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SHIFT
(3697)
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Rating:78Outperform
Price Target:
¥955.00
▲(8.25% Upside)
Action:Reiterated
Date:07/29/26
The score is driven primarily by strong financial performance (healthy leverage, high ROE, and very strong free cash flow generation) and a clear positive price trend (trading well above key moving averages). These strengths are tempered by a relatively high valuation (P/E ~33) and the absence of dividend yield data.
Positive Factors
Very strong free cash flow generation
Sustained FCF expansion (306.37% growth) indicates durable cash conversion from operations. That level of cash generation supports reinvestment, M&A, debt reduction, and capital returns, and underpins long-term financial flexibility and strategic optionality.
Negative Factors
Negative EPS growth trend
A negative EPS growth rate (~-17.9%) signals earnings per share compression despite revenue gains. Over several quarters this can erode investor confidence and limit internal funding for strategic initiatives unless management arrests the decline and restores margin or share count discipline.
Read all positive and negative factors
Positive Factors
Negative Factors
Very strong free cash flow generation
Sustained FCF expansion (306.37% growth) indicates durable cash conversion from operations. That level of cash generation supports reinvestment, M&A, debt reduction, and capital returns, and underpins long-term financial flexibility and strategic optionality.
Read all positive factors
SHIFT (3697) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥234.58B
Dividend YieldN/A
Average Volume (3M)6.44M
Price to Earnings (P/E)34.7
Beta (1Y)0.89
Revenue Growth20.30%
EPS Growth-17.95%
CountryJP
Employees11,688
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)25.27
Shares Outstanding267,500,670
10 Day Avg. Volume7,177,050
30 Day Avg. Volume6,442,629
Financial Highlights & Ratios
PEG Ratio0.58
Price to Book (P/B)9.47
Price to Sales (P/S)2.99
P/FCF Ratio27.12
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥700.00Price Target Upside-20.65% Downside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)34.5
Revenue Forecast (FY)¥158.62B
SHIFT Business Overview & Revenue Model
Company Description
SHIFT Inc. provides software quality assurance and testing solutions in Japan. The company offers CAT, a software test management tool to evaluate software testing aptitude; a quality platform; and software consulting services. The company also en...
How the Company Makes Money
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SHIFT Financial Statement Overview
Summary
Income Statement
85
Very Positive
Balance Sheet
78
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 150.25B | 129.82B | 110.63B | 88.03B | 64.87B | 46.00B |
| Gross Profit | 50.33B | 45.02B | 35.36B | 29.94B | 20.21B | 13.15B |
| EBITDA | 17.90B | 17.03B | 11.97B | 11.89B | 8.93B | 5.81B |
| Net Income | 6.63B | 8.94B | 5.13B | 6.25B | 4.97B | 2.82B |
Balance Sheet | ||||||
| Total Assets | 105.28B | 77.66B | 63.30B | 49.89B | 40.52B | 34.50B |
| Cash, Cash Equivalents and Short-Term Investments | 33.75B | 23.73B | 20.87B | 17.59B | 12.92B | 14.25B |
| Total Debt | 34.68B | 12.22B | 9.58B | 4.91B | 3.57B | 4.25B |
| Total Liabilities | 66.64B | 36.62B | 28.77B | 20.31B | 14.51B | 11.82B |
| Stockholders Equity | 38.47B | 41.04B | 34.04B | 29.13B | 25.65B | 22.40B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 14.33B | 3.44B | 9.10B | 6.74B | 4.39B |
| Operating Cash Flow | 0.00 | 15.65B | 9.09B | 10.25B | 7.39B | 4.76B |
| Investing Cash Flow | 0.00 | -11.70B | -9.95B | -4.78B | -5.61B | -5.43B |
| Financing Cash Flow | 0.00 | -1.19B | 4.15B | -817.00M | -3.08B | 8.29B |
SHIFT Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | ¥234.58B | 34.73 | 24.24% | ― | 20.30% | -17.95% | |
78 Outperform | ¥46.63B | 17.73 | ― | 1.50% | 10.69% | 6.99% | |
75 Outperform | ¥205.36B | 16.18 | ― | 2.49% | 9.69% | 13.01% | |
74 Outperform | ¥46.33B | 12.35 | 8.47% | 2.73% | 5.82% | 16.78% | |
74 Outperform | ¥97.02B | 24.37 | ― | 1.26% | 16.77% | 13.72% | |
71 Outperform | ¥17.73B | 9.59 | ― | 2.40% | 12.33% | 13.11% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
JP:3697
SHIFT
849.50
-847.00
-49.93%
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2,700.00
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-21.32%
SHIFT Corporate Events
SHIFT Finalizes Details of Airitech Consulting Business Restructuring
Jul 15, 2026
SHIFT Inc. has finalized the previously pending details of an absorption-type company split and related mergers involving its subsidiary Airitech Inc., completing a reorganization of consulting businesses within the group. The company confirmed th...
SHIFT Raises Sales Outlook but Cuts Profit Forecast on Investment Losses
Jul 15, 2026
SHIFT Inc. has revised its full-year earnings forecast for the fiscal year ending August 31, 2026, raising projected net sales from 150 billion yen to 160 billion yen on the back of steady sales improvements, deployment of generative AI services a...
SHIFT Launches First Dividend as It Reshapes Capital Strategy Around AI Growth
Jul 15, 2026
SHIFT Inc. has overhauled its capital allocation strategy, introducing a formal shareholder return policy while continuing to prioritize growth investments, particularly in its AI business. With the ability to conduct MA using external capital and...
SHIFT Delivers Strong Revenue Growth but Softer Profits and Moves to Dividends
Jul 15, 2026
SHIFT, Inc. is a Tokyo Stock Exchange-listed provider of software quality assurance and IT consulting services, focused on corporate clients and institutional investors. The company increasingly uses adjusted financial metrics to highlight underly...
SHIFT Secures ¥17.7 Billion Unsecured Loan to Refinance Existing Debt
Jun 25, 2026
SHIFT Inc. has arranged a new unsecured loan facility totaling ¥17.7 billion from Mizuho Bank and four other lenders, with drawdowns scheduled between June 29 and June 30, 2026, and maturities extending to June 2033. The borrowing carries a f...
SHIFT and Rise deepen AI-era consulting alliance to spur growth
May 29, 2026
SHIFT, Inc. and its equity-method affiliate Rise Consulting Group, Inc., a Tokyo-based execution-focused management consultancy serving major Japanese corporations, have agreed to deepen their existing capital and business alliance. The enhanced p...
SHIFT to Book ¥4.5 Billion Extraordinary Loss on Rise Consulting Stake
May 29, 2026
SHIFT Inc. said it expects to book a ¥4.5 billion extraordinary loss on a non-consolidated basis after the fair value of its stake in equity-method affiliate Rise Consulting Group fell well below acquisition cost. The company noted that the e...
SHIFT to Merge Key Subsidiaries into ALH to Streamline Operations
May 26, 2026
SHIFT Inc. announced that its consolidated subsidiary ALH Inc. will conduct an absorption-type merger with fellow group companies SPST Inc. and TRUST BRAIN Co., Ltd., effective September 1, 2026. The move will not involve new share issuance or con...
SHIFT Cancels New Cybersecurity Subsidiary, Opts to Merge Existing Units Into Parent
May 26, 2026
SHIFT Inc. has decided to cancel the planned establishment of Secure One Co., Ltd., a new wholly owned cybersecurity subsidiary that was scheduled to be incorporated in June 2026. Instead, the group will reorganize by merging existing cybersecurit...
SHIFT Centralizes Back-Office Functions of 15 Group Firms to Drive AI Transformation
May 26, 2026
SHIFT Inc. will consolidate the back-office functions, including human resources and treasury, of 15 mainly system development-focused group companies into a centralized structure through an absorption-type company split. The move is part of its b...
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.