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Encourage Technologies Co., Ltd. (JP:3682)
:3682
Japanese Market

Encourage Technologies Co., Ltd. (3682) AI Stock Analysis

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JP

Encourage Technologies Co., Ltd.

(3682)

Rating:63Neutral
Price Target:
Encourage Technologies Co., Ltd. shows strong financial performance with robust revenue growth and a solid, debt-free balance sheet. However, the stock's technical indicators suggest a bearish trend, and the lack of momentum metrics adds uncertainty. The valuation is reasonable with a good dividend yield, but overall market sentiment needs monitoring due to current price trends.

Encourage Technologies Co., Ltd. (3682) vs. iShares MSCI Japan ETF (EWJ)

Encourage Technologies Co., Ltd. Business Overview & Revenue Model

Company DescriptionEncourage Technologies Co., Ltd. (3682) is a Japanese company that specializes in providing IT solutions and software development services. The company's core products and services include enterprise resource planning (ERP) software, IT management solutions, and various software development services tailored to meet the specific needs of businesses across different sectors. Encourage Technologies focuses on enhancing business productivity and efficiency through innovative technology solutions.
How the Company Makes MoneyEncourage Technologies Co., Ltd. generates revenue primarily through the sale and licensing of its software products and IT solutions. The company offers its ERP software and IT management solutions to a wide range of industries, thus ensuring a steady stream of licensing fees and subscription-based revenues. Additionally, Encourage Technologies provides custom software development services, which contribute to its earnings through project-based contracts with clients. The company may also benefit from strategic partnerships and collaborations with other technology firms and business entities, which can enhance its market reach and customer base.

Encourage Technologies Co., Ltd. Financial Statement Overview

Summary
Encourage Technologies Co., Ltd. demonstrates strong financial health with robust revenue growth, excellent profitability margins, and a debt-free balance sheet. While cash flow performance is improving significantly, historical volatility suggests a need for strategic management. The company is well-positioned in the Information Technology Services industry, supported by solid financial metrics and growth potential.
Income Statement
85
Very Positive
The income statement shows strong performance with a Gross Profit Margin of 50.54% and a significant improvement in Net Profit Margin at 8.76% in the latest period. Revenue growth is robust at 17.8% from the previous year, indicating a healthy demand for services. The EBIT Margin of 12.76% and EBITDA Margin of 27.72% point to effective cost control and operational efficiency. Overall, profitability metrics demonstrate a positive trajectory.
Balance Sheet
90
Very Positive
The balance sheet is solid with a Debt-to-Equity Ratio of 0, reflecting no leverage and a strong equity position. Return on Equity (ROE) stands at 6.39%, showing a stable return for shareholders. The Equity Ratio is high at 70.19%, indicating financial stability and low risk. Overall, the company maintains a strong and stable financial position with ample liquidity and no debt burden.
Cash Flow
75
Positive
Cash flow analysis reveals impressive Free Cash Flow growth, recovering from negative to positive territory, reflecting improved cash management. The Operating Cash Flow to Net Income Ratio of 3.94 indicates strong cash generation relative to net income, supporting operational activities. However, prior volatility in cash flow metrics suggests potential risks in cash management strategies. Overall, cash flow performance is strengthening but requires careful monitoring.
BreakdownTTMMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue2.35B2.50B2.50B2.12B2.07B1.80B
Gross Profit1.31B1.29B1.26B1.40B1.30B1.18B
EBITDA438.59M587.04M692.53M350.04M432.48M255.38M
Net Income221.15M220.24M218.86M174.76M248.59M138.67M
Balance Sheet
Total Assets4.66B4.66B4.88B4.21B4.44B3.90B
Cash, Cash Equivalents and Short-Term Investments3.76B3.71B3.76B3.39B3.74B3.28B
Total Debt0.000.000.000.000.000.00
Total Liabilities1.32B1.15B1.46B866.14M1.15B729.67M
Stockholders Equity3.34B3.51B3.43B3.34B3.29B3.17B
Cash Flow
Free Cash Flow506.20M312.97M503.05M-216.51M567.06M348.06M
Operating Cash Flow506.20M345.94M862.64M3.88M741.15M436.93M
Investing Cash Flow0.00-261.88M-364.19M-226.66M-164.49M59.37M
Financing Cash Flow0.00-134.29M-134.29M-120.86M-120.86M-235.52M

Encourage Technologies Co., Ltd. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price618.00
Price Trends
50DMA
614.36
Positive
100DMA
601.95
Positive
200DMA
585.67
Positive
Market Momentum
MACD
2.22
Negative
RSI
56.00
Neutral
STOCH
48.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3682, the sentiment is Positive. The current price of 618 is above the 20-day moving average (MA) of 615.80, above the 50-day MA of 614.36, and above the 200-day MA of 585.67, indicating a bullish trend. The MACD of 2.22 indicates Negative momentum. The RSI at 56.00 is Neutral, neither overbought nor oversold. The STOCH value of 48.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3682.

Encourage Technologies Co., Ltd. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (69)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
¥1.35T29.91
1.72%24.10%11.27%
72
Outperform
¥167.91B39.51
0.82%16.68%43.49%
69
Neutral
¥2.69T37.6415.31%1.37%8.65%12.22%
69
Neutral
¥231.71B14.677.64%2.71%9.09%8.52%
66
Neutral
¥34.11B20.78
4.82%8.11%7.91%
63
Neutral
¥4.12B18.69
3.24%9.26%1.71%
55
Neutral
¥1.30B24.17
-6.55%-215.26%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:3682
Encourage Technologies Co., Ltd.
621.00
-9.10
-1.44%
JP:4316
BeMap, Inc.
373.00
-17.00
-4.36%
JP:4776
Cybozu, Inc.
3,740.00
1,814.00
94.18%
JP:9629
PCA Corporation
1,802.00
-441.95
-19.70%
JP:9719
SCSK Corporation
4,348.00
1,263.05
40.94%
JP:4684
OBIC Co
5,530.00
1,458.01
35.81%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Apr 08, 2025