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

• Market Cap: ¥9.15B
• Dividend Yield: 1.7%
• Average Volume (3M): 18.13M
• Price to Earnings (P/E): 46.8
• 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: 82,670,260
• 10 Day Avg. Volume: 3,165,470
• 30 Day Avg. Volume: 18,127,693
• PEG Ratio: -0.95
• Price to Book (P/B): 1.18
• Price to Sales (P/S): 0.50
• P/FCF Ratio: 7.43
• 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
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: ¥114.00 ▲(21.28% Upside)

Recomm Co., Ltd. faces significant challenges with profitability and cash flow, which are the most impactful factors on its stock score. The technical analysis shows a neutral trend, but the valuation indicates the stock may be overvalued. These factors collectively result in 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 revenue growth but struggles with profitability and cash flow management. The increasing leverage poses financial risks, and the declining margins highlight operational inefficiencies. The company needs to address its cash flow issues and improve its cost management to enhance financial health.

Income Statement

Recomm Co., Ltd. has shown a consistent revenue growth trajectory, with a 4.53% increase in TTM. However, the gross profit margin has declined over time, indicating rising costs or pricing pressures. The net profit margin remains low at 0.85%, suggesting limited profitability. EBIT and EBITDA margins have also decreased, reflecting operational challenges.

Balance Sheet

The company's debt-to-equity ratio has increased to 1.02, indicating higher leverage and potential risk. Return on equity is relatively low at 2.20%, pointing to inefficient use of equity capital. The equity ratio stands at 38.54%, showing moderate financial stability but room for improvement.

Cash Flow

Recomm Co., Ltd. faces significant cash flow challenges, with a negative free cash flow growth rate of -131.20% in TTM. The operating cash flow to net income ratio is low at 0.05, indicating weak cash generation relative to earnings. The free cash flow to net income ratio is 0.80, suggesting cash flow issues despite reported profits.

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: Negative
• Last Price: 94.00
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 94 is below the 20-day moving average (MA) of 107.30, below the 50-day MA of 113.19, and above the 200-day MA of 83.28, indicating a neutral trend. The MACD of -1.83 indicates Positive momentum. The RSI at 36.20 is Neutral, neither overbought nor oversold. The STOCH value of 46.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3323.

Recomm Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9445	69 Neutral	¥9.80B	10.81	―	3.71%	8.17%	25.32%
4395	69 Neutral	¥7.28B	43.60	―	0.53%	40.61%	―
3776	66 Neutral	¥10.69B	25.37	―	1.15%	17.19%	-43.91%
4415	65 Neutral	¥7.01B	15.65	―	―	39.18%	27.87%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3323	55 Neutral	¥9.15B	46.81	―	1.70%	23.35%	-2.24%
9421	45 Neutral	¥3.10B	58.94	―	―	4.84%	-54.50%

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.