Gexeed Co., Ltd. (3719) AI Stock Analysis

• Market Cap: ¥8.11B
• Dividend Yield: N/A
• Average Volume (3M): 1.52M
• Price to Earnings (P/E): 24.7
• Beta (1Y): 0.35
• Revenue Growth: 156.37%
• EPS Growth: 495.81%
• Country: JP
• Employees: 35
• Sector: Industrials
• Sector Strength: 72
• Industry: Consulting Services
• EPS (TTM): 3.50
• Shares Outstanding: 27,871,231
• 10 Day Avg. Volume: 3,127,480
• 30 Day Avg. Volume: 1,523,460
• PEG Ratio: -0.11
• Price to Book (P/B): 4.33
• Price to Sales (P/S): 3.60
• P/FCF Ratio: -4.27
• 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
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: ―

Gexeed Co., Ltd.'s stock score reflects a mixed outlook. Strong revenue growth and profitability improvements are key strengths. However, significant cash flow issues and a high P/E ratio present risks. Technical indicators suggest potential positive momentum, but valuation concerns might limit upside potential unless growth prospects improve significantly.

Positive Factors

Revenue Growth

Substantial revenue growth indicates strong market demand and effective business strategies, enhancing long-term market position.

Profitability Improvement

Improved profitability margins suggest better cost management and operational efficiency, supporting sustainable earnings growth.

Balance Sheet Health

A strong equity base and moderate leverage provide financial stability, allowing for potential growth investments and risk management.

Negative Factors

Cash Flow Issues

Negative cash flow indicates potential liquidity challenges, which could hinder the company's ability to fund operations and growth internally.

Reduced Cash Reserves

Decreased cash reserves may limit financial flexibility and increase reliance on external financing, impacting long-term financial health.

Earnings Volatility

Earnings volatility can create uncertainty in financial planning and investor confidence, potentially affecting long-term growth prospects.

Gexeed Co., Ltd. Business Overview & Revenue Model

Company Description

Gexeed Co., Ltd. (3719) is a Japanese company that specializes in providing comprehensive IT services and solutions. The company operates in sectors such as information technology, consulting, and outsourcing. Its core services include system integration, IT infrastructure management, software development, and business process outsourcing, catering primarily to corporate clients seeking to enhance their operational efficiencies through technological advancements.

How the Company Makes Money

Gexeed Co., Ltd. generates revenue primarily through its IT services and solutions offerings. The company earns money by providing system integration services, where it designs and implements IT systems tailored to meet the specific needs of its clients. Additionally, Gexeed offers IT infrastructure management services, which involve the maintenance and support of clients' IT systems, ensuring optimal performance and reliability. Software development is another key revenue stream, with the company developing customized software applications to address unique business challenges faced by its customers. Business process outsourcing services also contribute to Gexeed's earnings, as the company manages various business functions for its clients, allowing them to focus on their core activities. Significant partnerships with technology providers and corporate clients further bolster Gexeed's revenue, as these collaborations enhance its service offerings and expand its market reach.

Gexeed Co., Ltd. Financial Statement Overview

Summary

Gexeed Co., Ltd. shows strong revenue growth and improved profitability margins. However, significant cash flow issues and reduced cash reserves pose liquidity risks, which are crucial to address for sustainable growth. The balance sheet remains stable with low leverage, but liquidity concerns could impact future operations.

Income Statement

Gexeed Co., Ltd. has demonstrated substantial revenue growth, increasing from 671 million to 1.42 billion. However, profitability metrics show mixed results. The gross profit margin improved to 27.4% from 23.1% in the previous year, indicating better cost management. The net profit margin turned positive at 10.4% after previous losses, highlighting a recovery in profitability. EBIT and EBITDA margins improved significantly, reflecting operational efficiency gains. Nonetheless, past volatility in earnings remains a concern.

Balance Sheet

The balance sheet shows a strong equity base with an equity ratio of 50.5%. The debt-to-equity ratio is manageable at 0.35, indicating moderate leverage. However, cash reserves have decreased significantly, which may constrain liquidity. Return on equity is commendable at 12.5%, showing effective use of shareholder capital. While stable overall, the reduction in cash and potential liquidity constraints are areas to watch.

Cash Flow

Gexeed Co., Ltd. faces challenges with its cash flow, as evidenced by negative operating cash flow of -867 million and free cash flow of -1.2 billion. This could signal potential liquidity concerns and an inability to self-fund operations. The operating cash flow to net income ratio is negative, indicating cash generation issues. Despite past fluctuations, the company must address cash flow sustainability to improve financial health.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.42B	671.20M	642.51M	480.07M	476.94M
Gross Profit	389.27M	155.10M	150.51M	99.19M	55.80M
EBITDA	201.85M	-66.78M	25.56M	-113.04M	-74.92M
Net Income	147.53M	-70.56M	14.71M	-129.42M	-85.52M
Balance Sheet
Total Assets	2.34B	1.20B	985.88M	1.01B	1.09B
Cash, Cash Equivalents and Short-Term Investments	255.68M	730.58M	748.48M	750.43M	797.68M
Total Debt	408.37M	0.00	22.19M	84.70M	178.42M
Total Liabilities	1.16B	94.88M	129.68M	160.56M	251.53M
Stockholders Equity	1.18B	1.10B	856.20M	850.58M	840.17M
Cash Flow
Free Cash Flow	-1.20B	-362.51M	44.68M	-81.00M	-101.01M
Operating Cash Flow	-867.76M	-115.55M	44.94M	-73.65M	-67.19M
Investing Cash Flow	114.23M	-188.18M	15.62M	-40.85M	9.69M
Financing Cash Flow	328.33M	285.83M	-62.51M	62.28M	377.34M

Gexeed Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 365.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3719, the sentiment is Negative. The current price of 365 is below the 20-day moving average (MA) of 393.90, below the 50-day MA of 398.20, and above the 200-day MA of 279.02, indicating a neutral trend. The MACD of -20.47 indicates Positive momentum. The RSI at 33.12 is Neutral, neither overbought nor oversold. The STOCH value of 7.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3719.

Gexeed Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7039	76 Outperform	¥7.44B	10.63	―	3.03%	8.00%	3.22%
6560	73 Outperform	¥10.59B	13.94	―	1.30%	5.97%	-5.60%
7379	71 Outperform	―	―	―	―	14.88%	48.97%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
4490	61 Neutral	¥4.19B	7.58	―	―	0.36%	―
3719	59 Neutral	¥8.11B	24.67	―	―	156.37%	495.81%
9246	42 Neutral	¥7.15B	―	―	―	-1.71%	-303.36%