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

• Market Cap: ¥22.15B
• Dividend Yield: 1.72%
• Average Volume (3M): 150.76K
• Price to Earnings (P/E): 25.8
• Beta (1Y): 1.18
• Revenue Growth: 26.24%
• EPS Growth: 29.73%
• Country: JP
• Employees: 709
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 17.20
• Shares Outstanding: 32,564,075
• 10 Day Avg. Volume: 268,970
• 30 Day Avg. Volume: 150,760
• PEG Ratio: -2.04
• Price to Book (P/B): 6.78
• Price to Sales (P/S): 1.10
• P/FCF Ratio: 12.95
• 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: 78 Outperform
• Price Target: ¥913.00 ▲(33.67% Upside)

Segue Group Co., Ltd. benefits from strong financial performance and technical indicators, driving a positive outlook. However, the high valuation suggests caution. The absence of earnings call and corporate events data means these factors do not influence the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, enhancing long-term business sustainability.

Cash Flow Improvement

Improved cash flow management enhances liquidity and financial stability, providing resources for reinvestment and growth.

Operational Efficiency

Stable margins indicate effective cost control and operational efficiency, supporting profitability and competitive positioning.

Negative Factors

Profit Margin Decline

Declining profit margins may indicate rising costs or pricing pressures, potentially impacting long-term profitability.

Increased Leverage

Increased leverage can strain financial flexibility, posing risks to stability and limiting growth opportunities.

Equity Ratio Decrease

A declining equity ratio suggests reduced financial resilience, potentially affecting the company's ability to withstand economic downturns.

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

Company Description

Segue Group Co.,Ltd. provides design, construction, operation, and maintenance services related to IT infrastructure and network security products in Japan. It offers distribution; system integration; voice network, LAN environment, and BX environment construction; help desk support; human resources consulting; and training and educational services, as well as computer network equipment, peripheral equipment, and communication equipment maintenance services. Segue Group Co.,Ltd. was incorporated in 2014 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Segue Group generates revenue through multiple streams, including software licensing fees, consulting services, and ongoing maintenance contracts. The company charges clients for the initial setup and customization of software solutions, which is often supplemented by recurring income from service agreements. Additionally, strategic partnerships with other tech firms and industry leaders allow Segue Group to expand its service offerings and reach new markets, further bolstering its revenue potential.

Segue Group Co., Ltd. Financial Statement Overview

Summary

Segue Group Co., Ltd. shows strong revenue growth and efficient operations, but profitability margins have faced pressure recently. The balance sheet reflects increased leverage, yet 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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.31B	18.72B	17.44B	13.62B	12.04B	10.99B
Gross Profit	5.02B	4.59B	4.12B	3.56B	3.09B	3.09B
EBITDA	1.48B	1.46B	1.23B	1.32B	877.56M	1.10B
Net Income	475.76M	507.69M	660.51M	743.32M	454.76M	634.16M
Balance Sheet
Total Assets	16.91B	13.63B	11.83B	11.25B	8.63B	7.19B
Cash, Cash Equivalents and Short-Term Investments	4.12B	4.07B	3.45B	3.11B	1.35B	1.73B
Total Debt	2.07B	2.31B	849.96M	1.13B	501.83M	9.86M
Total Liabilities	12.61B	10.44B	7.82B	7.57B	5.43B	4.02B
Stockholders Equity	4.15B	3.04B	4.00B	3.67B	3.20B	3.17B
Cash Flow
Free Cash Flow	396.00M	1.59B	1.28B	1.03B	-275.52M	65.93M
Operating Cash Flow	464.00M	1.76B	1.59B	1.13B	-151.11M	163.62M
Investing Cash Flow	-105.00M	-991.28M	-658.99M	84.18M	-254.92M	-401.66M
Financing Cash Flow	-386.00M	-335.04M	-669.10M	453.88M	17.11M	-216.03M

Segue Group Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 683.00
• 50DMA: Negative
• 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:3968, the sentiment is Neutral. The current price of 683 is below the 20-day moving average (MA) of 734.90, below the 50-day MA of 700.80, and above the 200-day MA of 579.35, indicating a neutral trend. The MACD of -7.18 indicates Positive momentum. The RSI at 46.13 is Neutral, neither overbought nor oversold. The STOCH value of 21.67 is Neutral, 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
2185	79 Outperform	¥22.61B	10.36	―	3.06%	-6.49%	4.98%
3968	78 Outperform	¥22.15B	25.76	―	1.72%	26.24%	29.73%
9799	77 Outperform	¥22.53B	17.32	―	2.43%	5.57%	12.08%
2335	71 Outperform	¥16.39B	14.51	―	3.60%	2.46%	-5.85%
3837	67 Neutral	¥29.13B	21.39	―	2.18%	9.56%	30.03%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6572	56 Neutral	¥19.27B	41.99	―	1.75%	13.47%	296.94%

Segue Group Co., Ltd. Corporate Events

Segue Group to Receive Dividends from Subsidiaries

Segue Group Co., Ltd. has announced that it will receive dividends totaling JPY 602,792 thousand from three of its consolidated subsidiaries. This dividend income will be recorded as operating revenue in the company’s non-consolidated financial statements for the fiscal year ending December 2025, but will not affect the consolidated financial results.

Segue Group Celebrates Anniversary with Employee Incentive

Segue Group Co., Ltd. has announced a special incentive payment to members of its Employee Shareholding Association in celebration of J’s Communication Co., Ltd.’s 30th anniversary. This initiative aims to boost employee engagement and participation in management, contributing to corporate value by increasing share ownership among employees. The impact on future business performance is expected to be minor.

Segue Group Reports Robust Financial Growth in 2025

Segue Group Co., Ltd. reported significant financial growth for the nine months ending September 30, 2025, with net sales increasing by 28.3% and operating profit surging by 125.7% year-on-year. The company’s strategic decisions, including a stock split and an absorption-type merger, have positively impacted its financial performance and market positioning, indicating a strong outlook for stakeholders.

Segue Group Co., Ltd. Sells Investment Securities to Boost Financial Position

Segue Group Co., Ltd. has announced the sale of a portion of its investment securities, realizing a gain of ¥140 million. This move is aimed at improving asset efficiency and strengthening the company’s financial position. The gain will be recorded as non-operating revenue in the third quarter of the fiscal year ending December 2025, with the full impact on the annual results still under review.