Silicon Studio Corp. (3907) AI Stock Analysis

• Market Cap: ¥2.87B
• Dividend Yield: N/A
• Average Volume (3M): 18.26K
• Price to Earnings (P/E): 10.5
• Beta (1Y): 0.41
• Revenue Growth: 1.02%
• EPS Growth: 3129.12%
• Country: JP
• Employees: 262
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 65.34
• Shares Outstanding: 2,973,900
• 10 Day Avg. Volume: 11,470
• 30 Day Avg. Volume: 18,263
• 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: ¥1,064.00
• Price Target Upside: 1.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: ¥1,064.00 ▲(1.62% Upside)

Silicon Studio Corp. has a solid overall stock score of 74, driven primarily by a strong valuation and positive technical analysis. The company's attractive P/E ratio and bullish technical indicators bolster its appeal. However, mixed financial performance, particularly in cash flow management, presents a risk that needs addressing. The exclusion of earnings call and corporate events data did not impact the overall score.

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 Corp. generates revenue through the licensing of its proprietary software products, which are utilized by game developers and other digital content creators. Key revenue streams include sales of middleware solutions like rendering engines, as well as ongoing support and maintenance services. The company also earns income from consulting services, assisting clients with the integration of its technologies. Additionally, strategic partnerships with hardware manufacturers and industry stakeholders contribute to its revenue model, offering collaborative opportunities and expanded market reach.

Silicon Studio Corp. Financial Statement Overview

Summary

Silicon Studio Corp. demonstrates a mixed financial performance. The income statement shows declining revenues and profitability margins, with a net profit margin of only 1.97%. The balance sheet is strong with a high equity ratio of 59.06% and low leverage, but cash flow issues are evident with a significant drop in free cash flow. Overall, the company needs to improve operational efficiencies and cash flow management.

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: Positive
• Last Price: 1047.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3907, the sentiment is Positive. The current price of 1047 is above the 20-day moving average (MA) of 998.00, above the 50-day MA of 988.94, and above the 200-day MA of 817.90, indicating a bullish trend. The MACD of 11.43 indicates Negative momentum. The RSI at 59.93 is Neutral, neither overbought nor oversold. The STOCH value of 82.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3907.

Silicon Studio Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3907	74 Outperform	¥2.87B	10.54	―	―	1.02%	3129.12%
3928	63 Neutral	¥2.15B	16.42	17.61%	―	-5.92%	-56.33%
3639	54 Neutral	¥1.99B	147.72	0.61%	―	-18.46%	152.47%
3911	54 Neutral	¥12.94B	9.10	-5.89%	―	4.13%	―
3657	50 Neutral	¥12.69B	-14.10	-5.57%	4.46%	7.53%	49.93%
3672	41 Neutral	¥3.03B	-4.30	―	―	-23.41%	5.92%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%