System Research Co., Ltd. (3771) AI Stock Analysis

• Market Cap: ¥30.84B
• Dividend Yield: 3.25%
• Average Volume (3M): 23.18K
• Price to Earnings (P/E): 13.9
• Beta (1Y): 0.95
• Revenue Growth: 11.20%
• EPS Growth: 12.35%
• Country: JP
• Employees: 1,442
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 38.64
• Shares Outstanding: 16,720,000
• 10 Day Avg. Volume: 18,540
• 30 Day Avg. Volume: 23,176
• PEG Ratio: 1.49
• Price to Book (P/B): 1.92
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.63
• 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

• Rating: 80 Outperform
• Price Target: ¥2,075.00 ▲(12.47%Upside)

System Research Co., Ltd. exhibits strong financial performance, particularly in revenue growth and balance sheet stability, which are the most significant factors driving its stock score. Technical analysis supports a bullish trend, adding to the positive outlook. Valuation metrics indicate the stock is fairly valued with a decent dividend yield, enhancing its appeal.

System Research Co., Ltd. Business Overview & Revenue Model

Company Description

System Research Co., Ltd. (3771) is a technology company primarily engaged in the development and provision of software solutions and IT services. The company operates in various sectors, including finance, telecommunications, and public sectors, offering a range of products such as system integration, IT infrastructure management, and consulting services. It is committed to delivering innovative and efficient technology solutions to enhance business operations and drive digital transformation for its clients.

How the Company Makes Money

System Research Co., Ltd. generates revenue through multiple streams centered around its software solutions and IT services. The primary revenue model involves fees from system integration projects where the company designs and implements customized IT systems for clients. Additionally, the company earns income from IT infrastructure management services, providing ongoing support and maintenance for clients' IT environments. Consulting services also contribute to revenue, as System Research Co., Ltd. offers expertise to help organizations improve their technology strategies and processes. The company may form strategic partnerships with technology vendors and other service providers to enhance its offerings and expand its market reach, thereby contributing to its overall earnings.

System Research Co., Ltd. Financial Statement Overview

Summary

System Research Co., Ltd. is financially sound with strong revenue growth and profitability metrics. The balance sheet reflects conservative leverage and strong equity backing, enhancing financial stability. Although cash flow generation shows room for improvement, the overall financial health is robust, positioning it well for future growth.

Income Statement

System Research Co., Ltd. has demonstrated strong revenue growth, with a notable increase from ¥23,320 million to ¥25,931 million, a growth rate of approximately 11.2%. Gross profit margin stands at 23.2%, indicating efficient cost management. Net profit margin improved to 8.5%, reflecting enhanced profitability. Both EBIT margin and EBITDA margin are solid, at 11.6% and 12.7% respectively, showcasing robust operational efficiency.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.11, indicating conservative leverage. Return on Equity (ROE) is healthy at 18.6%, suggesting efficient use of equity to generate profits. The equity ratio is strong at 67.4%, highlighting a stable financial position with substantial equity backing its assets.

Cash Flow

System Research Co., Ltd. experienced a decline in free cash flow by approximately 35.3%, which may indicate increased capital expenditures or other cash outflows. However, the operating cash flow to net income ratio is robust at 0.94, reflecting efficient cash conversion from earnings. The free cash flow to net income ratio is moderate at 0.44, suggesting room for improvement in cash flow generation relative to net income.

Breakdown
TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
25.29B	25.93B	23.32B	21.56B	18.41B	16.16B
	Gross Profit
5.76B	6.03B	5.36B	4.82B	4.12B	3.47B
	EBIT
2.80B	3.00B	2.70B	2.50B	2.08B	1.57B
	EBITDA
2.89B	3.29B	2.86B	2.32B	2.24B	1.72B
	Net Income Common Stockholders
2.05B	2.19B	1.97B	1.60B	1.49B	1.09B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.18B	8.20B	8.33B	7.37B	6.35B	5.84B
	Total Assets
16.46B	17.53B	16.15B	14.18B	12.88B	11.20B
	Total Debt
1.70B	1.30B	1.44B	1.40B	1.40B	1.43B
	Net Debt
-6.48B	-6.91B	-6.88B	-5.97B	-4.95B	-4.42B
	Total Liabilities
5.28B	5.70B	5.63B	5.05B	4.75B	4.05B
	Stockholders Equity
11.17B	11.81B	10.51B	9.12B	8.12B	7.14B
Cash Flow		Free Cash Flow
0.00	971.47M	1.50B	1.51B	1.23B	942.47M
	Operating Cash Flow
0.00	2.06B	2.46B	1.80B	1.29B	1.09B
	Investing Cash Flow
0.00	-1.14B	-926.71M	-273.30M	-254.65M	-144.11M
	Financing Cash Flow
0.00	-1.04B	-546.50M	-501.65M	-526.75M	-466.15M

System Research Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1845.00
• 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:3771, the sentiment is Positive. The current price of 1845 is above the 20-day moving average (MA) of 1814.15, above the 50-day MA of 1724.88, and above the 200-day MA of 1511.69, indicating a bullish trend. The MACD of 28.25 indicates Negative momentum. The RSI at 62.47 is Neutral, neither overbought nor oversold. The STOCH value of 71.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3771.

System Research Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3763	82 Outperform	¥32.30B	16.73		2.11%	3.22%	13.30%
3771	80 Outperform	¥30.84B	13.95		3.25%	11.20%	12.35%
3921	79 Outperform	¥22.80B	16.22		2.51%	9.79%	55.96%
3712	72 Outperform	¥16.88B	14.03		2.18%	2.71%	9.95%
5254	65 Neutral	¥33.74B	46.17		―	40.09%	31.05%
Sector *	62 Neutral	$11.93B	10.60	-7.51%	3.00%	7.40%	-8.09%
4259	61 Neutral	¥41.80B	―		―	17.02%	-315.36%

System Research Co., Ltd. Corporate Events

System Research Co., Ltd. Announces Dividend Distribution for Fiscal Year 2025

System Research Co., Ltd. announced a resolution to distribute dividends of surplus, with a dividend of 60 yen per share for the fiscal year ending March 31, 2025. This decision reflects the company’s commitment to returning profits to shareholders while maintaining a stable financial structure and aiming for a long-term payout ratio of 40%.

System Research Co., Ltd. Announces Leadership Changes

System Research Co., Ltd. announced a change in its leadership, with Toshiyuki Yamada retiring from his role as Representative Director and Chairman, effective after the upcoming shareholders’ meeting in June 2025. The company has proposed new director candidates, including Yoshinobu Ohta and Satoshi Nakagawa, to strengthen its board and continue its strategic direction.

System Research Co., Ltd. Introduces Restricted Stock Plan to Align Director and Shareholder Interests

System Research Co., Ltd. announced the introduction of a restricted stock remuneration plan for its directors, aiming to align their interests with shareholders and enhance corporate value. The plan, pending shareholder approval, will allocate up to 25,000 shares annually and is designed to incentivize directors to contribute to the company’s long-term success.

System Research Co., Ltd. Reports Strong Financial Performance for FY2025

System Research Co., Ltd. reported an 11.1% increase in net sales for the fiscal year ending March 31, 2025, reaching 25,931 million yen. The company’s operating profit also rose by 10.8% to 2,997 million yen, reflecting strong financial performance. Despite a decrease in cash and cash equivalents, the company maintained a solid equity ratio of 67.3%. The dividend per share was adjusted to 60 yen following a two-for-one share split. The company forecasts continued growth in the next fiscal year, with a projected 13% increase in net sales.