Internet Initiative Japan (3774) AI Stock Analysis

• Market Cap: $480.04B
• Dividend Yield: 1.31%
• Average Volume (3M): 582.43K
• Price to Earnings (P/E): 23.1
• Beta (1Y): 0.38
• Revenue Growth: 12.19%
• EPS Growth: 4.12%
• Country: JP
• Employees: 5,206
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 21.35
• Shares Outstanding: 183,448,850
• 10 Day Avg. Volume: 470,980
• 30 Day Avg. Volume: 582,433
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 1.70
• Enterprise Value/Gross Profit: 7.70
• Enterprise Value/Ebitda: 8.60
• 1Y Price Target: $3,568.34
• Price Target Upside: 33.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 66 Neutral
• Price Target: ¥2,974.00 ▲(11.66% Upside)

The overall stock score of 66 reflects strong financial performance, which is the most significant factor, indicating the company's solid position in the telecommunications sector. However, the technical analysis suggests a bearish trend, and the valuation indicates the stock is fairly valued but not particularly attractive. The absence of earnings call and corporate events data limits further insights.

Internet Initiative Japan Business Overview & Revenue Model

Company Description

Internet Initiative Japan Inc. provides Internet connectivity, WAN, outsourcing, systems integration, and network-related equipment sales services in Japan. It operates through two segments, Network Services and Systems Integration Business, and ATM Operation Business. The company offers mobile communication and remote access/telework services; WAN/network services, including SDN, multi-cloud network, closed connection, internet VPN, SEIL, remote access, wireless LAN, and GIGA-school; leased line and broadband services; IIJ DNS platform, and domain name registration and maintenance services; IIJ access ID management, dial-up access, and IIJ IPv6 fiber access services; and security solutions for IIJ managed firewall, DDoS protection, and managed IPS/IDS services. It also provides cloud solutions, such as HaaS/IaaS, cloud storage, monitoring/operation, virtual desktop, Paas/Saas, IoT/M2M, ID management and authentication, network, global, mobile, license, and specialized solutions, as well as IIJ cloud exchange and IIJ cloud integration solutions; network, mail, and web security, endpoint, security assessment/consulting, web and mail hosting, online storage, content delivery/CDN/CMS, and system integration; IoT services and solutions in the field of industrial, agriculture, energy, and IoT-oriented mobile communication; industry-specific solution; content delivery; and global/privacy products. In addition, the company offers IT outsourcing, IIJ consulting, cognitive factory, IIJ private cloud, network solutions, IIJ security audit, IIJ malware analysis, IIJ content management, cloud integration solution for Microsoft and AWS, Microsoft 365 transition support solution, data center service, and data center construction engineering solutions, as well as DX edge services. The company was incorporated in 1992 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Internet Initiative Japan generates revenue through several key streams. Primarily, it earns money from providing internet connectivity services, which include broadband and leased line services tailored for businesses and individual users. Additionally, IIJ offers cloud computing services, including data center services, virtual infrastructure, and managed services, which contribute significantly to its revenue. The company also engages in systems integration services, offering tailored IT solutions and consulting to a variety of industries. Partnerships with technology providers and continuous innovation in secure and efficient internet infrastructures further bolster IIJ's revenue streams.

Internet Initiative Japan Financial Statement Overview

Summary

Internet Initiative Japan demonstrates solid financial health with strong revenue growth, efficient operations, and prudent financial management. The company maintains a stable balance sheet with low leverage and strong equity returns. Cash flow generation is robust, though there is potential for enhancing free cash flow retention.

Income Statement

The company shows strong revenue growth with a TTM increase of 1.52% and consistent profitability, evidenced by a solid gross profit margin of 21.59% and a net profit margin of 6.29%. The EBIT and EBITDA margins are healthy at 9.70% and 19.41% respectively, indicating efficient operations. However, the slight decline in gross profit margin from previous years suggests potential cost pressures.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.24, indicating prudent financial leverage. The return on equity is strong at 14.90%, reflecting effective use of shareholder funds. The equity ratio of 45.89% suggests a stable capital structure, though the slight increase in total debt warrants monitoring.

Cash Flow

The cash flow statement is strong, with a significant free cash flow growth rate of 134.49% TTM, indicating improved cash generation. The operating cash flow to net income ratio of 2.09 suggests efficient cash conversion. However, the free cash flow to net income ratio of 0.36, while positive, indicates room for improvement in cash retention.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	321.64B	316.83B	276.08B	252.71B	226.34B	213.00B
Gross Profit	70.96B	68.40B	63.87B	57.91B	51.63B	40.28B
EBITDA	63.51B	62.06B	58.88B	56.66B	55.50B	43.00B
Net Income	20.39B	19.93B	19.83B	18.85B	15.67B	9.71B
Balance Sheet
Total Assets	313.00B	312.44B	273.71B	246.19B	231.81B	220.78B
Cash, Cash Equivalents and Short-Term Investments	32.84B	32.53B	45.47B	42.47B	47.39B	42.47B
Total Debt	33.60B	33.62B	30.18B	20.43B	21.87B	25.56B
Total Liabilities	167.96B	170.35B	146.68B	126.89B	127.18B	129.81B
Stockholders Equity	143.66B	140.68B	125.75B	118.12B	103.53B	89.96B
Cash Flow
Free Cash Flow	24.29B	16.62B	21.84B	21.27B	32.05B	29.54B
Operating Cash Flow	42.65B	28.53B	40.78B	38.53B	43.57B	40.54B
Investing Cash Flow	-21.32B	-21.75B	-17.93B	-18.39B	-11.84B	-13.22B
Financing Cash Flow	-20.53B	-19.67B	-20.80B	-25.73B	-27.30B	-23.62B

Internet Initiative Japan Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2663.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3774, the sentiment is Negative. The current price of 2663.5 is below the 20-day moving average (MA) of 2747.13, below the 50-day MA of 2775.51, and below the 200-day MA of 2742.54, indicating a bearish trend. The MACD of -40.60 indicates Positive momentum. The RSI at 34.40 is Neutral, neither overbought nor oversold. The STOCH value of -0.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3774.

Internet Initiative Japan Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3834	79 Outperform	¥20.30B	12.37	―	3.37%	6.35%	3.10%
9424	70 Outperform	¥25.52B	28.05	22.69%	―	27.43%	-5.71%
9433	70 Outperform	¥9.24T	14.39	13.19%	3.17%	2.66%	11.83%
3776	69 Neutral	¥10.20B	42.20	4.67%	1.20%	1.95%	-59.39%
9449	67 Neutral	¥385.05B	23.38	15.48%	1.60%	6.94%	7.68%
3774	66 Neutral	$480.04B	23.11	15.20%	1.31%	12.19%	4.12%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%