	-242.43M	1.29B
Financing Cash Flow	1.07B	816.51M	876.37M	-262.07M	-558.73M	-221.76M

Recomm Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 84.00
• 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:3323, the sentiment is Neutral. The current price of 84 is below the 20-day moving average (MA) of 85.20, above the 50-day MA of 79.86, and above the 200-day MA of 70.57, indicating a neutral trend. The MACD of 1.09 indicates Positive momentum. The RSI at 50.02 is Neutral, neither overbought nor oversold. The STOCH value of 39.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3323.

Recomm Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3323	74 Outperform	¥6.77B	60.81		1.93%	22.67%	-69.80%
4395	70 Outperform	¥6.00B	52.39		0.71%	32.90%	―
4415	69 Neutral	¥4.65B	11.21		―	15.58%	38.21%
9445	69 Neutral	¥8.80B	12.00		3.81%	3.93%	1.66%
3776	66 Neutral	¥9.22B	24.16		1.32%	4.70%	35.62%
Sector *	56 Neutral	HK$68.29B	-1.90	-3.62%	5.43%	-4.09%	-17.08%
9421	42 Neutral	¥3.10B	22.14		―	-13.42%	-195.53%