Silver Egg Technology Co., Ltd. (3961) AI Stock Analysis

• Market Cap: ¥2.28B
• Dividend Yield: N/A
• Average Volume (3M): 18.53K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.80
• Revenue Growth: -12.06%
• EPS Growth: -184.14%
• Country: JP
• Employees: 56
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): -8.33
• Shares Outstanding: 2,976,942
• 10 Day Avg. Volume: 50,470
• 30 Day Avg. Volume: 18,526
• PEG Ratio: 0.19
• Price to Book (P/B): 1.65
• Price to Sales (P/S): 2.18
• P/FCF Ratio: -113.28
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: ¥772.00 ▲(0.78% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is mainly held back by deteriorating 2025 operating performance and negative free cash flow, despite a strong, debt-free balance sheet. Technicals are mildly supportive with the price above longer-term averages, while valuation remains challenged due to losses reflected in a negative P/E.

Positive Factors

Debt-free balance sheet

The company’s zero-debt, equity-funded capital structure materially lowers solvency and refinancing risk and preserves strategic optionality. Over a multi-month horizon this balance-sheet conservatism supports continued R&D and customer retention spending without near-term leverage constraints.

High gross margins

Sustained mid-to-high 70% gross margins indicate attractive core economics in the product offering. If demand stabilizes, high gross margins provide room to absorb SG&A, fund product development, and restore operating profitability, making margin recovery a durable lever for earnings improvement.

Scalable personalization software

The business delivers data-driven personalization and recommendation software, a structurally growing need for digital commerce. Software-based delivery implies scalable unit economics and potential for recurring client relationships, supporting revenue durability if client demand remains.

Negative Factors

Revenue decline and losses

A ~15% revenue decline coupled with a swing to operating and net losses signals weakened demand and monetization. Over 2–6 months this undermines operating leverage, risks further margin erosion, and requires management to either cut costs or rebuild top-line to sustain long-term competitiveness.

Negative operating and free cash flow

The shift to negative operating and free cash flow creates funding pressure even with no debt. Persisting negative cash generation can force asset sales, capital raises, or spending cuts that impair product development and sales capacity, posing a durable risk to growth and execution.

Severe EPS volatility

An EPS decline of over 250% reflects pronounced profitability volatility and operational stress. Such swings reduce management flexibility, increase stakeholder scrutiny, and make long-term planning and investment prioritization harder, weakening resilience to future market or product setbacks.

Silver Egg Technology Co., Ltd. Business Overview & Revenue Model

Company Description

Silver Egg Technology Co., Ltd. develops and provides artificial intelligence (AI) based Web marketing services and technology for analyzing big data in real time in Japan. It offers Aigent Recommender, which provides real-time recommendation service that can be used in various scenes, such as websites, mobile apps, and digital assistants in physical stores; Aigent Recogazo, a real-time recommendation mail service; HotView that offers recommendation advertising services; and Prospector, a prospect visualization tool. The company was incorporated in 1998 and is headquartered in Suita, Japan.

How the Company Makes Money

Silver Egg Technology Co., Ltd. generates revenue through the sale of its AI-powered recommendation engine services and related software solutions. The company offers its products to businesses seeking to enhance their customer engagement through personalized recommendations and data insights. The primary revenue streams include subscription fees for its software-as-a-service (SaaS) offerings, licensing fees for its technology, and professional services such as implementation, customization, and ongoing support. Significant partnerships with e-commerce platforms, retailers, and digital marketing firms also play a crucial role in expanding its customer base and driving sales. Additionally, the company may leverage strategic collaborations to integrate its technology with third-party platforms, further broadening its market reach.

Silver Egg Technology Co., Ltd. Financial Statement Overview

Summary

Income statement and cash flow are weak: 2025 revenue fell ~15% and the company swung to operating/net losses, while operating cash flow and free cash flow turned negative. Offsetting this, the balance sheet is strong with zero debt and a solid equity base, which reduces solvency risk.

Income Statement

Profitability deteriorated sharply in 2025 (annual): revenue fell about 15% year over year and the company swung from positive operating profit and net income in 2024 to operating and net losses. That said, gross margin remains very strong (mid-to-high 70% range recently), suggesting the core economics can be attractive if costs are controlled, but the latest year shows meaningful execution pressure and weaker demand/monetization.

Balance Sheet

Balance sheet quality is a clear strength: the company reports zero debt across the period and is largely equity-funded, which lowers financial risk and provides flexibility. Total assets are relatively stable, though the 2025 loss pushed return on equity into negative territory, signaling weaker efficiency despite the conservative capital structure.

Cash Flow

Cash generation weakened materially in 2025 (annual), with operating cash flow and free cash flow both turning negative after solid positive cash flow in 2023–2024. Historically, cash flow generally tracked earnings in the profitable years, but the latest downturn introduces funding/consumption risk if negative cash flow persists.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	633.00K	1.05B	1.23B	1.26B	1.24B	1.21B
Gross Profit	-531.00K	809.94M	978.63M	986.06M	1.24B	1.21B
EBITDA	39.58M	-1.83M	93.69M	125.44M	99.04M	230.73M
Net Income	4.24M	-47.43M	30.30M	59.10M	123.00M	202.70M
Balance Sheet
Total Assets	1.38B	1.45B	1.52B	1.51B	1.46B	1.28B
Cash, Cash Equivalents and Short-Term Investments	1.02B	1.17B	1.18B	1.10B	1.02B	939.55M
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	144.00M	67.30M	101.29M	127.33M	144.65M	70.51M
Stockholders Equity	1.24B	1.38B	1.42B	1.38B	1.24B	1.21B
Cash Flow
Free Cash Flow	0.00	-20.10M	92.28M	74.88M	80.94M	-8.40M
Operating Cash Flow	0.00	-19.34M	102.74M	78.18M	95.29M	13.50M
Investing Cash Flow	0.00	12.98M	-25.03M	-2.58M	-14.35M	31.29M
Financing Cash Flow	0.00	0.00	4.94M	0.00	0.00	0.00

Silver Egg Technology Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 766.00
• 50DMA: Positive
• 100DMA: Positive
• 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:3961, the sentiment is Positive. The current price of 766 is above the 20-day moving average (MA) of 763.80, above the 50-day MA of 764.08, and above the 200-day MA of 683.00, indicating a bullish trend. The MACD of 0.57 indicates Positive momentum. The RSI at 60.42 is Neutral, neither overbought nor oversold. The STOCH value of 66.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3961.

Silver Egg Technology Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6180	75 Outperform	¥7.66B	12.37	―	3.29%	7.47%	55.61%
6185	64 Neutral	¥6.25B	13.22	―	―	8.77%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6562	60 Neutral	¥12.19B	13.47	―	―	33.34%	-25.08%
2489	57 Neutral	¥10.80B	44.82	―	1.09%	-5.70%	-215.73%
3961	52 Neutral	¥2.28B	-48.01	―	―	-12.06%	-184.14%