SHIFT, Inc. (JP:3697)
:3697
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SHIFT
(3697)
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Rating:72Outperform
Price Target:
¥878.00
▼(-10.59% Downside)
Action:Upgraded
Date:06/03/26
Score is primarily supported by strong financial performance (solid growth, low leverage, strong ROE, and exceptional free cash flow growth). Technicals are constructive in the short-to-medium term but still below the 200-day average, tempering the rating. Valuation appears mid-range on P/E with no dividend yield data to add support.
Positive Factors
Free Cash Flow Generation
Exceptional free cash flow growth (306%) indicates the business converts earnings into cash efficiently. Durable cash generation supports reinvestment in tooling, hiring, or M&A, provides a buffer through cycles, and underpins long-term financial flexibility and capital allocation.
Negative Factors
Net Margin Compression Risk
Despite strong gross margins, the company’s net profit margin lags, indicating that operating costs, SG&A or other expenses are eroding bottom-line conversion. Unless operational efficiency improves, earnings leverage from revenue growth may be muted over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Generation
Exceptional free cash flow growth (306%) indicates the business converts earnings into cash efficiently. Durable cash generation supports reinvestment in tooling, hiring, or M&A, provides a buffer through cycles, and underpins long-term financial flexibility and capital allocation.
Read all positive factors
SHIFT (3697) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥172.49B
Dividend YieldN/A
Average Volume (3M)6.44M
Price to Earnings (P/E)19.9
Beta (1Y)0.91
Revenue Growth16.80%
EPS Growth27.73%
CountryJP
Employees10,266
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)33.93
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
¥950.00Price Target Upside-3.26% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)40.35
Revenue Forecast (FY)¥157.34B
SHIFT Business Overview & Revenue Model
Company Description
Established in 2005, SHIFT Inc. is a Tokyo, Japan-based company specializing in software quality assurance and testing solutions for the Japanese market. Their offerings include comprehensive software consulting services and their proprietary soft...
How the Company Makes Money
SHIFT Inc. generates revenue by offering software testing and quality assurance services. Its primary revenue stream comes from contracts with businesses seeking to ensure the functionality and reliability of their software systems. SHIFT conducts...
SHIFT Financial Statement Overview
Summary
Income Statement
85
Very Positive
Balance Sheet
78
Positive
Cash Flow
82
Very Positive
| Breakdown | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 129.82B | 110.63B | 88.03B | 64.87B | 46.00B |
| Gross Profit | 45.02B | 35.36B | 29.94B | 20.21B | 13.15B |
| EBITDA | 17.03B | 11.97B | 11.89B | 8.93B | 5.81B |
| Net Income | 8.94B | 5.13B | 6.25B | 4.97B | 2.82B |
Balance Sheet | |||||
| Total Assets | 77.66B | 63.30B | 49.89B | 40.52B | 34.50B |
| Cash, Cash Equivalents and Short-Term Investments | 23.73B | 20.87B | 17.59B | 12.92B | 14.25B |
| Total Debt | 12.22B | 9.58B | 4.91B | 3.57B | 4.25B |
| Total Liabilities | 36.62B | 28.77B | 20.31B | 14.51B | 11.82B |
| Stockholders Equity | 41.04B | 34.04B | 29.13B | 25.65B | 22.40B |
Cash Flow | |||||
| Free Cash Flow | 14.33B | 3.44B | 9.10B | 6.74B | 4.39B |
| Operating Cash Flow | 15.65B | 9.09B | 10.25B | 7.39B | 4.76B |
| Investing Cash Flow | -11.70B | -9.95B | -4.78B | -5.61B | -5.43B |
| Financing Cash Flow | -1.19B | 4.15B | -817.00M | -3.08B | 8.29B |
SHIFT Technical Analysis
Negative
982.00
Price Trends
670.88
Negative
685.99
Negative
927.80
Negative
Market Momentum
2.64
Positive
45.13
Neutral
12.53
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3697, the sentiment is Negative. The current price of 982 is above the 20-day moving average (MA) of 682.32, above the 50-day MA of 670.88, and above the 200-day MA of 927.80, indicating a bearish trend. The MACD of 2.64 indicates Positive momentum. The RSI at 45.13 is Neutral, neither overbought nor oversold. The STOCH value of 12.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3697.
SHIFT Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | ¥113.35B | 28.87 | ― | 1.19% | 16.77% | 13.72% | |
75 Outperform | ¥182.45B | 14.71 | ― | 2.49% | 9.30% | 10.95% | |
74 Outperform | ¥43.87B | 11.70 | 8.02% | 2.73% | 5.82% | 16.78% | |
72 Outperform | ¥172.49B | 19.91 | 24.24% | ― | 16.80% | 27.73% | |
69 Neutral | ¥17.46B | 8.82 | ― | 2.40% | 15.12% | 40.67% | |
66 Neutral | ¥40.21B | 15.29 | ― | 1.50% | 10.69% | 6.99% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
JP:3697
SHIFT
645.30
-1,115.70
-63.36%
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SHIFT Corporate Events
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...
SHIFT Posts Strong Revenue Growth but Softer Profits, Introduces Adjusted Metrics and Keeps No-Dividend Stance
Apr 14, 2026
SHIFT, Inc. reported consolidated net sales of ¥72.0 billion for the six months ended February 28, 2026, up 16.8% year-on-year, while operating profit fell 14.3% to ¥6.9 billion and profit attributable to owners of parent declined 10.7% ...
SHIFT Finalizes Acquisition of Nisseicom as Consolidated Subsidiary
Apr 1, 2026
SHIFT Inc. has completed the previously announced acquisition of all issued shares of Nisseicom, Limited via its consolidated subsidiary SHIFT Growth Capital Inc., converting Nisseicom into a consolidated subsidiary. The final acquisition price af...
SHIFT to Acquire STEP via New SPC, Expanding Social Infrastructure Systems Reach
Mar 27, 2026
SHIFT Inc. said its MA arm SHIFT Growth Capital will set up SHIFT STEP Holdings Inc., a special purpose company that will acquire all shares of STEP Co., Ltd., making the Sendai-based systems developer a consolidated subsidiary and specified subsi...
SHIFT Secures ¥17.7 Billion Loan to Fund Nisseicom Acquisition
Mar 27, 2026
SHIFT Inc. has arranged a ¥17.7 billion unsecured loan from Mizuho Bank to finance the acquisition of Nisseicom, Limited, which is set to become a consolidated subsidiary via SHIFT Growth Capital Inc. The one-year borrowing, drawn down on Mar...
SHIFT Consolidates Cybersecurity Units into New Subsidiary Secure One
Mar 24, 2026
SHIFT Inc. is restructuring its cybersecurity operations by establishing Secure One Co., Ltd. as a wholly owned subsidiary and merging SHIFT SECURITY, KRAF and MAS Lab into the new entity to consolidate capabilities. The move aims to improve manag...
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.