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

• Market Cap: ¥16.77B
• Dividend Yield: 2.13%
• Average Volume (3M): 56.91K
• Price to Earnings (P/E): 151.5
• Beta (1Y): 0.99
• Revenue Growth: 4.02%
• EPS Growth: -87.61%
• Country: JP
• Employees: 709
• Sector: Technology
• Sector Strength: 83
• Industry: Information Technology Services
• EPS (TTM): 4.44
• Shares Outstanding: 32,564,075
• 10 Day Avg. Volume: 31,560
• 30 Day Avg. Volume: 56,906
• PEG Ratio: -1.34
• Price to Book (P/B): 5.71
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: 70 Neutral
• Price Target: ¥559.00 ▲(8.12%Upside)

The overall stock score reflects strong financial performance driven by revenue growth and improved cash flows. However, high leverage and declining profit margins are concerns. The technical analysis indicates a mixed trend, with some bullish momentum but overall bearish sentiment. The valuation score is low due to a high P/E ratio, suggesting the stock might be overvalued despite a decent dividend yield.

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. shows strong revenue growth and operational efficiency. However, declining net profit margins and increased leverage pose challenges. Improved cash flow indicates good cash management, but capital allocation needs optimization.

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
	EBIT
720.21M	1.09B	906.27M	638.71M	843.62M
	EBITDA
1.46B	1.23B	1.32B	877.56M	1.10B
	Net Income Common Stockholders
507.69M	660.51M	743.32M	454.76M	634.16M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.07B	3.45B	3.11B	1.35B	1.73B
	Total Assets
13.63B	11.83B	11.25B	8.63B	7.19B
	Total Debt
2.31B	849.96M	1.13B	501.83M	9.86M
	Net Debt
-1.60B	-2.51B	-1.86B	-850.07M	-1.72B
	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: Positive
• Last Price: 517.00
• 50DMA: Positive
• 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:3968, the sentiment is Positive. The current price of 517 is above the 20-day moving average (MA) of 510.75, above the 50-day MA of 497.30, and below the 200-day MA of 568.28, indicating a neutral trend. The MACD of 3.43 indicates Negative momentum. The RSI at 57.42 is Neutral, neither overbought nor oversold. The STOCH value of 72.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	¥15.66B	12.67		3.77%	1.83%	19.05%
9799	79 Outperform	¥17.43B	14.21		2.94%	6.99%	11.02%
2185	74 Outperform	¥19.39B	9.17		4.66%	4.16%	36.43%
3968	70 Neutral	¥16.77B	151.52		2.13%	4.02%	-87.61%
6572	68 Neutral	¥19.14B	42.80		1.80%	17.17%	160.84%
3837	67 Neutral	¥19.07B	16.29		2.80%	11.03%	14.63%
Sector *	62 Neutral	$11.80B	10.37	-7.29%	2.91%	7.39%	-7.96%

Segue Group Co., Ltd. Corporate Events

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.