SAKURA Internet Inc. (3778) AI Stock Analysis

• Market Cap: ¥133.33B
• Dividend Yield: 0.12%
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): 83.3
• Beta (1Y): 1.70
• Revenue Growth: 36.42%
• EPS Growth: 28.23%
• Country: JP
• Employees: 839
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -7.55
• Shares Outstanding: 41,890,700
• 10 Day Avg. Volume: 655,830
• 30 Day Avg. Volume: 1,250,683
• PEG Ratio: 0.16
• Price to Book (P/B): 4.78
• Price to Sales (P/S): 4.57
• P/FCF Ratio: -12.11
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: ¥3,055.00 ▼(-2.08% Downside)

SAKURA Internet Inc. has a satisfactory financial performance with strong revenue growth but faces challenges in cash flow management. Technical indicators suggest bearish momentum, and the stock appears overvalued with a high P/E ratio. These factors contribute to a moderate overall stock score.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for SAKURA's services and effective market penetration, supporting long-term business expansion.

Operational Margins

Improved margins reflect efficient cost control and operational effectiveness, enhancing profitability and competitive positioning.

Cash Generation

Strong cash generation supports financial stability and provides resources for reinvestment and growth, crucial for sustaining operations.

Negative Factors

Debt Levels

Rising debt can strain financial flexibility and increase risk, necessitating careful management to maintain balance sheet health.

Free Cash Flow

Negative free cash flow indicates potential liquidity issues, limiting the ability to fund growth initiatives without external financing.

Net Profit Margin

Low net profit margins suggest limited profitability, which could hinder reinvestment and shareholder returns if not improved.

SAKURA Internet Inc. Business Overview & Revenue Model

Company Description

SAKURA Internet Inc. provides internet connection services in Japan. The company offers housing services; and hosting services, such as dedicated and rental server, VPS, and cloud services. It is also involved in setting up and management of servers on the internet; and provision of various information services using the Internet, consulting on the Internet, and telecommunications services. In addition, the company designs, produces, and sells multimedia; designs, develops, and sells computer software; produces, sells, and maintains computers and computers peripherals; and leases and manages real estate properties. SAKURA Internet Inc. was founded in 1996 and is headquartered in Osaka, Japan.

How the Company Makes Money

SAKURA Internet generates revenue through a subscription-based model, primarily by offering cloud computing services and managed hosting solutions. Key revenue streams include fees for virtual private servers, dedicated servers, and additional services such as domain registration and SSL certificates. The company also benefits from long-term contracts with clients, providing stability in its cash flow. Strategic partnerships with software providers and tech companies enhance its service offerings and attract more customers, further contributing to its earnings. Additionally, SAKURA Internet capitalizes on the growing demand for digital transformation and cloud solutions in various industries, which supports its revenue growth.

SAKURA Internet Inc. Financial Statement Overview

Summary

SAKURA Internet Inc. shows strong revenue growth and improving operational margins, indicating a positive trajectory. However, the balance sheet requires careful monitoring of debt levels, and cash flow management is a concern due to negative free cash flow.

Income Statement

SAKURA Internet Inc. has shown significant revenue growth over the past year, with a 43.9% increase from 2024 to 2025. The gross profit margin improved from 26.3% to 35.8%, indicating better cost management. However, the net profit margin is relatively low at 9.4%, despite an improvement from the previous year. The EBITDA margin increased to 28.7%, showcasing operational strength. The company needs to focus on further enhancing profitability.

Balance Sheet

The company has a reasonable debt-to-equity ratio of 0.79, indicating a balanced leverage position. The return on equity is strong at 9.8%, up from 7.1% the previous year, reflecting efficient use of equity. The equity ratio stands at 36.9%, suggesting a stable financial structure. However, the increase in total liabilities and debt levels poses a potential risk if not managed carefully.

Cash Flow

The operating cash flow increased significantly, but the free cash flow remains negative due to high capital expenditures, leading to a negative free cash flow growth rate. The operating cash flow to net income ratio is robust at 1.97, indicating good cash generation relative to profits. The negative free cash flow to net income ratio highlights the need for better capital management to improve free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	32.97B	31.41B	21.83B	20.62B	20.02B	22.17B
Gross Profit	11.08B	11.23B	5.74B	5.37B	4.71B	5.69B
EBITDA	9.93B	9.00B	4.14B	3.90B	3.83B	4.47B
Net Income	2.57B	2.94B	651.72M	666.55M	275.45M	758.36M
Balance Sheet
Total Assets	81.00B	81.42B	30.22B	26.26B	28.40B	27.98B
Cash, Cash Equivalents and Short-Term Investments	24.25B	29.49B	5.26B	4.81B	5.45B	4.17B
Total Debt	21.81B	23.65B	12.40B	9.56B	11.50B	12.22B
Total Liabilities	51.18B	51.16B	20.90B	17.77B	19.95B	19.86B
Stockholders Equity	29.61B	30.06B	9.14B	8.35B	8.32B	8.00B
Cash Flow
Free Cash Flow	0.00	-11.87B	-734.64M	3.19B	2.53B	2.62B
Operating Cash Flow	0.00	5.79B	2.88B	3.96B	3.96B	4.11B
Investing Cash Flow	0.00	-8.32B	-2.03B	-606.13M	-1.67B	-1.36B
Financing Cash Flow	0.00	26.76B	-410.59M	-4.00B	-1.01B	-3.15B

SAKURA Internet Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3120.00
• 50DMA: Negative
• 100DMA: Negative
• 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:3778, the sentiment is Positive. The current price of 3120 is below the 20-day moving average (MA) of 3163.15, below the 50-day MA of 3222.10, and below the 200-day MA of 3562.96, indicating a bearish trend. The MACD of -51.59 indicates Positive momentum. The RSI at 48.73 is Neutral, neither overbought nor oversold. The STOCH value of 65.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3778.

SAKURA Internet Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4493	78 Outperform	¥18.68B	27.10	―	0.16%	31.39%	13.12%
3915	68 Neutral	¥26.99B	25.51	―	―	17.93%	91.21%
3694	66 Neutral	¥27.94B	20.95	―	―	6.33%	14.82%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3778	52 Neutral	¥133.33B	83.34	―	0.12%	36.42%	28.23%

SAKURA Internet Inc. Corporate Events

SAKURA Internet Inc. Corrects Financial Results for Q2 FY2026

SAKURA Internet Inc. has issued a correction to its financial results presentation for the second quarter of the fiscal year ending March 2026, initially disclosed on October 28, 2025. The correction involves adjustments to investment figures and personnel numbers, reflecting an increase in investments in data centers and generative AI services, as well as a rise in employee numbers, which may impact the company’s operational and strategic positioning.

The most recent analyst rating on (JP:3778) stock is a Hold with a Yen3629.00 price target. To see the full list of analyst forecasts on SAKURA Internet Inc. stock, see the JP:3778 Stock Forecast page.

SAKURA Internet Inc. Reports Decline in Q2 Profits Despite Sales Growth

SAKURA Internet Inc. reported its financial results for the second quarter ending September 30, 2025, showing a significant decline in profits compared to the previous year. Despite a 17.8% increase in net sales, the company experienced a net loss attributable to shareholders, highlighting challenges in maintaining profitability amidst operational shifts. The announcement underscores potential impacts on the company’s market positioning and raises concerns for stakeholders regarding future financial stability.

The most recent analyst rating on (JP:3778) stock is a Hold with a Yen3476.00 price target. To see the full list of analyst forecasts on SAKURA Internet Inc. stock, see the JP:3778 Stock Forecast page.

SAKURA Internet Inc. Secures 13 Billion Yen for AI Equipment Investment

SAKURA Internet Inc. has announced a borrowing plan of 13 billion yen from major banks to invest in equipment for generative AI services, specifically for NVIDIA B200 GPUs. This move is part of their second-phase investment plan under a government cloud program, and while it is expected to have minimal immediate financial impact, it positions the company to enhance its technological capabilities and service offerings.

The most recent analyst rating on (JP:3778) stock is a Hold with a Yen3299.00 price target. To see the full list of analyst forecasts on SAKURA Internet Inc. stock, see the JP:3778 Stock Forecast page.