Shanon, Inc. (3976) AI Stock Analysis

• Market Cap: ¥2.32B
• Dividend Yield: N/A
• Average Volume (3M): 1.90K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.57
• Revenue Growth: -4.52%
• EPS Growth: 2.56%
• Country: JP
• Employees: 254
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.56
• Shares Outstanding: 5,926,200
• 10 Day Avg. Volume: 1,690
• 30 Day Avg. Volume: 1,900
• PEG Ratio: 0.16
• Price to Book (P/B): -24.50
• Price to Sales (P/S): 0.40
• P/FCF Ratio: 15.87
• 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: 54 Neutral
• Price Target: ¥414.00 ▲(7.81% Upside)

The overall stock score is primarily influenced by financial performance and technical analysis. Revenue growth and positive cash flow trends are encouraging, but profitability and financial stability issues weigh heavily. Technical indicators suggest stability, but valuation concerns due to negative earnings impact the score.

Positive Factors

Revenue Growth

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

Cash Flow Management

Strong cash flow management enhances financial stability, providing resources for reinvestment and debt reduction.

Gross Profit Margin

A strong gross profit margin suggests efficient cost management and pricing power, which can support future profitability.

Negative Factors

Profitability Challenges

Ongoing profitability issues may hinder long-term growth and investment capacity, requiring strategic cost management improvements.

Financial Stability

Negative equity raises concerns about financial stability, limiting the company's ability to weather economic downturns or invest in growth.

High Leverage

High leverage can increase financial risk, potentially impacting the company's ability to secure financing or manage interest obligations.

Shanon, Inc. Business Overview & Revenue Model

Company Description

Shanon, Inc. (3976) is a leading company in the technology sector, specializing in innovative software solutions and digital services. The company primarily focuses on developing enterprise software applications that enhance operational efficiency for businesses across various industries, including finance, healthcare, and manufacturing. In addition to software development, Shanon, Inc. offers consulting services to help organizations optimize their digital transformation strategies.

How the Company Makes Money

Shanon, Inc. generates revenue through multiple streams, including software licensing fees, subscription-based models for its cloud services, and professional consulting services. The company charges clients for one-time software purchases, as well as ongoing subscription fees for its cloud-based applications, which provide continuous updates and support. Additionally, Shanon, Inc. has established strategic partnerships with other tech firms, allowing it to expand its product offerings and reach new markets, further contributing to its earnings. The combination of direct sales, recurring subscription revenue, and partnerships enhances its overall financial performance.

Shanon, Inc. Financial Statement Overview

Summary

Shanon, Inc. shows revenue growth but struggles with profitability and financial stability. Strong gross profit margin indicates potential for operational improvement, yet high leverage and negative equity are significant risks. Positive cash flow trends are encouraging, suggesting a potential path to improvement if profitability can be achieved.

Income Statement

Shanon, Inc. has shown a positive revenue growth rate over the years, with the most recent year showing a 9.3% increase in revenue. However, the company has been struggling with profitability, as evidenced by negative net income and EBIT in recent years. Gross profit margin is relatively strong at around 60.2%, but the net profit margin remains negative. Improving operational efficiency and cost management could help enhance profitability.

Balance Sheet

The company's balance sheet shows significant leverage, with a negative stockholders' equity position, indicating that liabilities exceed assets. The debt-to-equity ratio cannot be calculated due to negative equity, which is a concern. Equity ratio is also negative, signaling potential financial instability. Improving equity through retained earnings or capital infusion is critical for financial health.

Cash Flow

Shanon, Inc. has shown improvement in cash flow management, with a positive free cash flow of 81.1 million JPY in the most recent year. The operating cash flow to net income ratio indicates stronger cash generation relative to net losses. Continued focus on cash flow generation and reducing capital expenditures can support financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.16B	3.21B	2.93B	2.46B	2.20B	1.79B
Gross Profit	1.95B	1.93B	1.83B	1.59B	1.37B	1.10B
EBITDA	58.66M	122.87M	-180.97M	-147.51M	193.94M	161.83M
Net Income	-164.79M	-101.61M	-445.67M	-365.86M	107.89M	56.29M
Balance Sheet
Total Assets	1.70B	2.17B	2.02B	1.84B	1.69B	1.32B
Cash, Cash Equivalents and Short-Term Investments	737.66M	763.13M	400.86M	264.18M	491.14M	438.71M
Total Debt	170.48M	1.39B	1.13B	744.58M	564.42M	454.74M
Total Liabilities	846.84M	2.22B	1.98B	1.56B	1.04B	790.64M
Stockholders Equity	851.98M	-52.54M	39.53M	285.41M	645.90M	533.34M
Cash Flow
Free Cash Flow	0.00	81.11M	-354.93M	-250.03M	-11.89M	104.24M
Operating Cash Flow	0.00	226.62M	-148.76M	-3.92M	183.72M	235.08M
Investing Cash Flow	0.00	-160.54M	-260.58M	-283.58M	-246.88M	-151.24M
Financing Cash Flow	0.00	295.04M	545.35M	57.51M	112.13M	177.03M

Shanon, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 384.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3976, the sentiment is Negative. The current price of 384 is below the 20-day moving average (MA) of 391.70, below the 50-day MA of 399.28, and below the 200-day MA of 389.62, indicating a bearish trend. The MACD of -4.87 indicates Positive momentum. The RSI at 43.82 is Neutral, neither overbought nor oversold. The STOCH value of 45.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3976.

Shanon, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3986	68 Neutral	¥2.13B	24.58	―	1.32%	-0.32%	-15.27%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3976	54 Neutral	¥2.32B	―	―	―	-4.52%	2.56%
4052	52 Neutral	¥1.87B	-48.50	―	―	-9.71%	-1076.54%
5577	52 Neutral	¥5.88B	-80.06	―	―	-4.84%	-161.59%
4424	51 Neutral	¥4.63B	―	―	―	-20.74%	36.84%
4166	39 Underperform	¥1.92B	-11.20	―	―	12.27%	73.45%