Datasection, Inc. (3905) AI Stock Analysis

• Market Cap: ¥34.33B
• Dividend Yield: N/A
• Average Volume (3M): 5.98M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.23
• Revenue Growth: 32.51%
• EPS Growth: 40.51%
• Country: JP
• Employees: 210
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -17.77
• 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: ¥1,615.00
• Price Target Upside: 3.99% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 47 Neutral
• Price Target: ¥1,615.00 ▲(3.99% Upside)

Datasection, Inc. faces significant challenges with profitability and cash flow, impacting its financial performance score. The technical analysis indicates bearish momentum, and the valuation is unattractive due to a negative P/E ratio and no dividend yield. These factors collectively result in a below-average stock score.

Datasection, Inc. Business Overview & Revenue Model

Company Description

Datasection Inc. provides solutions for social media analysis, retail marketing, and artificial intelligence development in Japan, Chile, and Colombia. Its solutions include product review survey; lifestyle analysis; brand image measurement; public opinion polls; Insight Intelligence Q, a tool that allows to search and analyze consumer voices on the web; and Social Monitor, a risk monitoring tool that constantly checks the consumer voices. The company also offers FollowUP, a tool that analyzes the behavior of the store visitors; and artificial intelligence solutions comprising data crawling, image processing, and social media data analysis. Datasection Inc. was incorporated in 2000 and is headquartered in Tokyo, Japan.

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. shows strong revenue growth but struggles with profitability and cash flow. The company maintains a strong cash position, providing some financial stability. Operational inefficiencies and reliance on debt need addressing for improved financial health.

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: Negative
• Last Price: 1553.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3905, the sentiment is Negative. The current price of 1553 is below the 20-day moving average (MA) of 2044.95, below the 50-day MA of 2433.42, and below the 200-day MA of 1622.68, indicating a bearish trend. The MACD of -276.88 indicates Positive momentum. The RSI at 37.93 is Neutral, neither overbought nor oversold. The STOCH value of 16.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥14.24B	11.39	―	3.75%	4.86%	4.48%
3937	75 Outperform	¥13.12B	13.94	―	3.65%	2.47%	46.51%
3800	68 Neutral	¥13.88B	19.31	―	3.67%	-1.03%	-3.19%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3856	48 Neutral	¥17.28B	7.83	―	0.33%	-40.21%	-54.31%
3905	47 Neutral	¥34.33B	―	―	―	32.51%	40.51%
3823	40 Neutral	¥6.85B	―	―	―	134.28%	94.55%