CERES INC. (3696) AI Stock Analysis

• Market Cap: ¥30.96B
• Dividend Yield: 2.24%
• Average Volume (3M): 744.44K
• Price to Earnings (P/E): 52.2
• Beta (1Y): 1.57
• Revenue Growth: 13.50%
• EPS Growth: -45.84%
• Country: JP
• Employees: 669
• Sector: Industrials
• Sector Strength: 91
• Industry: Conglomerates
• EPS (TTM): -4.97
• Shares Outstanding: 12,116,500
• 10 Day Avg. Volume: 586,860
• 30 Day Avg. Volume: 744,436
• PEG Ratio: -0.84
• Price to Book (P/B): 2.89
• 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: ¥2,461.00
• Price Target Upside: -8.17% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 76 Outperform
• Price Target: ¥3,028.00 ▲(12.99%Upside)

The stock is rated 76, driven by strong technical analysis indicating upward momentum, supported by solid financial performance. Despite a high P/E ratio suggesting overvaluation, the stock's robust revenue growth and improving profitability make it attractive, though cash flow management needs attention.

CERES INC. Business Overview & Revenue Model

Company Description

CERES INC. (3696) is a Japanese company specializing in the development and provision of digital marketing solutions. The company is primarily involved in the internet service sector, offering mobile advertising, media management, and digital content services. CERES INC. leverages its expertise in technology and marketing to help businesses optimize their online presence and reach their target audiences effectively.

How the Company Makes Money

CERES INC. generates revenue through a combination of digital advertising services, media management, and digital content delivery. The company earns money by providing advertising solutions that help businesses increase their visibility and customer engagement through mobile and online platforms. Key revenue streams include fees from advertising placements, media management services, and content distribution. Additionally, CERES INC. may establish partnerships with other technology and media companies to enhance its service offerings and reach a broader audience, thereby contributing to its earnings.

CERES INC. Financial Statement Overview

Summary

CERES INC. demonstrates strong financial performance with consistent revenue growth and improving profitability. However, cash flow management needs improvement with a decline in operating cash flow to net income ratio.

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
EBITDA	2.88B	1.33B	1.12B	4.32B	1.76B
Net Income	1.48B	451.15M	115.17M	2.78B	744.60M
Balance Sheet
Total Assets	32.98B	25.92B	22.60B	20.23B	16.23B
Cash, Cash Equivalents and Short-Term Investments	14.13B	11.09B	9.29B	9.14B	7.89B
Total Debt	9.52B	7.36B	5.89B	4.22B	3.82B
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: 2680.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 2680 is above the 20-day moving average (MA) of 2428.10, above the 50-day MA of 2222.62, and above the 200-day MA of 2317.35, indicating a bullish trend. The MACD of 75.88 indicates Negative momentum. The RSI at 62.21 is Neutral, neither overbought nor oversold. The STOCH value of 70.77 is Neutral, 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
3696	76 Outperform	¥30.96B	52.17		2.24%	13.50%	-45.84%
4685	73 Outperform	¥43.28B	12.79		3.09%	15.38%	39.86%
9564	73 Outperform	¥16.59B	25.86		1.59%	26.93%	35.46%
4439	71 Outperform	¥29.83B	13.51		0.70%	29.19%	36.99%
2462	65 Neutral	¥26.69B	11.64		4.17%	1.03%	-14.22%
Sector *	62 Neutral	C$6.63B	7.55	3.42%	2.77%	6.63%	-23.02%
9248	45 Neutral	¥14.81B	―		3.65%	5.14%	-133.65%

CERES INC. Corporate Events

CERES INC. Forms Strategic Alliance with CyberBuzz to Boost Digital Marketing

CERES INC. has announced a strategic capital and business alliance with CyberBuzz, Inc., acquiring 19.14% of its shares. This move aims to enhance CERES INC.’s competitiveness in the expanding influencer marketing market in Japan by integrating their digital marketing assets and expertise, particularly in TikTok commerce and affiliate marketing, to create new revenue opportunities.

CERES INC. Expands into TikTok Shop with New Support Services

CERES INC.’s subsidiary, studio15 Inc., has launched support services for TikTok Shop in Japan, following the platform’s official launch. Studio15 has obtained three partner certifications, enhancing its ability to manage creators and promote sales through TikTok. This move aligns with CERES INC.’s strategy to leverage video commerce as a growth opportunity, integrating its media, affiliate, and D2C operations to strengthen its market position. While the immediate financial impact is minimal, the expansion into TikTok Shop is expected to boost profitability and corporate value in the medium to long term.

CERES INC. Acquires M Corporation to Boost D2C Business

CERES INC. has announced the acquisition of M Corporation, a company specializing in cosmetic products, to strengthen its D2C business. This strategic move aims to enhance CERES INC.’s vertically integrated model by incorporating M Corporation’s differentiated beauty brand, ‘Stem beauté,’ which uses advanced stem cell technology. The acquisition is expected to bolster the company’s revenue base and foster sustainable growth through collaboration in product development and distribution, although it is not anticipated to significantly impact financial results for the fiscal year ending December 31, 2025.

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.