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

• Market Cap: ¥8.74B
• Dividend Yield: 1.47%
• Average Volume (3M): 18.13M
• Price to Earnings (P/E): 43.1
• Beta (1Y): 0.40
• Revenue Growth: 23.35%
• EPS Growth: -2.24%
• Country: JP
• Employees: 514
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 0.50
• Shares Outstanding: 82,630,260
• 10 Day Avg. Volume: 3,165,470
• 30 Day Avg. Volume: 18,127,693
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: Hold
• Number of Analyst Covering: 0

• Rating: 50 Neutral
• Price Target: ¥104.00 ▼(-4.59% Downside)

Recomm Co., Ltd. faces challenges with profitability and cash flow, reflected in its financial performance score. The technical analysis indicates bearish momentum, while the high P/E ratio suggests potential overvaluation. These factors contribute to a moderate overall stock score.

Recomm Co., Ltd. Business Overview & Revenue Model

Company Description

Recomm Co., Ltd. (3323) is a Japanese company primarily engaged in the development and provision of recommendation systems and data analytics services. The company operates in the technology sector, focusing on enhancing user experiences through personalized content delivery and product recommendations. Recomm's core offerings include software solutions that leverage artificial intelligence and machine learning to analyze consumer behavior and preferences, helping businesses optimize their marketing strategies and improve customer engagement.

How the Company Makes Money

Recomm Co., Ltd. generates revenue through a combination of software licensing fees, subscription services, and consulting services related to data analytics. The company charges clients for access to its recommendation engine and analytics tools, typically on a subscription basis, allowing businesses to integrate these solutions into their existing systems. Additionally, Recomm may offer bespoke consulting services to help clients implement and maximize the effectiveness of their recommendation systems. Strategic partnerships with e-commerce platforms and other technology providers enable Recomm to expand its market reach and enhance its service offerings, contributing to its revenue growth.

Recomm Co., Ltd. Financial Statement Overview

Summary

Recomm Co., Ltd. demonstrates strong revenue growth and efficient cost management, with a solid financial structure. However, the net profit margin and free cash flow growth indicate areas for improvement.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.38B	11.69B	9.51B	8.92B	6.63B	7.15B
Gross Profit	3.09B	2.87B	2.43B	2.61B	2.45B	2.15B
EBITDA	681.73M	464.08M	689.74M	619.13M	387.54M	1.32B
Net Income	192.63M	83.94M	314.85M	351.55M	-316.52M	364.43M
Balance Sheet
Total Assets	12.65B	12.65B	10.84B	9.24B	8.25B	9.64B
Cash, Cash Equivalents and Short-Term Investments	2.59B	3.06B	2.69B	2.84B	3.10B	3.48B
Total Debt	5.14B	4.83B	3.51B	2.48B	2.13B	2.61B
Total Liabilities	7.43B	7.35B	5.89B	4.60B	4.07B	5.09B
Stockholders Equity	4.88B	4.96B	4.69B	4.33B	3.68B	4.11B
Cash Flow
Free Cash Flow	-61.67M	787.38M	-147.06M	197.12M	373.42M	184.52M
Operating Cash Flow	73.83M	841.61M	-104.76M	266.45M	391.47M	216.06M
Investing Cash Flow	-1.55B	-1.35B	-843.76M	-536.57M	-242.43M	1.29B
Financing Cash Flow	1.16B	816.51M	876.37M	-262.07M	-558.73M	-221.76M

Recomm Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 109.00
• 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 Positive. The current price of 109 is below the 20-day moving average (MA) of 118.39, above the 50-day MA of 107.58, and above the 200-day MA of 80.39, indicating a neutral trend. The MACD of -2.52 indicates Positive momentum. The RSI at 47.43 is Neutral, neither overbought nor oversold. The STOCH value of 34.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3323.

Recomm Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4395	72 Outperform	¥7.40B	45.54	―	0.48%	40.61%	―
4415	72 Outperform	¥7.69B	16.74	―	―	27.56%	47.92%
9445	69 Neutral	¥9.89B	10.90	―	3.71%	8.17%	25.32%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3776	60 Neutral	¥10.08B	40.68	―	1.20%	1.95%	-59.39%
3323	50 Neutral	¥8.74B	43.05	―	1.47%	23.35%	-2.24%
9421	45 Neutral	¥3.18B	98.38	―	―	-6.09%	-88.41%

Recomm Co., Ltd. Corporate Events

Recomm Co., Ltd. Reports Strong Q3 2025 Financial Performance Amidst Comprehensive Income Decline

Recomm Co., Ltd. reported a significant increase in its financial performance for the third quarter of 2025, with sales rising by 20.7% and operating profit increasing by 89.4% compared to the previous year. The company’s profit before tax and profit attributable to owners of the parent also saw substantial growth, indicating a strong operational performance. However, the total comprehensive income decreased by 75.2%, which might concern stakeholders. The equity attributable to owners of the parent to total assets ratio slightly decreased, reflecting a marginal change in financial stability.