Internet Initiative Japan (3774) AI Stock Analysis

• Market Cap: $496.76B
• Dividend Yield: 1.27%
• Average Volume (3M): 434.07K
• Price to Earnings (P/E): 24.5
• Beta (1Y): 0.38
• Revenue Growth: 14.76%
• EPS Growth: 0.69%
• Country: JP
• Employees: 5,206
• Sector: Communication Services
• Sector Strength: 84
• Industry: Telecommunications Services
• EPS (TTM): 34.75
• Shares Outstanding: 183,206,300
• 10 Day Avg. Volume: 437,120
• 30 Day Avg. Volume: 434,066
• PEG Ratio: -7.38
• Price to Book (P/B): 3.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 48.60
• 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: $3,620.96
• Price Target Upside: 29.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 70 Outperform
• Price Target: ¥3,036.00 ▲(8.68%Upside)

The overall stock score of 70 reflects Internet Initiative Japan's strong financial performance and stable technical indicators, albeit with some short-term weakness. The high P/E ratio suggests potential overvaluation, and the modest dividend yield provides limited income. The company's financial health is a significant strength, while valuation concerns temper the overall score.

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 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 exhibits strong financial performance with consistent revenue growth and robust profitability margins. The balance sheet shows prudent leverage and a stable financial structure, though liquidity requires attention due to cash reduction.

Income Statement

The company exhibits strong revenue growth with a consistent upward trend, growing from ¥204.47 billion in 2020 to ¥316.83 billion in 2025. The gross profit margin has remained steady, indicating effective cost management, while the net profit margin has improved, reflecting enhanced profitability. EBIT and EBITDA margins are robust, showcasing operational efficiency.

Balance Sheet

The debt-to-equity ratio is favorable, suggesting prudent financial leverage. The return on equity (ROE) is strong, indicating effective utilization of equity capital. The equity ratio shows a solid financial position with a significant proportion of assets funded by equity. However, the reduction in cash and cash equivalents over the years may pose liquidity considerations.

Cash Flow

Free cash flow growth is positive, albeit with some volatility. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to profit. However, the free cash flow to net income ratio has seen fluctuations, requiring monitoring for sustained cash flow performance.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	316.83B	276.08B	252.71B	226.34B	213.00B
Gross Profit	68.40B	63.87B	57.91B	51.63B	40.28B
EBITDA	62.06B	58.88B	56.66B	55.50B	43.00B
Net Income	19.93B	19.83B	18.85B	15.67B	9.71B
Balance Sheet
Total Assets	312.44B	273.71B	246.19B	231.81B	220.78B
Cash, Cash Equivalents and Short-Term Investments	32.53B	45.47B	44.39B	48.69B	44.44B
Total Debt	33.62B	30.18B	20.43B	21.87B	25.56B
Total Liabilities	170.35B	146.68B	126.89B	127.18B	129.81B
Stockholders Equity	140.68B	125.75B	118.12B	103.53B	89.96B
Cash Flow
Free Cash Flow	16.62B	21.84B	21.27B	32.05B	29.54B
Operating Cash Flow	28.53B	40.78B	38.53B	43.57B	40.54B
Investing Cash Flow	-21.75B	-17.93B	-18.39B	-11.84B	-13.22B
Financing Cash Flow	-19.67B	-20.80B	-25.73B	-27.30B	-23.62B

Internet Initiative Japan Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2793.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• 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 Neutral. The current price of 2793.5 is below the 20-day moving average (MA) of 2823.45, above the 50-day MA of 2761.93, and below the 200-day MA of 2808.09, indicating a neutral trend. The MACD of 9.41 indicates Positive momentum. The RSI at 49.49 is Neutral, neither overbought nor oversold. The STOCH value of 44.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3774.

Internet Initiative Japan Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3774	70 Outperform	$496.76B	24.49	14.78%	1.27%	14.76%	0.69%
Sector *	61 Neutral	$41.24B	-0.79	-14.21%	3.80%	2.39%	-73.52%
GMOYF		$2.53B	30.60	15.57%	1.50%	―	―
KDDIF		$65.06B	14.27	13.04%	3.13%	―	―
3834	79 Outperform	¥18.99B	10.45		3.53%	6.35%	54.17%
3776	67 Neutral	¥9.16B	24.00		1.34%	4.70%	35.62%
9424	65 Neutral	¥24.72B	29.07		―	24.84%	-38.06%