Silicon Studio Corp. (3907) AI Stock Analysis

• Market Cap: ¥2.38B
• Dividend Yield: N/A
• Average Volume (3M): 27.02K
• Price to Earnings (P/E): 7.6
• Beta (1Y): 0.54
• Revenue Growth: 2.33%
• EPS Growth: N/A
• Country: JP
• Employees: 262
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): -11.28
• Shares Outstanding: 2,973,900
• 10 Day Avg. Volume: 53,120
• 30 Day Avg. Volume: 27,020
• PEG Ratio: -0.46
• Price to Book (P/B): 1.27
• Price to Sales (P/S): 0.50
• P/FCF Ratio: 551.46
• 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: ¥929.00
• Price Target Upside: 6.17% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 58 Neutral
• Price Target: ¥929.00 ▲(6.17% Upside)

Silicon Studio Corp.'s overall stock score is primarily affected by its mixed financial performance and bearish technical indicators. While the company maintains a strong balance sheet, declining revenues and cash flow issues pose significant risks. The stock's undervaluation offers some potential upside, but the lack of dividend yield and negative market momentum are concerns.

Silicon Studio Corp. Business Overview & Revenue Model

Company Description

Silicon Studio Corporation develops game engine and middleware products in Japan and internationally. The company offers YEBIS, an optical effects middleware; Mizuchi, the real-time rendering engine used in gaming and virtual reality (VR), video and animation, product and architectural visualization, etc.; Motion Portrait, a CG technology to create facial animation from a digital photo; and Enlighten, a lighting technology that delivers real-time global illumination over mobile, desktop, and VR platforms. It also provides human resource services comprising development, consulting, outsourcing, and staffing, including temporary, temporary-to-permanent, and full-time placement services. The company was incorporated in 1999 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Silicon Studio generates revenue through multiple streams, primarily by selling software licenses for its game development tools and middleware, including YEBIS. The company charges developers for usage rights and ongoing support, which provides a steady income. Additionally, Silicon Studio earns revenue from consulting services, where they assist other companies in optimizing their game development processes and strategies. Partnerships with major gaming companies and collaborations on specific projects also contribute to revenue, as the company may receive fees or royalties based on the success of the titles developed using their technology. Furthermore, the growing demand for high-quality visual experiences in gaming and entertainment continues to drive sales and expand their market reach.

Silicon Studio Corp. Financial Statement Overview

Summary

Silicon Studio Corp. shows a mixed financial performance. The balance sheet is strong with low leverage and high equity, but the income statement reveals declining revenues and profitability margins. Cash flow concerns arise from a substantial drop in free cash flow, which could impact future investment and growth opportunities.

Income Statement

Silicon Studio Corp. has experienced a decline in revenue from 2023 to 2024, with a revenue growth rate of -3.07%. The gross profit margin for 2024 is 42.96%, indicating a solid ability to cover production costs. However, the net profit margin dropped to 1.97%, highlighting reduced profitability. EBIT and EBITDA margins are also relatively low at 3.24% and 4.01%, respectively, reflecting operational challenges.

Balance Sheet

The company maintains a strong equity position with an equity ratio of 59.06%, suggesting financial stability. The debt-to-equity ratio is low at 0.15, indicating conservative leverage. However, the return on equity has decreased to 5.00%, which may concern investors about the efficiency in generating returns from equity.

Cash Flow

Silicon Studio Corp. shows a sharp decline in free cash flow growth, falling from JPY 93 million in 2023 to JPY 4 million in 2024. The operating cash flow to net income ratio is 1.06, indicating a reasonable conversion of net income to cash. However, a significant drop in free cash flow to net income ratio to 0.05 reflects potential issues in cash generation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.41B	4.55B	4.51B	3.99B	4.13B
Gross Profit	1.90B	1.95B	2.00B	1.45B	1.51B
EBITDA	179.00M	281.00M	390.00M	9.00M	154.00M
Net Income	87.00M	200.00M	254.00M	-101.00M	16.00M
Balance Sheet
Total Assets	2.94B	3.16B	3.44B	2.82B	2.64B
Cash, Cash Equivalents and Short-Term Investments	1.24B	1.51B	1.70B	1.08B	932.00M
Total Debt	265.00M	436.00M	579.00M	567.00M	465.00M
Total Liabilities	1.21B	1.40B	1.74B	1.46B	1.19B
Stockholders Equity	1.74B	1.76B	1.70B	1.36B	1.45B
Cash Flow
Free Cash Flow	4.00M	93.00M	527.00M	-29.00M	-87.00M
Operating Cash Flow	92.00M	121.00M	566.00M	107.00M	28.00M
Investing Cash Flow	-82.00M	-8.00M	-8.00M	-125.00M	-122.00M
Financing Cash Flow	-276.00M	-289.00M	93.00M	120.00M	122.00M

Silicon Studio Corp. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 875.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3907, the sentiment is Negative. The current price of 875 is below the 20-day moving average (MA) of 972.75, below the 50-day MA of 989.16, and above the 200-day MA of 832.15, indicating a neutral trend. The MACD of -27.74 indicates Positive momentum. The RSI at 38.22 is Neutral, neither overbought nor oversold. The STOCH value of 2.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3907.

Silicon Studio Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3928	63 Neutral	¥1.95B	14.89	―	―	-5.92%	-56.33%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3907	58 Neutral	¥2.38B	7.60	―	―	2.33%	―
3911	55 Neutral	¥11.21B	7.88	―	―	4.13%	―
3657	50 Neutral	¥11.77B	―	―	4.80%	7.53%	49.93%
3639	46 Neutral	¥1.81B	134.87	―	―	-18.46%	152.11%
3672	41 Neutral	¥2.72B	―	―	―	-23.41%	5.92%