Internet Initiative Japan (3774) AI Stock Analysis

• Market Cap: $489.14B
• Dividend Yield: 1.27%
• Average Volume (3M): 505.33K
• Price to Earnings (P/E): 23.6
• Beta (1Y): 0.44
• 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: 1.12
• Enterprise Value/Revenue: 1.70
• Enterprise Value/Gross Profit: 7.70
• Enterprise Value/Ebitda: 8.60
• 1Y Price Target: $3,072.61
• Price Target Upside: 6.95% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: ¥3,080.00 ▲(7.21% Upside)

Internet Initiative Japan's strong financial performance is the primary driver of its score, supported by efficient operations and robust cash flow generation. Technical analysis shows a mild upward trend, though caution is advised due to potential overvaluation and nearing overbought conditions. The lack of earnings call data and corporate events limits additional insights.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and stability.

Balance Sheet Health

A low debt-to-equity ratio reflects prudent financial management, providing financial stability and flexibility for future investments.

Cash Flow Generation

Strong cash flow generation enhances the company's ability to fund operations, invest in growth opportunities, and return capital to shareholders.

Negative Factors

Gross Profit Margin Decline

A decline in gross profit margin may indicate rising costs or pricing pressures, potentially impacting profitability if not addressed.

Free Cash Flow Retention

Lower free cash flow retention suggests potential inefficiencies in cash management, which could limit reinvestment and shareholder returns.

Debt Increase

An increase in debt levels, even if slight, requires monitoring as it could affect financial flexibility and increase interest obligations over time.

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	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	55.84B	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: Positive
• Last Price: 2873.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 2873 is above the 20-day moving average (MA) of 2814.30, above the 50-day MA of 2728.17, and above the 200-day MA of 2705.96, indicating a bullish trend. The MACD of 44.10 indicates Negative momentum. The RSI at 57.20 is Neutral, neither overbought nor oversold. The STOCH value of 80.50 is Negative, 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	¥19.57B	11.93	―	3.49%	5.03%	-9.55%
3774	76 Outperform	$489.14B	23.55	15.67%	1.27%	12.48%	18.38%
9433	76 Outperform	$9.28T	14.46	13.75%	3.17%	3.34%	20.36%
3776	66 Neutral	¥11.06B	26.24	―	1.12%	17.19%	-43.91%
9449	66 Neutral	¥413.00B	24.31	17.97%	1.50%	4.75%	17.02%
9424	63 Neutral	¥24.02B	22.84	―	―	30.15%	31.28%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%