Softmax Co., Ltd. (Japan) (3671) AI Stock Analysis

• Market Cap: ¥5.35B
• Dividend Yield: 3.36%
• Average Volume (3M): 22.89K
• Price to Earnings (P/E): 8.3
• Beta (1Y): 0.37
• Revenue Growth: 16.07%
• EPS Growth: 72.83%
• Country: JP
• Employees: 220
• Sector: Healthcare
• Sector Strength: 40
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 29.40
• Shares Outstanding: 5,999,364
• 10 Day Avg. Volume: 16,990
• 30 Day Avg. Volume: 22,890
• PEG Ratio: 3.99
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: 82 Outperform
• Price Target: ―

Softmax Co., Ltd. receives a solid score driven by its robust financial performance and attractive valuation. The company's strong revenue growth, profitability improvements, and healthy cash flow management underscore its financial strength. The stock's upward momentum is positive, although technical indicators suggest caution due to overbought conditions. The compelling P/E ratio and dividend yield enhance its attractiveness. However, investors should monitor technical signals for potential pullbacks.

Softmax Co., Ltd. (Japan) Business Overview & Revenue Model

Company Description

Softmax Co., Ltd. is a Japanese company that operates primarily in the information technology sector. The company specializes in providing software development services, IT consultancy, and system integration solutions. Softmax Co., Ltd. caters to a diverse range of industries, offering innovative technology solutions to enhance business operations and efficiency.

How the Company Makes Money

Softmax Co., Ltd. generates revenue through multiple streams, primarily from its software development services, IT consultancy, and system integration projects. The company earns money by developing custom software solutions tailored to the specific needs of its clients across various industries. Additionally, Softmax Co., Ltd. provides IT consulting services, which include strategy development, system implementation, and business process optimization. System integration services also contribute to the company's revenue, allowing clients to seamlessly integrate new technologies into their existing systems. The company may have partnerships with technology vendors or other IT service providers, enhancing their service offerings and market reach.

Softmax Co., Ltd. (Japan) Financial Statement Overview

Summary

Softmax Co., Ltd. demonstrates strong financial health with consistent revenue growth and profitability improvements. The balance sheet is stable with moderate leverage and high equity ratio, while cash flows are robust, supporting operational and strategic initiatives. Continued focus on managing liabilities and cost efficiency will be essential to maintain this trajectory.

Income Statement

Softmax Co., Ltd. has shown impressive revenue growth, moving from 5.26 billion JPY in 2023 to 5.43 billion JPY in 2024, a growth rate of approximately 3.19%. The gross profit margin has improved from 29.75% to 30.78%, and the net profit margin increased from 8.59% to 8.84%. The EBIT margin also rose from 11.04% to 12.20%. These metrics suggest strong profitability and operational efficiency. However, the EBITDA margin increment is modest, indicating a slight increase in non-operating expenses.

Balance Sheet

The balance sheet shows a solid equity position with a debt-to-equity ratio of 0.40, reflecting moderate leverage. The company has a healthy equity ratio of 46.68%, indicating a strong asset base funded by equity. Return on equity (ROE) stands at 13.65%, showcasing efficient use of equity to generate profits. Nonetheless, there is room for improvement in reducing liabilities to further strengthen the financial structure.

Cash Flow

Softmax Co., Ltd. exhibits robust cash flow management, with free cash flow growing from 215 million JPY in 2023 to 624 million JPY in 2024, a significant growth rate of 190.23%. The operating cash flow to net income ratio is 1.38, and the free cash flow to net income ratio is 1.30, indicating effective conversion of income to cash. The company's strong cash position supports its ability to fund operations and invest in growth.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.43B	5.26B	5.05B	4.49B	4.02B
	Gross Profit
1.67B	1.56B	1.44B	1.45B	1.24B
	EBIT
662.53M	581.00M	547.57M	589.53M	445.72M
	EBITDA
745.36M	609.00M	624.09M	652.10M	526.75M
	Net Income Common Stockholders
480.15M	452.00M	419.39M	422.55M	334.81M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.45B	2.92B	2.85B	2.76B	2.82B
	Total Assets
7.54B	6.72B	6.55B	5.76B	5.69B
	Total Debt
1.41B	1.33B	1.35B	1.38B	1.71B
	Net Debt
-2.04B	-1.59B	-1.50B	-1.38B	-1.11B
	Total Liabilities
4.02B	3.50B	3.61B	3.14B	3.43B
	Stockholders Equity
3.52B	3.22B	2.94B	2.62B	2.26B
Cash Flow		Free Cash Flow
624.00M	215.00M	163.80M	259.73M	22.05M
	Operating Cash Flow
663.00M	232.00M	179.73M	284.30M	429.04M
	Investing Cash Flow
-92.76M	-11.00M	-4.75M	-1.01M	-400.13M
	Financing Cash Flow
-100.22M	-200.04M	-144.93M	-401.85M	-100.12M

Softmax Co., Ltd. (Japan) Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 892.00
• 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:3671, the sentiment is Positive. The current price of 892 is below the 20-day moving average (MA) of 893.60, above the 50-day MA of 857.00, and above the 200-day MA of 826.20, indicating a bullish trend. The MACD of 12.09 indicates Positive momentum. The RSI at 54.23 is Neutral, neither overbought nor oversold. The STOCH value of 22.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3671.

Softmax Co., Ltd. (Japan) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3671	82 Outperform	¥5.35B	8.28		3.36%	16.07%	72.83%
4172	76 Outperform	¥4.81B	11.64		4.76%	23.59%	122.48%
6545	69 Neutral	¥3.63B	14.09		1.78%	4.62%	55.87%
9218	61 Neutral	¥7.34B	21.79		―	105.21%	431.02%
Sector *	53 Neutral	$5.14B	3.23	-45.01%	2.85%	17.55%	-0.69%
6034	50 Neutral	¥3.88B	―		―	-7.73%	-303.99%
3628	42 Neutral	¥5.76B	―		―	-9.71%	-484.01%