Sockets Inc. (3634) AI Stock Analysis

• Market Cap: ¥1.73B
• Dividend Yield: 0.4%
• Average Volume (3M): 6.35K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.58
• Revenue Growth: 6.81%
• EPS Growth: 62.28%
• Country: JP
• Employees: 73
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 8.03
• Shares Outstanding: 2,477,400
• 10 Day Avg. Volume: 2,380
• 30 Day Avg. Volume: 6,350
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: ―

Sockets Inc. presents a mixed financial picture. The company's strong equity position and absence of debt are positives, but challenges in profitability and cash flow generation weigh heavily on its outlook. Technical indicators suggest stable but not strong market momentum, while valuation metrics point to concerns about overvaluation due to negative earnings.

Positive Factors

Strong Equity Position

A strong equity position with no debt provides financial stability and resilience, allowing the company to weather economic fluctuations and invest in growth opportunities without the burden of interest payments.

Revenue Growth

Positive revenue growth indicates the company's ability to expand its market reach and product adoption, which is crucial for long-term success in the competitive tech industry.

Improved Operating Cash Flow

Improved operating cash flow suggests better operational efficiency and the potential to generate sufficient cash to fund operations and future investments, enhancing long-term financial health.

Negative Factors

Profitability Challenges

Negative profit margins indicate operational inefficiencies and difficulty in achieving profitability, which can hinder the company's ability to reinvest in growth and compete effectively.

Negative Free Cash Flow

Negative free cash flow suggests challenges in generating sufficient cash from operations, which can limit the company's ability to invest in growth and meet financial obligations without external financing.

Declining Revenues

Declining revenues can signal weakening demand or competitive pressures, posing a risk to the company's market position and long-term growth prospects in the tech industry.

Sockets Inc. Business Overview & Revenue Model

Company Description

Sockets Inc. engages in the development and provision of services, applications, and database for Internet platforms. It offers data services, cross-media recommendation, emotional metadata analysis services, specialized search services, integral system development and construction, and database service planning and developing. The company was incorporated in 2000 and is based in Tokyo, Japan.

How the Company Makes Money

Sockets Inc. generates revenue through the sale of its electronic components and software solutions. The company has established key partnerships with various electronics manufacturers and distributors, allowing it to reach a wide market. Revenue streams include direct sales of its proprietary products, licensing fees from software tools, and long-term supply contracts with major industry players. Additionally, Sockets Inc. benefits from providing custom engineering services and technical support to its clients, further contributing to its earnings.

Sockets Inc. Financial Statement Overview

Summary

Sockets Inc. demonstrates financial stability with no debt and a strong equity position. However, it struggles with profitability and cash flow generation, as indicated by negative revenue growth and profitability margins. The company needs to focus on improving operational efficiency and generating positive cash flows.

Income Statement

The company has faced declining revenues over the past year, with a revenue decrease of approximately 1.5%. Both Gross Profit Margin and Net Profit Margin are negative, indicating operational inefficiencies and a lack of profitability. The EBIT and EBITDA margins have also been negative, showing ongoing challenges in controlling operating costs.

Balance Sheet

The company maintains a strong equity position with no debt, indicated by a Debt-to-Equity Ratio of 0. The Equity Ratio stands at 72.73%, reflecting financial stability and resilience. However, the negative Return on Equity of -14.2% highlights profitability challenges.

Cash Flow

The Free Cash Flow is negative, but there has been a significant improvement in Operating Cash Flow compared to previous periods. The Operating Cash Flow to Net Income Ratio shows improvement, although Free Cash Flow to Net Income Ratio remains unfavorable, indicating challenges in generating free cash flow from operations.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.04B	1.02B	994.61M	873.19M	994.29M
Gross Profit	475.93M	468.71M	506.26M	425.49M	469.92M
EBITDA	-138.50M	-79.15M	-27.82M	-83.17M	9.53M
Net Income	-139.13M	-100.26M	-26.89M	-150.24M	-51.44M
Balance Sheet
Total Assets	814.73M	970.85M	1.04B	1.05B	1.21B
Cash, Cash Equivalents and Short-Term Investments	464.96M	678.66M	722.56M	788.11M	793.97M
Total Debt	0.00	0.00	0.00	0.00	0.00
Total Liabilities	262.48M	264.80M	224.33M	200.01M	203.76M
Stockholders Equity	552.25M	706.05M	813.05M	854.64M	1.00B
Cash Flow
Free Cash Flow	-151.98M	-15.73M	-55.59M	-23.87M	35.71M
Operating Cash Flow	-151.77M	-14.86M	-44.79M	-14.06M	57.28M
Investing Cash Flow	-54.59M	-21.63M	-13.40M	15.52M	-21.57M
Financing Cash Flow	-7.33M	-7.42M	-7.36M	-7.33M	-7.36M

Sockets Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 746.00
• 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:3634, the sentiment is Positive. The current price of 746 is above the 20-day moving average (MA) of 706.60, above the 50-day MA of 706.48, and above the 200-day MA of 622.21, indicating a bullish trend. The MACD of 10.54 indicates Negative momentum. The RSI at 61.59 is Neutral, neither overbought nor oversold. The STOCH value of 58.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3634.

Sockets Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9250	63 Neutral	¥1.34B	22.06	―	―	5.17%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3908	60 Neutral	¥1.36B	9.57	―	―	-10.98%	―
3634	54 Neutral	¥1.73B	―	―	0.40%	6.81%	62.28%
9240	51 Neutral	¥2.53B	71.68	―	―	1.37%	-78.02%
7093	45 Neutral	¥1.20B	―	―	―	1.68%	73.17%
4316	44 Neutral	¥3.36B	-17.26	―	―	11.96%	-453.36%