Internet Initiative Japan (3774) AI Stock Analysis

• Market Cap: ¥515.18B
• Dividend Yield: 1.29%
• Average Volume (3M): 505.33K
• Price to Earnings (P/E): 22.5
• Beta (1Y): 0.40
• Revenue Growth: 12.48%
• EPS Growth: 18.38%
• Country: JP
• Employees: 5,206
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 35.29
• Shares Outstanding: 183,448,850
• 10 Day Avg. Volume: 473,140
• 30 Day Avg. Volume: 505,333
• PEG Ratio: 29.64
• Price to Book (P/B): 3.27
• Price to Sales (P/S): 1.45
• P/FCF Ratio: 27.66
• 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: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: ¥3,159.00 ▲(10.88% Upside)

Internet Initiative Japan's strong financial performance is the most significant factor, supported by consistent revenue growth and a solid balance sheet. Technical analysis indicates a stable upward trend, while valuation metrics suggest the stock is fairly valued. The lack of earnings call data and corporate events does not impact the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a robust demand for IIJ's services, reflecting its strong market position and ability to capture market share in the telecommunications sector.

Balance Sheet Health

A low debt-to-equity ratio suggests prudent financial management, providing IIJ with flexibility to invest in growth opportunities and withstand economic fluctuations.

Profitability

Stable profitability margins indicate effective cost management and operational efficiency, supporting long-term financial sustainability and shareholder value.

Negative Factors

Free Cash Flow Decline

A decline in free cash flow growth could limit IIJ's ability to fund new projects and return capital to shareholders, potentially impacting future growth prospects if not addressed.

Cash Flow Generation

Moderate cash flow generation relative to net income may constrain IIJ's ability to reinvest in the business, affecting long-term growth and competitive positioning.

Equity Ratio

While a strong capital structure, reliance on equity financing could dilute shareholder value if not managed carefully, impacting long-term returns.

Internet Initiative Japan Business Overview & Revenue Model

Company Description

Internet Initiative Japan Inc. (IIJ) is a leading Japanese internet service provider that offers a variety of services including network connectivity, cloud services, and IT solutions. Founded in 1992, IIJ serves both corporate and individual clients, providing advanced technology solutions such as data centers, security services, and IoT solutions. The company operates primarily in the telecommunications and information technology sectors, focusing on high-quality internet services and innovative technology solutions.

How the Company Makes Money

IIJ generates revenue primarily through its diverse range of services, which includes internet access services, cloud services, and system integration. Key revenue streams consist of the sale of broadband internet services to businesses and consumers, as well as the provision of managed services and cloud computing solutions. IIJ also earns revenue from its data center operations and security services. Significant partnerships with major technology firms and enterprises enhance its service offerings and contribute to its earnings, along with ongoing demand for reliable internet and IT solutions in Japan's growing digital economy.

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	331.72B	316.83B	276.08B	252.71B	226.34B	213.00B
Gross Profit	72.86B	68.40B	63.87B	57.91B	51.63B	40.28B
EBITDA	67.03B	62.06B	58.88B	55.84B	55.50B	43.00B
Net Income	22.49B	19.93B	19.83B	18.85B	15.67B	9.71B
Balance Sheet
Total Assets	329.26B	312.44B	273.71B	246.19B	231.81B	220.78B
Cash, Cash Equivalents and Short-Term Investments	41.11B	32.53B	45.47B	42.47B	47.39B	42.47B
Total Debt	35.59B	33.62B	30.18B	20.43B	21.87B	25.56B
Total Liabilities	179.54B	170.35B	146.68B	126.89B	127.18B	129.81B
Stockholders Equity	148.38B	140.68B	125.75B	118.12B	103.53B	89.96B
Cash Flow
Free Cash Flow	21.18B	16.62B	21.84B	21.27B	32.05B	29.54B
Operating Cash Flow	41.38B	28.53B	40.78B	38.53B	43.57B	40.54B
Investing Cash Flow	-20.81B	-21.75B	-17.93B	-18.39B	-11.84B	-13.22B
Financing Cash Flow	-17.24B	-19.67B	-20.80B	-25.73B	-27.30B	-23.62B

Internet Initiative Japan Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2849.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3774, the sentiment is Positive. The current price of 2849 is above the 20-day moving average (MA) of 2847.35, above the 50-day MA of 2782.71, and above the 200-day MA of 2718.04, indicating a bullish trend. The MACD of 8.08 indicates Positive momentum. The RSI at 54.22 is Neutral, neither overbought nor oversold. The STOCH value of 73.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	¥19.10B	12.07	―	3.59%	5.03%	-9.55%
9433	76 Outperform	¥10.25T	15.00	13.75%	2.86%	3.34%	20.36%
9424	74 Outperform	¥23.69B	22.52	―	―	30.15%	31.28%
3774	71 Outperform	¥515.18B	22.49	15.67%	1.29%	12.48%	18.38%
3776	66 Neutral	¥12.35B	29.30	―	1.00%	17.19%	-43.91%
9449	66 Neutral	¥409.15B	24.08	17.97%	1.37%	4.75%	17.02%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%