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Internet Initiative Japan Inc. (JP:3774)
:3774

Internet Initiative Japan (3774) AI Stock Analysis

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Internet Initiative Japan

(OTC:3774)

Rating:73Outperform
Price Target:
¥3,007.00
▲(5.99%Upside)
The overall stock score is driven primarily by strong financial performance, supported by solid revenue growth and profitability. Technical indicators show moderate strength, suggesting some positive price momentum. Valuation remains reasonable, though not exceptionally compelling, due to the average P/E ratio and modest dividend yield.

Internet Initiative Japan (3774) vs. iShares MSCI Japan ETF (EWJ)

Internet Initiative Japan Business Overview & Revenue Model

Company DescriptionInternet 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 MoneyInternet Initiative Japan generates revenue through various streams, primarily focusing on its network services segment. This includes providing high-speed internet connectivity, VPN services, and data center operations. Additionally, IIJ earns income from its cloud services, which offer scalable and secure computing resources to businesses. Systems integration, which involves designing and implementing IT infrastructure, also contributes significantly to IIJ's revenue. The company benefits from strategic partnerships and collaborations, enhancing its service offerings and expanding its market reach. Its revenue model is further supported by subscription-based services, creating a steady income stream.

Internet Initiative Japan Financial Statement Overview

Summary
Internet Initiative Japan is in a strong financial position with solid revenue growth and profitability, supported by a robust balance sheet and healthy cash flow. While the company maintains low leverage, the recent decline in free cash flow growth may warrant attention for future investments.
Income Statement
85
Very Positive
Internet Initiative Japan shows a strong financial performance with consistent revenue growth, demonstrating a 10.2% increase from the previous year in TTM. The gross profit margin stands at approximately 22%, and the net profit margin is around 6.8%, indicating good cost management and profitability. EBIT and EBITDA margins are solid at 9.7% and 19.7%, respectively, reflecting efficient operations.
Balance Sheet
78
Positive
The company's balance sheet is stable, with a debt-to-equity ratio of approximately 0.25, indicating low leverage. The equity ratio is about 44.4%, which signifies a strong equity base. However, stockholders' equity growth has been moderate, which could constrain future leverage opportunities.
Cash Flow
82
Very Positive
Internet Initiative Japan's cash flow is robust with a healthy operating cash flow to net income ratio of approximately 1.6, indicating strong cash generation relative to earnings. Free cash flow has decreased compared to the previous year, resulting in a negative growth rate of approximately -46.7%, but it remains positive at 11.6 billion yen, suggesting ongoing investment capacity.
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
304.29B276.08B252.71B226.34B213.00B204.47B
Gross Profit
66.84B63.87B57.91B51.63B40.28B32.59B
EBIT
29.50B29.11B27.22B23.55B14.25B8.23B
EBITDA
60.16B58.88B56.87B55.50B43.00B36.26B
Net Income Common Stockholders
20.64B19.83B18.85B15.67B9.71B4.01B
Balance SheetCash, Cash Equivalents and Short-Term Investments
37.98B45.47B44.39B48.69B44.44B41.34B
Total Assets
307.67B273.71B246.19B231.81B220.78B206.52B
Total Debt
33.63B30.18B20.43B21.87B25.56B27.75B
Net Debt
-1.18B-15.29B-22.04B-25.52B-16.91B-10.92B
Total Liabilities
169.75B146.68B126.89B127.18B129.81B126.47B
Stockholders Equity
136.55B125.75B118.12B103.53B89.96B79.08B
Cash FlowFree Cash Flow
11.64B21.84B21.27B32.05B29.54B21.55B
Operating Cash Flow
32.52B40.78B38.53B43.57B40.54B33.39B
Investing Cash Flow
-22.74B-17.93B-18.39B-11.84B-13.22B-7.26B
Financing Cash Flow
-17.19B-20.80B-25.73B-27.30B-23.62B-19.35B

Internet Initiative Japan Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2837.00
Price Trends
50DMA
2675.43
Positive
100DMA
2676.47
Positive
200DMA
2802.90
Positive
Market Momentum
MACD
54.10
Negative
RSI
59.53
Neutral
STOCH
69.65
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 2837 is above the 20-day moving average (MA) of 2744.10, above the 50-day MA of 2675.43, and above the 200-day MA of 2802.90, indicating a bullish trend. The MACD of 54.10 indicates Negative momentum. The RSI at 59.53 is Neutral, neither overbought nor oversold. The STOCH value of 69.65 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
$510.62B25.1814.78%1.18%14.76%0.69%
61
Neutral
$14.60B5.95-4.32%3.69%2.76%-30.49%
$2.58B29.1515.57%1.13%
$63.08B14.7313.04%2.94%
79
Outperform
¥18.65B10.27
3.67%6.35%54.17%
76
Outperform
¥27.21B31.99
24.84%-38.04%
68
Neutral
¥9.28B24.32
1.32%4.70%35.62%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:3774
Internet Initiative Japan
2,837.00
658.45
30.22%
GMOYF
GMO Internet
24.42
9.24
60.87%
KDDIF
KDDI
16.36
3.07
23.10%
JP:3776
Broadband Tower, Inc.
151.00
-62.82
-29.38%
JP:3834
ASAHI Net, Inc.
667.00
34.88
5.52%
JP:9424
Japan Communications Inc.
164.00
-20.00
-10.87%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.