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

• Market Cap: ¥7.72B
• Dividend Yield: 9.35%
• Average Volume (3M): 607.56K
• Price to Earnings (P/E): 11.9
• Beta (1Y): 0.36
• Revenue Growth: 16.07%
• EPS Growth: 72.83%
• Country: JP
• Employees: 220
• Sector: Healthcare
• Sector Strength: 44
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 7.35
• Shares Outstanding: 24,050,800
• 10 Day Avg. Volume: 1,749,710
• 30 Day Avg. Volume: 607,563
• PEG Ratio: 0.09
• Price to Book (P/B): 0.55
• 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: ¥1,155.00
• Price Target Upside: 259.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 85 Outperform
• Price Target: ¥385.00 ▲(19.94%Upside)

Softmax Co., Ltd. is well-positioned with strong financial performance and technical indicators showing bullish trends. The stock's valuation appears reasonable, although the high dividend yield suggests unusual financial practices. The absence of earnings call and corporate events data limits the scope of analysis.

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

Company Description

Softmax Co., Ltd. is a Japanese company primarily engaged in the information technology sector. The company specializes in providing software solutions and IT services, focusing on areas such as system integration, software development, and IT consulting. Softmax Co., Ltd. serves a diverse range of industries with tailored technological solutions designed to enhance operational efficiency and digital transformation.

How the Company Makes Money

Softmax Co., Ltd. generates revenue primarily through its software development and IT service offerings. The company earns income by engaging in system integration projects, which involve creating bespoke software solutions tailored to the specific needs of its clients. Additionally, Softmax provides IT consulting services, advising businesses on optimizing their technological infrastructure and strategies. The company may also establish significant partnerships with other tech firms or industry players to expand its service offerings and client base, further contributing to its revenue streams.

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 a high equity ratio, while cash flows are robust, supporting operational and strategic initiatives. However, continued focus on managing liabilities and cost efficiency will be essential.

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	1.55B	1.44B	1.45B	1.24B
EBITDA	745.36M	609.00M	624.09M	652.10M	526.75M
Net Income	480.15M	452.00M	419.39M	422.55M	334.81M
Balance Sheet
Total Assets	7.54B	6.72B	6.55B	5.76B	5.69B
Cash, Cash Equivalents and Short-Term Investments	3.45B	2.92B	2.85B	2.76B	2.82B
Total Debt	1.41B	1.33B	1.35B	1.38B	1.71B
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: 321.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 321 is above the 20-day moving average (MA) of 298.55, above the 50-day MA of 261.67, and above the 200-day MA of 222.86, indicating a bullish trend. The MACD of 20.86 indicates Positive momentum. The RSI at 56.64 is Neutral, neither overbought nor oversold. The STOCH value of 15.46 is Positive, 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	85 Outperform	¥7.72B	11.92		9.35%	16.07%	72.83%
4172	76 Outperform	¥5.05B	12.22		3.88%	23.59%	122.48%
6545	74 Outperform	¥3.46B	13.51		1.86%	4.08%	94.18%
9218	60 Neutral	¥6.66B	20.56		―	105.21%	431.02%
Sector *	52 Neutral	$7.47B	-0.04	-63.86%	2.34%	16.17%	0.25%
3628	50 Neutral	¥7.63B	―		―	16.49%	-483.70%
6034	50 Neutral	¥3.90B	―		―	-7.73%	-303.99%