Eltes Co., Ltd. (3967) AI Stock Analysis

• Market Cap: ¥3.58B
• Dividend Yield: N/A
• Average Volume (3M): 14.12K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.90
• Revenue Growth: 15.39%
• EPS Growth: -562.65%
• Country: JP
• Employees: 409
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.07
• Shares Outstanding: 6,220,880
• 10 Day Avg. Volume: 13,450
• 30 Day Avg. Volume: 14,120
• PEG Ratio: 0.01
• Price to Book (P/B): 2.36
• Price to Sales (P/S): 0.60
• P/FCF Ratio: 9.47
• 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): 16.2
• Revenue Forecast (FY): ¥10.00B

• Rating: 44 Neutral
• Price Target: ¥559.00 ▼(-14.00% Downside)
• Action: Reiterated Date: 08/29/25
• Date: Action: Reiterated 08/29/25

The overall stock score is primarily impacted by weak financial performance and poor valuation metrics. Technical analysis further indicates bearish momentum, contributing to a low overall score. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Recurring revenue model

A business built on recurring contract fees for continuous monitoring creates durable revenue visibility and client stickiness. That model supports predictable cash inflows, easier budgeting for R&D and sales, and higher lifetime value per client—benefits that persist over quarters.

Revenue growth

Reported revenue growth of ~23% signals sustained demand for online risk and reputation services. Durable top-line expansion enables scale efficiencies, improves leverage on fixed costs, and creates room to invest in product development and customer success over the medium term.

Improving cash generation

Improving operating and free cash flow strengthens liquidity and reduces reliance on external financing. Better cash conversion supports recurring service delivery, funds working capital and debt servicing, and gives management flexibility to invest in product enhancements over months.

Negative Factors

High leverage

Significant debt increases fixed financial obligations and amplifies downside risk from revenue volatility. High leverage constrains strategic flexibility, raises refinancing risk, and can force prioritization of debt service over growth investments during adverse conditions.

Inconsistent profitability

Stable gross margins but volatile net income imply operating or non-operating cost swings undermine durable profitability. Persisting negative net income erodes retained earnings and weakens the firm's ability to self-fund expansion or absorb cyclical shocks over the medium term.

EPS decline/earnings volatility

A roughly 491% decline in EPS indicates sharp earnings volatility and impaired near-term profitability. Large EPS swings reduce predictability of returns, complicate capital allocation and investor confidence, and signal operational or one-off pressures that can persist absent fixes.

Eltes Co., Ltd. Business Overview & Revenue Model

Company Description

Eltes Co.,Ltd. engages in the AI security, digital risk, and DX promotion businesses in Japan. The company offers social and internal risk management, on-line reputation management, digital credit, information bank/e-Government and security services. It also operates a physical security business; and provides services related to the promotion of DX in the security industry by combining AI and IoT. order. In addition, the company offers digitization support for administrative services for residents; dispatch services for DX human resources, such as engineers; and property management business. Further, it provides multiple solutions from pre-avoidance of social risks to post-crisis response methods, as well as internal threat detection services. Eltes Co.,Ltd. was founded in 2004 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Eltes makes money primarily by providing internet risk-related services to organizations, generating revenue from fees paid by clients for ongoing monitoring and risk management support and from project-based services tied to specific investigations or incident-response needs. Key revenue streams include (1) recurring or contract-based fees for continuous monitoring of online/social media activity and reporting, and (2) one-time or time-billed fees for consulting-style engagements such as incident analysis, response support, or tailored risk assessments. Material partner names, segment-level breakdowns, pricing structure details, and the relative contribution of each service line are null.

Eltes Co., Ltd. Financial Statement Overview

Summary

Eltes Co., Ltd. presents a mixed financial picture. While the company demonstrates solid gross margins and improving cash flow, it faces challenges with revenue growth and profitability. High leverage on the balance sheet highlights potential financial risks, emphasizing the need for improved earnings stability.

Income Statement

The company shows a mixed performance on the income statement. Gross profit margin has been relatively stable, indicating effective cost management, but net income has fluctuated significantly, impacting net profit margins. Recent declines in revenue growth rate and negative net income in the latest year suggest challenges in maintaining profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage which could pose financial risks. Return on equity has been inconsistent due to fluctuating net income. However, the equity ratio suggests a reasonable proportion of assets financed by equity, providing some stability.

Cash Flow

The cash flow statement reflects improving cash flow performance, with notable growth in operating cash flow and free cash flow in recent periods. However, the free cash flow to net income ratio is inconsistent due to varying net income levels, necessitating careful cash management.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	7.59B	7.32B	6.54B	4.69B	2.68B	1.99B
Gross Profit	2.82B	2.51B	2.50B	1.94B	1.38B	979.98M
EBITDA	-70.10M	-140.39M	557.18M	446.73M	247.32M	-426.67M
Net Income	-783.76M	-860.38M	257.30M	42.64M	127.81M	-529.52M
Balance Sheet
Total Assets	7.13B	7.39B	6.90B	6.01B	2.47B	2.43B
Cash, Cash Equivalents and Short-Term Investments	2.29B	2.52B	1.56B	1.66B	1.27B	1.07B
Total Debt	3.90B	4.21B	3.33B	2.71B	731.98M	803.97M
Total Liabilities	5.19B	5.52B	4.29B	3.67B	1.07B	1.16B
Stockholders Equity	1.90B	1.84B	2.61B	2.34B	1.40B	1.27B
Cash Flow
Free Cash Flow	0.00	460.18M	-184.91M	566.01M	119.17M	-429.27M
Operating Cash Flow	0.00	587.69M	-76.00K	715.09M	190.78M	-412.44M
Investing Cash Flow	0.00	-570.56M	-690.00M	-3.11B	128.83M	-457.73M
Financing Cash Flow	0.00	938.55M	589.85M	2.79B	-74.06M	568.10M

Eltes Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 650.00
• 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:3967, the sentiment is Negative. The current price of 650 is above the 20-day moving average (MA) of 608.60, above the 50-day MA of 640.02, and below the 200-day MA of 668.33, indicating a bearish trend. The MACD of -19.36 indicates Positive momentum. The RSI at 33.93 is Neutral, neither overbought nor oversold. The STOCH value of 8.13 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3967.

Eltes Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3917	66 Neutral	¥4.72B	62.68	―	―	7.40%	―
5033	66 Neutral	¥4.86B	21.99	―	―	7.60%	19.13%
5586	65 Neutral	¥12.69B	37.90	―	―	25.41%	9.69%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5572	59 Neutral	¥8.90B	33.78	―	―	60.41%	-27.67%
4476	56 Neutral	¥3.89B	35.15	―	―	10.43%	-65.78%
3967	44 Neutral	¥3.58B	-2,663.17	―	―	15.39%	-562.65%