SHIFT (3697) AI Stock Analysis

• Market Cap: €465.24B
• Dividend Yield: N/A
• Average Volume (3M): 3.39M
• Price to Earnings (P/E): 68.9
• Beta (1Y): 1.21
• Revenue Growth: 20.02%
• EPS Growth: -5.47%
• Country: JP
• Employees: 10,266
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 9.56
• Shares Outstanding: 267,500,670
• 10 Day Avg. Volume: 4,116,850
• 30 Day Avg. Volume: 3,387,963
• PEG Ratio: -0.76
• Price to Book (P/B): 10.62
• 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: €1,699.74
• Price Target Upside: -1.15% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 74 Outperform
• Price Target: ¥1,980.00 ▲(15.15%Upside)

SHIFT, Inc. is financially robust with strong revenue and profit margins, complemented by bullish technical indicators. The high P/E ratio suggests a premium valuation which might deter conservative investors. Monitoring overbought indicators is recommended.

SHIFT Business Overview & Revenue Model

Company Description

SHIFT, Inc. (3697) is a technology company specializing in software testing and quality assurance services. The company operates primarily in the IT services sector, offering a range of solutions that ensure the reliability and performance of software applications. SHIFT, Inc.'s core services include functional testing, performance testing, security testing, and automation services, catering to clients across various industries seeking to optimize their software development processes.

How the Company Makes Money

SHIFT, Inc. generates revenue primarily through its comprehensive suite of software testing services. The company earns money by providing testing solutions on a contractual basis, charging clients for the time and resources dedicated to ensuring the quality and functionality of their software products. Revenue streams include fees for individual testing projects, long-term service agreements, and subscription models for ongoing quality assurance support. The company may also engage in partnerships and collaborations with software development firms, enhancing its market presence and expanding its client base through strategic alliances.

SHIFT Financial Statement Overview

Summary

SHIFT, Inc. is performing well with strong revenue growth, solid profitability margins, and prudent balance sheet management. Attention to debt levels and cash conversion efficiency is advisable to maintain its strong financial position.

Income Statement

SHIFT, Inc. demonstrated strong revenue growth over the years, with a notable increase from 2019 to 2024. The gross profit margin is healthy, and the net profit margin has been stable, reflecting efficient cost management. However, there was a slight decline in EBIT, which warrants monitoring.

Balance Sheet

The company maintains a strong equity position with an increasing equity ratio, indicating financial stability. A low debt-to-equity ratio suggests prudent leverage management. However, the increase in total debt over recent years should be observed closely to ensure it doesn't impact financial flexibility.

Cash Flow

SHIFT, Inc. has consistently generated positive operating cash flow, supporting its operations and growth initiatives. The free cash flow has shown growth, although the free cash flow to net income ratio suggests room for improvement in converting profits to cash.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
115.73B	110.63B	88.03B	64.87B	46.00B	28.71B
	Gross Profit
37.58B	35.36B	29.94B	21.10B	13.91B	8.95B
	EBIT
12.24B	10.54B	11.56B	6.91B	3.99B	2.35B
	EBITDA
12.56B	11.98B	13.29B	8.93B	5.81B	3.14B
	Net Income Common Stockholders
6.60B	5.13B	6.25B	4.97B	2.82B	1.65B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
24.40B	20.87B	17.59B	12.92B	14.25B	6.52B
	Total Assets
66.21B	62.72B	49.53B	40.23B	34.27B	19.82B
	Total Debt
12.83B	9.58B	4.90B	3.53B	4.22B	4.59B
	Net Debt
-11.58B	-11.29B	-12.69B	-9.39B	-10.03B	-1.94B
	Total Liabilities
30.61B	28.20B	19.96B	14.22B	11.59B	9.04B
	Stockholders Equity
35.08B	34.04B	29.12B	25.65B	22.40B	10.51B
Cash Flow		Free Cash Flow
0.00	3.44B	8.99B	6.62B	4.32B	1.77B
	Operating Cash Flow
0.00	9.09B	10.25B	7.39B	4.76B	2.25B
	Investing Cash Flow
0.00	-9.95B	-3.80B	-5.61B	-5.43B	-5.93B
	Financing Cash Flow
0.00	4.15B	-1.80B	-3.08B	8.29B	1.51B

SHIFT Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1719.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3697, the sentiment is Positive. The current price of 1719.5 is above the 20-day moving average (MA) of 1598.72, above the 50-day MA of 1378.89, and above the 200-day MA of 1172.80, indicating a bullish trend. The MACD of 108.08 indicates Negative momentum. The RSI at 71.10 is Negative, neither overbought nor oversold. The STOCH value of 70.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3697.

SHIFT Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9759	80 Outperform	¥250.20B	22.47		2.52%	6.45%	15.28%
3697	74 Outperform	€465.24B	68.93	19.04%	―	20.02%	-5.47%
4776	72 Outperform	¥144.52B	34.00		0.95%	16.68%	43.49%
4443	67 Neutral	¥259.20B	124.71		―	29.19%	―
Sector *	62 Neutral	$11.80B	10.31	-7.45%	2.91%	7.43%	-7.78%
3994	53 Neutral	€257.94B	―	-17.75%	―	28.35%	-2.49%
4478	47 Neutral	¥228.24B	―		―	29.79%	77.13%

SHIFT Corporate Events

SHIFT Inc. Addresses Fraudulent Subsidy Applications at Subsidiary

SHIFT Inc. has uncovered fraudulent subsidy applications by its subsidiary, Infinic Inc., through an internal audit assisted by external experts. The director of Infinic has been dismissed, and the company is collaborating with local authorities to address the issue while implementing a compliance check system. The financial impact on SHIFT’s FY2025 statements is expected to be minimal.

SHIFT, Inc. Reports Strong Financial Growth for First Half of 2025

SHIFT, Inc. reported a significant increase in its consolidated financial results for the six months ending February 28, 2025, with net sales rising by 17.9% and operating profit surging by 72.1% compared to the previous year. The company’s strong performance reflects its strategic positioning in the software testing industry, with a notable impact on its profitability and market standing.

SHIFT Inc. Acquires Stake in Rise Consulting Group to Boost Market Position

SHIFT Inc. has announced the acquisition of a 33% stake in Rise Consulting Group, Inc., converting it into an equity-method affiliate, and has entered into a Business and Capital Alliance Agreement with Rise. This strategic move is expected to enhance SHIFT’s capabilities in upstream processes, expand its market reach, and increase its brand value in the consulting domain. The collaboration aims to broaden project opportunities, improve customer engagement, and support the company’s growth objectives.

SHIFT Inc. Announces Strategic Reorganization to Boost Growth

SHIFT Inc. announced a reorganization involving the merger of its subsidiary Careersystems Inc. into ALH Inc., and the transfer of CIMTECH Inc. shares to Baristride Group. This strategic move aims to enhance business synergies, streamline operations, and accelerate growth within the SHIFT Group by leveraging the strengths of its subsidiaries in app development and infrastructure services.

SHIFT Inc. Consolidates ERP Operations with Subsidiary Merger

SHIFT Inc. announced the absorption-type merger of its subsidiary, SHIFT Enterprise Consulting Inc., to consolidate and strengthen its ERP business within the main company. This strategic move aims to leverage SHIFT’s recruiting, sales, and technological capabilities to maximize business resources and increase corporate value, aligning with their growth strategy ‘SHIFT2000’.