Datasection, Inc. (3905) AI Stock Analysis

• Market Cap: ¥46.88B
• Dividend Yield: N/A
• Average Volume (3M): 5.98M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.27
• Revenue Growth: 27.58%
• EPS Growth: -1.50%
• Country: JP
• Employees: 210
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -8.75
• Shares Outstanding: 22,103,050
• 10 Day Avg. Volume: 5,608,600
• 30 Day Avg. Volume: 5,980,486
• PEG Ratio: 0.46
• Price to Book (P/B): 7.09
• Price to Sales (P/S): 5.74
• P/FCF Ratio: -95.26
• 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: 57 Neutral
• Price Target: ¥2,536.00 ▲(12.96% Upside)

The overall stock score is primarily influenced by financial performance challenges, particularly in profitability and cash flow. Technical analysis shows positive short-term momentum, but valuation concerns due to negative earnings impact the score. Addressing operational inefficiencies and improving profitability are key to enhancing the stock's attractiveness.

Positive Factors

Revenue Growth

The company demonstrates robust revenue growth, indicating successful market penetration and product adoption, which can drive long-term business expansion and stability.

Cash Position

A strong cash position provides financial stability and flexibility, enabling the company to invest in growth opportunities and weather economic downturns.

Product Offering

Offering advanced data analytics and cloud services positions the company well in a growing industry, supporting long-term demand and competitive advantage.

Negative Factors

Profitability Challenges

Ongoing profitability issues could hinder long-term financial health and limit the ability to reinvest in growth and innovation.

Cash Flow Issues

Negative free cash flow indicates potential liquidity issues, which may affect the company's ability to fund operations and growth initiatives.

Debt Reliance

Rising debt levels can strain financial resources and increase risk, potentially impacting long-term sustainability and investment capacity.

Datasection, Inc. Business Overview & Revenue Model

Company Description

Datasection, Inc. (3905) is a technology company specializing in data analysis and management solutions. The company operates primarily in the information technology sector, providing advanced data analytics, machine learning applications, and cloud-based services. Its core products include data processing platforms and analytics tools designed to help businesses optimize their operations and make data-driven decisions.

How the Company Makes Money

Datasection, Inc. generates revenue through a combination of subscription-based services and licensing fees for its software products. The company primarily earns money from businesses that subscribe to its data analytics platforms for ongoing access to advanced tools and features. Additionally, Datasection partners with various enterprises to offer customized analytics solutions, which contribute significantly to its revenue. These partnerships often involve long-term contracts that provide a steady income stream. The company also benefits from offering training and support services, further enhancing its revenue generation capabilities.

Datasection, Inc. Financial Statement Overview

Summary

Datasection, Inc. exhibits strong revenue growth, yet 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. Strengthening profitability and cash flow will be pivotal for future success.

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	3.07B	2.94B	2.23B	1.92B	1.69B	1.39B
Gross Profit	1.15B	1.16B	701.28M	785.61M	684.75M	537.87M
EBITDA	-467.09M	-315.25M	-873.90M	226.12M	322.44M	240.38M
Net Income	-895.12M	-654.99M	-1.26B	-530.29M	2.44M	-41.77M
Balance Sheet
Total Assets	6.42B	4.59B	3.79B	4.39B	4.40B	4.27B
Cash, Cash Equivalents and Short-Term Investments	2.00B	526.04M	1.69B	1.45B	1.45B	1.64B
Total Debt	1.03B	1.37B	1.24B	1.51B	1.21B	1.11B
Total Liabilities	1.65B	2.19B	1.80B	1.88B	1.58B	1.40B
Stockholders Equity	4.74B	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: Positive
• Last Price: 2245.00
• 50DMA: Positive
• 100DMA: Negative
• 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 Positive. The current price of 2245 is below the 20-day moving average (MA) of 2279.85, above the 50-day MA of 2082.94, and above the 200-day MA of 1828.55, indicating a neutral trend. The MACD of 60.80 indicates Positive momentum. The RSI at 51.36 is Neutral, neither overbought nor oversold. The STOCH value of 63.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3905.

Datasection, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4299	79 Outperform	¥13.88B	11.44	―	3.76%	3.96%	-3.68%
3937	68 Neutral	¥13.60B	14.45	―	3.74%	0.43%	44.79%
3800	68 Neutral	¥13.89B	18.76	―	3.65%	0.85%	12.73%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3905	57 Neutral	¥46.88B	-42.76	―	―	27.58%	-1.50%
3856	45 Neutral	¥18.31B	8.29	―	0.84%	-40.21%	-54.31%
3823	40 Neutral	¥8.02B	-71.15	―	―	134.28%	94.74%