Datasection, Inc. (3905) AI Stock Analysis

• Market Cap: ¥57.16B
• Dividend Yield: N/A
• Average Volume (3M): 3.35M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.27
• Revenue Growth: 32.51%
• EPS Growth: 40.51%
• Country: JP
• Employees: 210
• Sector: Technology
• Sector Strength: 82
• Industry: Software - Application
• EPS (TTM): -17.77
• Shares Outstanding: 22,103,050
• 10 Day Avg. Volume: 4,060,260
• 30 Day Avg. Volume: 3,351,680
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥2,893.00
• Price Target Upside: 11.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 54 Neutral
• Price Target: ¥2,893.00 ▲(11.87% Upside)

Datasection, Inc. shows strong revenue growth but faces significant challenges in profitability and cash flow, impacting its financial performance score. Technical analysis indicates a neutral trend, while valuation metrics suggest the stock is overvalued due to negative earnings. Addressing operational inefficiencies and improving profitability are crucial for enhancing the stock's attractiveness.

Datasection, Inc. Business Overview & Revenue Model

Company Description

Datasection, Inc. (3905) is a technology company specializing in artificial intelligence and big data analytics. It operates primarily in the IT and software development sectors, offering a range of products and services that include data analysis platforms, AI-driven solutions, and consulting services. The company is dedicated to helping businesses harness the power of data to drive decision-making and improve operational efficiencies.

How the Company Makes Money

Datasection, Inc. generates revenue through the sale of its software products and AI solutions, which are offered to businesses seeking to leverage data for strategic advantage. Key revenue streams include licensing fees for its proprietary software, subscription models for its data analytics platforms, and consulting fees for custom AI and big data projects. The company may also engage in strategic partnerships with other technology firms to expand its market reach and enhance its product offerings, contributing to its earnings.

Datasection, Inc. Financial Statement Overview

Summary

Datasection, Inc. exhibits strong revenue growth but struggles with consistent profitability and cash flow generation. The company maintains a relatively strong cash position, which provides some buffer against financial volatility. To improve its financial health, the company must address operational inefficiencies and reduce its reliance on debt.

Income Statement

Datasection, Inc. has shown a steady revenue growth from 2020 to 2025, with a significant increase from 2024 to 2025. However, the company is currently facing profitability challenges as evidenced by its negative EBIT and net income margins in recent years. The gross profit margin has remained relatively stable, indicating the company is maintaining its cost of goods sold effectively. Despite the growth in revenue, the company needs to improve its operational efficiency to return to profitability.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio, which suggests a balanced capital structure. However, the equity ratio has been declining, indicating an increasing reliance on debt to finance assets. The company has maintained a strong cash position relative to its liabilities, which provides some financial stability. Improving stockholders' equity and reducing total liabilities will be crucial for long-term financial health.

Cash Flow

The cash flow statement highlights challenges in generating positive free cash flow, with negative values in recent years. The operating cash flow to net income ratio indicates cash flow issues, exacerbated by significant capital expenditures. Despite these challenges, the company has seen periods of positive operating cash flow, suggesting potential for cash generation if operational inefficiencies are addressed.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.94B	2.94B	2.23B	1.92B	1.69B	1.39B
Gross Profit	1.22B	1.16B	701.28M	785.61M	684.75M	537.87M
EBITDA	-307.00M	-315.25M	-873.90M	226.12M	322.44M	240.38M
Net Income	-654.73M	-654.99M	-1.26B	-530.29M	2.44M	-41.77M
Balance Sheet
Total Assets	4.59B	4.59B	3.79B	4.39B	4.40B	4.27B
Cash, Cash Equivalents and Short-Term Investments	526.04M	526.04M	1.69B	1.45B	1.45B	1.64B
Total Debt	1.37B	1.37B	1.24B	1.16B	960.68M	709.88M
Total Liabilities	2.19B	2.19B	1.80B	1.88B	1.58B	1.40B
Stockholders Equity	2.38B	2.38B	1.95B	2.48B	2.80B	2.83B
Cash Flow
Free Cash Flow	0.00	-177.43M	-360.75M	-294.40M	-76.90M	-4.12M
Operating Cash Flow	0.00	-83.41M	333.60M	2.42M	113.09M	169.73M
Investing Cash Flow	0.00	-1.19B	-569.26M	-255.77M	-304.07M	-508.84M
Financing Cash Flow	0.00	163.55M	382.96M	242.02M	28.31M	232.93M

Datasection, Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 2586.00
• 50DMA: Negative
• 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:3905, the sentiment is Neutral. The current price of 2586 is below the 20-day moving average (MA) of 2755.20, below the 50-day MA of 2873.26, and above the 200-day MA of 1448.32, indicating a neutral trend. The MACD of -111.33 indicates Positive momentum. The RSI at 46.42 is Neutral, neither overbought nor oversold. The STOCH value of 49.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3905.

Datasection, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3937	84 Outperform	¥13.62B	14.47		3.60%	2.47%	46.51%
4299	79 Outperform	¥14.13B	11.31		3.70%	4.86%	4.48%
3800	68 Neutral	¥13.86B	19.28		3.62%	-1.03%	-3.19%
Sector *	61 Neutral	$35.55B	8.88	-11.02%	1.87%	8.55%	-8.14%
3856	60 Neutral	¥19.41B	8.79		0.29%	-40.21%	-54.31%
3905	54 Neutral	¥57.16B	―		―	32.51%	40.51%
3823	40 Neutral	¥8.02B	―		―	99.79%	7.36%