Silicon Studio Corp. (3907) AI Stock Analysis

• Market Cap: ¥2.44B
• Dividend Yield: 1.26%
• Average Volume (3M): 27.02K
• Price to Earnings (P/E): 7.8
• Beta (1Y): 0.52
• 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: 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: 58 Neutral
• Price Target: ¥854.00 ▲(7.29% Upside)

Silicon Studio Corp. has a moderate overall stock score. The most significant factor is the mixed financial performance, with strong equity but declining profitability and cash flow issues. Technical analysis indicates bearish momentum, while the valuation suggests the stock might be undervalued. The absence of earnings call data and corporate events limits further insights.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage and high equity provides financial stability and flexibility to invest in growth opportunities.

Revenue Streams

Diverse revenue streams from software licenses and consulting services ensure steady income and reduce dependency on a single source.

Market Demand

Increasing demand for advanced visual solutions supports long-term growth prospects in the gaming and entertainment sectors.

Negative Factors

Declining Revenue

Declining revenue indicates challenges in maintaining sales momentum, which could impact long-term profitability and market position.

Profitability Concerns

Reduced profitability margins suggest operational inefficiencies and potential challenges in cost management, affecting future earnings.

Cash Flow Issues

Significant decline in free cash flow limits the company's ability to invest in growth and may strain financial resources.

Silicon Studio Corp. Business Overview & Revenue Model

Company Description

Silicon Studio Corp. (3907) is a leading technology company based in Japan that specializes in providing innovative solutions for the video game and entertainment industries. Established in 2000, the company operates primarily in the fields of software development, graphics, and game engine technology. Silicon Studio's core products include its proprietary game development tools and engines, such as the YEBIS middleware, which enhances visual quality and realism in gaming experiences. The company also offers consulting services and solutions for digital content creation, targeting developers and creators seeking to optimize their projects.

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 are significant due to a sharp decline in free cash flow, which could impact future investment and growth opportunities. The company needs to address operational efficiencies and cash flow management to improve its financial health.

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	194.00M	281.00M	456.00M	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: 796.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 796 is below the 20-day moving average (MA) of 831.99, below the 50-day MA of 897.54, and below the 200-day MA of 833.91, indicating a bearish trend. The MACD of -31.68 indicates Negative momentum. The RSI at 39.47 is Neutral, neither overbought nor oversold. The STOCH value of 28.63 is Neutral, 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	65 Neutral	¥1.96B	14.96	―	―	-10.80%	-64.63%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3907	58 Neutral	¥2.44B	7.78	―	1.26%	2.33%	―
3657	50 Neutral	¥11.95B	-13.28	―	4.73%	7.53%	49.93%
3911	48 Neutral	¥10.23B	5.66	―	―	11.15%	―
3639	47 Neutral	¥1.78B	132.94	―	―	-17.76%	-15.23%
3672	41 Neutral	¥3.98B	-3.75	―	―	-17.60%	37.30%