CERES INC. (3696) AI Stock Analysis

• Market Cap: ¥27.32B
• Dividend Yield: 2.65%
• Average Volume (3M): 914.68K
• Price to Earnings (P/E): 46.0
• Beta (1Y): 1.51
• Revenue Growth: 13.50%
• EPS Growth: -45.84%
• Country: JP
• Employees: 669
• Sector: Industrials
• Sector Strength: 85
• Industry: Conglomerates
• EPS (TTM): -4.97
• Shares Outstanding: 12,116,500
• 10 Day Avg. Volume: 970,330
• 30 Day Avg. Volume: 914,680
• PEG Ratio: -0.68
• Price to Book (P/B): 2.34
• 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: 74 Outperform
• Price Target: ¥2,461.00 ▲(4.06%Upside)

CERES INC.'s overall stock score reflects strong financial performance, particularly in revenue growth and profitability, which are key strengths. The technical analysis indicates positive momentum, though caution is advised due to the high P/E ratio suggesting potential overvaluation. The attractive dividend yield provides an income benefit, but improvements in cash flow management are necessary for sustained growth.

CERES INC. Business Overview & Revenue Model

Company Description

Ceres Inc. is a Japanese company listed on the Tokyo Stock Exchange that specializes in the development and operation of various internet services. The company engages primarily in the digital advertisement sector and mobile content services, offering a range of solutions that include point services, affiliate advertising, and financial technology-related services. Ceres Inc.'s core offerings are designed to enhance user engagement and satisfaction for both businesses and consumers through innovative digital products.

How the Company Makes Money

Ceres Inc. generates revenue primarily through its digital advertising services and mobile content offerings. The company earns money by providing affiliate advertising solutions, where it acts as an intermediary between advertisers and publishers, taking a commission or fee for facilitating transactions. Additionally, Ceres Inc. operates point services, which involve loyalty programs and reward systems that attract user engagement and business partnerships. The company also explores financial technology services, providing platforms that facilitate digital transactions, contributing another revenue stream. Significant partnerships with various digital content providers and advertisers further bolster its earnings by expanding its reach and enhancing service offerings.

CERES INC. Financial Statement Overview

Summary

CERES INC. shows strong revenue growth and improving profitability margins with a solid equity base and prudent debt levels. However, cash flow management requires improvement, particularly in cash conversion efficiency.

Income Statement

CERES INC. demonstrates strong financial performance with consistent revenue growth and improving profitability. The gross profit margin has increased to 48.1%, and the net profit margin has improved to 5.3% over the past year. Revenue growth rate is impressive at 15.1% from the previous year, indicating robust top-line expansion. EBIT margin is also solid at 8.0%, reflecting efficient operations.

Balance Sheet

The balance sheet shows a healthy equity base with a debt-to-equity ratio of 0.85, indicating balanced leverage. Return on Equity (ROE) is fairly strong at 13.3%, demonstrating effective utilization of equity. The equity ratio stands at 33.8%, reflecting moderate financial stability. Despite increased liabilities, the company maintains a cautious approach to debt.

Cash Flow

CERES INC.'s cash flow statements reveal a decline in operating cash flow to net income ratio, now at 0.49, suggesting potential inefficiencies in cash generation. However, free cash flow remains positive, albeit with a negative growth rate of -28.8%, indicating room for improvement in cash management. Free cash flow to net income ratio is at 0.27, showing modest cash conversion.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
27.71B	24.07B	20.54B	23.40B	20.21B
	Gross Profit
13.34B	10.59B	8.06B	7.77B	6.25B
	EBIT
2.23B	1.12B	699.05M	4.35B	1.50B
	EBITDA
2.88B	1.33B	1.12B	4.32B	1.76B
	Net Income Common Stockholders
1.48B	451.15M	115.17M	2.78B	744.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
14.13B	11.09B	9.29B	9.14B	7.89B
	Total Assets
32.98B	25.92B	22.60B	20.23B	16.23B
	Total Debt
9.52B	7.36B	5.89B	4.22B	3.82B
	Net Debt
-2.06B	-749.64M	-660.73M	-2.63B	-2.26B
	Total Liabilities
20.25B	15.87B	12.90B	10.41B	9.14B
	Stockholders Equity
11.15B	9.19B	8.88B	9.08B	6.52B
Cash Flow		Free Cash Flow
397.00M	557.52M	-314.19M	983.77M	1.86B
	Operating Cash Flow
722.00M	1.06B	101.78M	1.16B	2.26B
	Investing Cash Flow
-518.00M	-738.91M	-1.69B	-787.23M	-482.52M
	Financing Cash Flow
3.27B	1.23B	1.19B	408.15M	363.41M

CERES INC. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2365.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3696, the sentiment is Positive. The current price of 2365 is above the 20-day moving average (MA) of 2129.00, above the 50-day MA of 2088.30, and above the 200-day MA of 2204.32, indicating a bullish trend. The MACD of 62.67 indicates Negative momentum. The RSI at 61.24 is Neutral, neither overbought nor oversold. The STOCH value of 81.89 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3696.

CERES INC. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4685	75 Outperform	¥45.00B	13.30		2.97%	15.38%	39.87%
3696	74 Outperform	¥27.32B	46.04		2.65%	13.50%	-45.84%
4439	70 Outperform	¥31.18B	14.12		0.67%	29.19%	36.99%
9564	68 Neutral	¥16.57B	25.83		1.59%	26.93%	35.46%
Sector *	66 Neutral	$4.49B	12.22	5.40%	3.71%	4.17%	-11.97%
2462	65 Neutral	¥26.48B	11.55		4.20%	1.03%	-14.22%
9248	47 Neutral	¥14.58B	―		3.70%	5.14%	-133.65%

CERES INC. Corporate Events

CERES INC. Revises 2025 Earnings Forecast Following Strategic Subsidiary Share Transfer

CERES INC. has revised its full-year consolidated earnings forecast for 2025 following the transfer of shares of its subsidiary YUMEMI Inc., which will no longer be part of its consolidated operations. This strategic move is expected to result in an extraordinary gain, leading to an upward revision of the company’s net income for the fiscal year, reflecting positively on its financial health and market strategy.

CERES INC. Finalizes Share Transfer of YUMEMI Inc.

CERES INC. has completed the transfer of all shares of its subsidiary YUMEMI Inc. to Accenture Japan Ltd., resulting in YUMEMI’s exclusion from CERES INC.’s consolidated financial results. The financial impact of this transaction will be reflected in the company’s revised earnings forecast for the fiscal year ending December 31, 2025.

CERES INC. to Transfer YUMEMI Shares to Accenture

CERES INC. has agreed to transfer its shares of YUMEMI Inc. to Accenture for approximately ¥3.7 billion, with the transaction expected to close in the second quarter of 2025. This move allows CERES to reallocate resources to its core businesses and enhance shareholder returns, while recording significant gains from the sale.

CERES INC. Transfers YUMEMI Shares to Accenture, Refocuses on Core Business

CERES INC. has announced the transfer of all shares of its consolidated subsidiary, YUMEMI Inc., to Accenture Japan Ltd. This strategic move aligns with CERES INC.’s focus on reallocating resources towards its core businesses and achieving its Medium-Term Management Plan 2026. The transfer is expected to result in an extraordinary gain for CERES INC. and is seen as beneficial for YUMEMI’s future growth, leveraging Accenture’s global network and capabilities. Post-transfer, CERES INC. will concentrate on expanding its point-based economic sphere and enhancing corporate value.

CERES INC. Announces Strategic Plan to Enhance Corporate Value

CERES INC. has announced an action plan to enhance corporate value by focusing on capital cost and stock price management. Despite high stock price volatility, the company has achieved record earnings in its mobile services and improved profitability in its blockchain business, resulting in a return on equity of 14.6%. The company aims to sustain growth through strategic investments, shareholder returns, and M&A opportunities, while enhancing its business portfolio in mobile services, financial services, and blockchain.