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

• Market Cap: ¥7.74B
• Dividend Yield: 9.15%
• Average Volume (3M): 140.46K
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.39
• Revenue Growth: 32.95%
• EPS Growth: 45.22%
• Country: JP
• Employees: 220
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Healthcare Information Services
• EPS (TTM): 3.72
• Shares Outstanding: 24,050,800
• 10 Day Avg. Volume: 144,320
• 30 Day Avg. Volume: 140,460
• PEG Ratio: 0.44
• Price to Book (P/B): 0.36
• Price to Sales (P/S): 0.23
• P/FCF Ratio: 2.01
• 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: 67 Neutral
• Price Target: ¥372.00 ▲(13.41% Upside)

Softmax Co., Ltd. has a strong financial performance, which is the most significant factor contributing to its overall score. The company's robust cash flow and profitability improvements are key strengths. However, the technical analysis indicates bearish momentum, which negatively impacts the score. The valuation is attractive, with a reasonable P/E ratio and high dividend yield, suggesting potential undervaluation. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective product offerings, supporting long-term business expansion.

Cash Flow Management

Robust cash flow growth enhances the company's ability to fund operations and invest in strategic initiatives, ensuring financial stability.

Profitability Improvements

Improving profit margins reflect operational efficiency and effective cost management, contributing to sustainable financial health.

Negative Factors

Moderate Leverage

While leverage is moderate, reducing liabilities could further strengthen the balance sheet, enhancing financial resilience.

Modest EBITDA Margin Growth

Limited growth in EBITDA margin suggests potential challenges in managing non-operating expenses, which could impact profitability.

Bearish Technical Indicators

Bearish technical indicators may reflect market skepticism, potentially affecting investor confidence and stock performance.

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

Company Description

Softmax Co., Ltd. (3671) is a Japanese company specializing in the development and provision of software solutions and technology services. The company operates primarily in the sectors of IT consulting, software development, and cloud services, focusing on delivering innovative tools and applications that enhance business operations. Softmax is known for its core products in enterprise resource planning (ERP) systems, customer relationship management (CRM) solutions, and data analytics platforms, serving a diverse range of industries including finance, healthcare, and manufacturing.

How the Company Makes Money

Softmax Co., Ltd. generates revenue through multiple streams, primarily from software licensing, subscription models, and consulting services. The company earns money by selling licenses for its proprietary software solutions, which are used by businesses to improve their operational efficiency. Additionally, Softmax offers subscription-based services for its cloud-based applications, providing customers with ongoing access to updates and support. Consulting services also contribute significantly to its revenue, as the company assists clients in integrating and customizing software solutions to meet their specific needs. Strategic partnerships with other technology firms and collaborations with industry leaders further enhance its market reach and create additional revenue opportunities.

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. 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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.94B	5.43B	5.26B	5.05B	4.49B	4.02B
Gross Profit	1.88B	1.67B	1.57B	1.44B	1.45B	1.24B
EBITDA	962.17M	745.36M	658.89M	624.09M	652.10M	526.75M
Net Income	646.45M	480.15M	452.00M	419.39M	422.55M	334.81M
Balance Sheet
Total Assets	7.04B	7.54B	6.72B	6.55B	5.76B	5.69B
Cash, Cash Equivalents and Short-Term Investments	3.11B	3.45B	2.92B	2.85B	2.76B	2.82B
Total Debt	1.00B	1.41B	1.33B	1.35B	1.38B	1.71B
Total Liabilities	3.38B	4.02B	3.50B	3.61B	3.14B	3.43B
Stockholders Equity	3.65B	3.52B	3.22B	2.94B	2.62B	2.26B
Cash Flow
Free Cash Flow	0.00	624.00M	215.00M	163.80M	259.73M	22.05M
Operating Cash Flow	0.00	663.00M	232.00M	179.73M	284.30M	429.04M
Investing Cash Flow	0.00	-92.76M	-11.00M	-4.75M	-1.01M	-400.13M
Financing Cash Flow	0.00	-100.22M	-200.04M	-144.93M	-401.85M	-100.12M

Softmax Co., Ltd. (Japan) Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 328.00
• 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:3671, the sentiment is Negative. The current price of 328 is below the 20-day moving average (MA) of 364.30, below the 50-day MA of 373.38, and above the 200-day MA of 288.88, indicating a neutral trend. The MACD of -14.23 indicates Positive momentum. The RSI at 33.59 is Neutral, neither overbought nor oversold. The STOCH value of 31.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
4172	76 Outperform	¥5.28B	11.79	―	3.92%	13.85%	11.52%
6545	74 Outperform	¥3.26B	13.05	―	1.90%	6.68%	2.86%
9218	73 Outperform	¥8.78B	26.60	―	―	41.16%	2750.91%
3671	67 Neutral	¥7.74B	11.38	―	9.15%	32.95%	45.22%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
6034	45 Neutral	¥3.57B	-13.00	―	―	1.51%	-13.66%
3628	41 Neutral	¥7.85B	-2.61	―	―	-4.07%	-88.89%