Hotto Link, Inc. (3680) AI Stock Analysis

• Market Cap: ¥4.17B
• Dividend Yield: 1.17%
• Average Volume (3M): 238.27K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.96
• Revenue Growth: -21.76%
• EPS Growth: -5832.28%
• Country: JP
• Employees: 140
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -1.70
• Shares Outstanding: 15,965,800
• 10 Day Avg. Volume: 211,960
• 30 Day Avg. Volume: 238,273
• PEG Ratio: 0.02
• Price to Book (P/B): 0.65
• Price to Sales (P/S): 0.90
• P/FCF Ratio: 12.97
• 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: 52 Neutral
• Price Target: ¥272.00 ▲(6.67% Upside)

The score is primarily weighed down by deteriorating profitability and declining revenue, partially offset by a solid balance sheet with low leverage and positive free cash flow. Technicals add modest support via near-term momentum, while valuation remains challenged due to a negative P/E despite a moderate dividend yield.

Positive Factors

Low leverage / strong balance sheet

Low reported leverage (debt/equity ≈0.15) and sizable equity provide balance-sheet flexibility to absorb ongoing losses and fund strategic initiatives. This structural buffer reduces near-term refinancing risk, supports investment in products or M&A, and helps the company withstand industry cyclicality.

Positive operating and free cash flow

Positive operating cash flow (~243M) and free cash flow (~136M) indicate the business still converts operations into cash despite accounting losses. Durable cash generation gives runway for product development, client retention investments, and working capital needs while management pursues a path back to profitability.

Resilient gross margins

Gross margins holding in the low‑30% range show core service and product economics remain viable. Reliable unit economics provide a foundation for operating leverage when revenue stabilizes, enabling margin recovery through cost discipline and scaling of higher-margin services over the medium term.

Negative Factors

Deteriorating profitability

A TTM net loss (≈-23% margin) and negative operating profit represent a material swing from prior profitable years. Persistent operating deficits erode retained earnings, constrain reinvestment capacity, and may force restructuring or dilution, threatening the firm’s ability to sustain competitive investments long-term.

Declining revenue trend

Contracting revenue (TTM down ~3% and recent RevenueGrowth ~-21.8%) suggests weaker demand or client churn. Sustained top-line decline reduces operating leverage and makes margin recovery more difficult, limiting the company’s ability to scale its analytics platform and achieve lasting profitability improvements.

Weak cash conversion and negative ROE

Operating cash flow covering only ~1/3 of net loss and TTM ROE ≈-14.8% signal weak cash conversion and shareholder value destruction. Continued losses could erode the balance sheet buffer, increase financing needs, and limit the company’s capacity to invest in growth or sustain dividends over the medium term.

Hotto Link, Inc. Business Overview & Revenue Model

Company Description

Hottolink, Inc. offers social media marketing support that collects, analyzes, and utilizes social big data in Japan. The company provides SNS marketing support, Twitter marketing support, Instagram marketing support, influencer marketing support, post campaign, and creative production. It also engages in the SNS data access rights and investment management business activities. The company was incorporated in 2000 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Hotto Link generates revenue through a combination of service fees and subscription models associated with its digital marketing and analytics platforms. The primary revenue streams include consulting services for data analysis, software licensing for proprietary tools, and performance-based marketing solutions. Additionally, the company may form strategic partnerships with other technology firms and brands to expand its service offerings and reach new client segments, which can enhance its earnings potential.

Hotto Link, Inc. Financial Statement Overview

Summary

Financials are mixed: profitability has deteriorated sharply with TTM net loss and contracting revenue, but leverage is modest (debt-to-equity ~0.15) and both operating cash flow and free cash flow remain positive, providing some runway despite weakened cash conversion versus prior periods.

Income Statement

Profitability has deteriorated sharply versus prior years. TTM (Trailing-Twelve-Months) shows a net loss (-23.0% margin) and negative operating profit, following a move from solid profitability in 2021–2022 to a loss in 2024 and deeper losses in TTM. Revenue has also been contracting (TTM down ~3% with declines across recent annual periods), which limits operating leverage and makes a near-term margin rebound less certain. The key positive is that gross margin has held around the low-30% range in recent periods, suggesting the core offering still carries reasonable unit economics even though operating costs are pressuring results.

Balance Sheet

The balance sheet is a relative strength: leverage is modest with debt-to-equity around 0.15 in TTM (Trailing-Twelve-Months) and down versus earlier years, providing flexibility. Equity remains sizable versus total assets, which helps cushion volatility. The main weakness is returns to shareholders have turned negative (TTM return on equity about -14.8%), reflecting the current loss-making profile; if losses persist, balance sheet strength could erode over time.

Cash Flow

Cash generation is better than reported earnings, with positive operating cash flow in TTM (Trailing-Twelve-Months) (~243M) and positive free cash flow (~136M). However, cash conversion has weakened versus 2023–2024: operating cash flow covers only about one-third of net loss in TTM, and free cash flow is meaningfully lower than the prior year (despite a strong TTM free cash flow growth rate off a lower base). Overall, the company is still producing cash, but the trajectory is less consistent and should be monitored alongside ongoing net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.59B	4.27B	4.74B	7.91B	6.57B	4.39B
Gross Profit	1.16B	1.29B	1.57B	2.16B	2.16B	1.61B
EBITDA	-348.05M	-40.26M	699.00M	2.74B	1.48B	361.65M
Net Income	-825.08M	-564.63M	226.00M	1.82B	764.29M	18.63M
Balance Sheet
Total Assets	7.15B	7.87B	8.49B	8.47B	7.31B	5.77B
Cash, Cash Equivalents and Short-Term Investments	2.85B	3.30B	3.50B	3.60B	2.60B	2.07B
Total Debt	829.56M	978.25M	1.18B	1.35B	1.69B	1.54B
Total Liabilities	1.73B	2.02B	2.35B	2.52B	3.18B	2.80B
Stockholders Equity	5.42B	5.86B	6.14B	5.95B	3.87B	2.79B
Cash Flow
Free Cash Flow	135.80M	295.00M	688.00M	478.36M	403.90M	180.62M
Operating Cash Flow	242.50M	295.60M	698.00M	793.56M	678.71M	466.43M
Investing Cash Flow	-464.04M	-432.91M	-716.00M	-291.06M	-536.01M	-342.14M
Financing Cash Flow	-239.07M	-193.11M	-154.00M	375.77M	307.87M	255.90M

Hotto Link, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 255.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3680, the sentiment is Negative. The current price of 255 is below the 20-day moving average (MA) of 268.50, below the 50-day MA of 260.69, and below the 200-day MA of 278.15, indicating a neutral trend. The MACD of 1.98 indicates Positive momentum. The RSI at 50.46 is Neutral, neither overbought nor oversold. The STOCH value of 27.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3680.

Hotto Link, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3858	70 Outperform	¥3.95B	-123.42	―	―	4.78%	-234.94%
4178	62 Neutral	¥2.32B	53.47	―	―	-8.81%	-63.23%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3680	52 Neutral	¥4.17B	-5.05	―	1.17%	-21.76%	-5832.28%
4288	51 Neutral	¥2.37B	-9.68	―	―	20.46%	37.56%
4378	48 Neutral	¥1.43B	-9.65	―	―	-8.08%	-428.39%
6662	48 Neutral	¥3.59B	-9.31	―	―	24.22%	-22.37%