Segue Group Co., Ltd. (3968) AI Stock Analysis

• Market Cap: ¥16.22B
• Dividend Yield: 2.4%
• Average Volume (3M): 54.38K
• Price to Earnings (P/E): 146.5
• Beta (1Y): 1.01
• Revenue Growth: 4.02%
• EPS Growth: -87.61%
• Country: JP
• Employees: 709
• Sector: Technology
• Sector Strength: 87
• Industry: Information Technology Services
• EPS (TTM): 4.44
• Shares Outstanding: 32,564,075
• 10 Day Avg. Volume: 88,800
• 30 Day Avg. Volume: 54,376
• PEG Ratio: 0.18
• Price to Book (P/B): 2.49
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.86
• 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

• Rating: 63 Neutral
• Price Target: ¥534.00 ▲(5.95%Upside)

The stock reflects strong revenue growth and operational efficiency but faces significant challenges with high valuation and declining profitability margins. Technical analysis provides mixed signals, while lack of earnings call data limits further insights.

Segue Group Co., Ltd. Business Overview & Revenue Model

Company Description

Segue Group Co., Ltd. (3968) is a Japanese company that operates in the technology sector, specializing in the provision of IT services and solutions. The company's core offerings include network infrastructure services, cybersecurity solutions, and cloud-based systems integration. Segue Group also provides software development and maintenance services, catering to a diverse range of industries seeking to enhance their digital infrastructure and security.

How the Company Makes Money

Segue Group Co., Ltd. generates revenue through multiple streams primarily centered around its IT services and solutions. The company earns income by providing network infrastructure services where it designs, implements, and maintains network systems for its clients. Additionally, Segue Group offers cybersecurity solutions, which include security assessments, threat mitigation strategies, and ongoing security management services. These services are often provided on a subscription or contract basis, ensuring recurring revenue. The company's cloud-based systems integration services also contribute significantly to its earnings, as businesses increasingly move towards cloud computing to improve efficiency and scalability. Segue Group may have established partnerships with other technology firms to broaden its service offerings and enhance its market reach, although specific partnerships are not detailed here. Overall, the company's revenue model is built on providing essential IT services that help businesses improve their technological capabilities and protect their digital assets.

Segue Group Co., Ltd. Financial Statement Overview

Summary

Segue Group Co., Ltd. exhibits strong revenue growth and efficient operations, though profitability margins have faced pressure. The balance sheet reflects increased leverage but remains stable. Improved cash flow generation suggests robust cash management, though capital allocation could be optimized.

Income Statement

Segue Group Co., Ltd. has demonstrated strong revenue growth over the years, with a revenue increase from 10,992 million in 2020 to 18,717 million in 2024. Gross profit margin remains healthy, consistently above 20%, indicating effective cost management. However, the net profit margin has declined from 5.8% in 2020 to 2.7% in 2024, which may suggest increased cost pressures or lower pricing power. EBIT and EBITDA margins are stable, reflecting operational efficiency.

Balance Sheet

The company maintains a solid equity base, with an increasing equity ratio from 44.1% in 2019 to 22.3% in 2024, although it has decreased in recent years. The debt-to-equity ratio has risen to 0.76 in 2024, indicating increased leverage but still within a manageable range. Return on equity has shown variability, decreasing sharply in 2024, reflecting potential challenges in generating returns for shareholders.

Cash Flow

Operating cash flow has improved significantly, turning from negative in 2021 to positive in 2024, showcasing better cash management. Free cash flow has grown alongside operating cash flow, highlighting improved liquidity. However, the free cash flow to net income ratio is relatively high, which might indicate less efficient capital allocation.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	18.72B	17.44B	13.62B	12.04B	10.99B
Gross Profit	4.59B	4.12B	3.56B	3.09B	3.09B
EBITDA	1.46B	1.23B	1.32B	877.56M	1.10B
Net Income	507.69M	660.51M	743.32M	454.76M	634.16M
Balance Sheet
Total Assets	13.63B	11.83B	11.25B	8.63B	7.19B
Cash, Cash Equivalents and Short-Term Investments	4.07B	3.45B	3.11B	1.35B	1.73B
Total Debt	2.31B	849.96M	1.13B	501.83M	9.86M
Total Liabilities	10.44B	7.82B	7.57B	5.43B	4.02B
Stockholders Equity	3.04B	4.00B	3.67B	3.20B	3.17B
Cash Flow
Free Cash Flow	1.59B	1.28B	1.03B	-275.52M	65.93M
Operating Cash Flow	1.76B	1.59B	1.13B	-151.11M	163.62M
Investing Cash Flow	-991.28M	-658.99M	84.18M	-254.92M	-401.66M
Financing Cash Flow	-335.04M	-669.10M	453.88M	17.11M	-216.03M

Segue Group Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 504.00
• 50DMA: Negative
• 100DMA: Positive
• 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:3968, the sentiment is Neutral. The current price of 504 is below the 20-day moving average (MA) of 506.37, below the 50-day MA of 507.86, and below the 200-day MA of 550.29, indicating a bearish trend. The MACD of -0.20 indicates Positive momentum. The RSI at 48.48 is Neutral, neither overbought nor oversold. The STOCH value of 9.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3968.

Segue Group Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2335	81 Outperform	¥16.64B	13.46		3.56%	1.83%	19.05%
9799	75 Outperform	¥16.68B	13.59		2.69%	6.99%	11.02%
2185	73 Outperform	¥19.51B	9.23		3.27%	4.16%	36.43%
6572	71 Outperform	¥21.83B	48.82		0.86%	17.17%	160.84%
3837	67 Neutral	¥20.86B	17.83		1.49%	11.03%	14.63%
Sector *	63 Neutral	$34.04B	6.14	-11.52%	1.82%	5.53%	-18.79%
3968	63 Neutral	¥16.22B	146.54		2.40%	4.02%	-87.61%

Segue Group Co., Ltd. Corporate Events

Segue Group Announces Merger with J’s Solution to Streamline Operations

Segue Group Co., Ltd. has announced the absorption-type merger of its wholly owned subsidiary, J’s Solution Co., Ltd., effective August 1, 2025. This strategic move aims to streamline operations by consolidating management resources and eliminating duplicate functions within the group, enhancing overall business efficiency.

Segue Group Co., Ltd. Reports Q1 Financial Decline but Maintains Positive Year-End Outlook

Segue Group Co., Ltd. reported a decline in its financial performance for the first quarter of the fiscal year ending December 31, 2025, with revenue dropping by 3.3% and profits falling significantly compared to the previous year. Despite the downturn, the company maintains a positive outlook for the full fiscal year, forecasting a 20.2% increase in revenue and a 75% rise in operating profit, indicating confidence in its long-term growth strategy.