bBreak Systems Co. Ltd. (3986) AI Stock Analysis

• Market Cap: ¥2.13B
• Dividend Yield: 1.32%
• Average Volume (3M): 2.03K
• Price to Earnings (P/E): 24.6
• Beta (1Y): 0.34
• Revenue Growth: -0.32%
• EPS Growth: -15.27%
• Country: JP
• Employees: 148
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 5.17
• Shares Outstanding: 1,536,960
• 10 Day Avg. Volume: 2,860
• 30 Day Avg. Volume: 2,033
• PEG Ratio: -0.71
• Price to Book (P/B): 1.24
• Price to Sales (P/S): 1.54
• P/FCF Ratio: 18.46
• 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: 68 Neutral
• Price Target: ―

bBreak Systems Co. Ltd. exhibits solid financial performance with strong profitability and a robust balance sheet. However, cash flow management issues need addressing. Technical analysis reflects a stable short-term position but potential resistance in the longer term. The valuation highlights a potentially high P/E ratio, suggesting caution for value-focused investors. Overall, the company is stable but faces challenges in cash flow and valuation.

Positive Factors

Strong Balance Sheet

A strong balance sheet with zero debt provides financial stability and flexibility, allowing the company to invest in growth opportunities without the burden of debt servicing.

Profitability

Consistent profitability with stable margins indicates efficient operations and the ability to generate sustainable earnings, supporting long-term business growth.

Operational Efficiency

A robust EBITDA margin reflects effective cost management and operational efficiency, enhancing the company's ability to maintain profitability even in challenging market conditions.

Negative Factors

Cash Flow Management

Inadequate cash flow management can hinder the company's ability to fund operations and invest in growth, posing a risk to financial stability and operational continuity.

Revenue Growth Challenges

Negative revenue growth indicates potential market challenges or competitive pressures, which could impact the company's ability to expand its market share and sustain long-term growth.

EBIT Margin Decline

A decline in EBIT margin suggests operational challenges that may affect profitability. Addressing these issues is crucial for maintaining financial health and competitive positioning.

bBreak Systems Co. Ltd. Business Overview & Revenue Model

Company Description

bBreak Systems Co. Ltd. (3986) is a Japanese company that specializes in providing comprehensive software solutions, particularly focusing on enterprise resource planning (ERP) systems. The company caters to a variety of industries, offering products and services aimed at optimizing business processes, enhancing operational efficiency, and facilitating digital transformation. Its portfolio includes software development, implementation services, and ongoing support, which are designed to help businesses effectively manage their resources and information technology infrastructure.

How the Company Makes Money

bBreak Systems Co. Ltd. generates revenue primarily through the sale and licensing of its ERP software solutions. The company offers customized software packages tailored to the specific needs of different industries, which clients purchase or license for use within their organizations. Additionally, bBreak Systems Co. Ltd. earns income from providing professional services such as consulting, system integration, and ongoing technical support to ensure the effective deployment and utilization of its software solutions. The company may also engage in strategic partnerships with other technology providers to expand its market reach and enhance its product offerings, contributing to its overall revenue.

bBreak Systems Co. Ltd. Financial Statement Overview

Summary

bBreak Systems Co. Ltd. is financially sound, with strong profitability and a robust balance sheet, characterized by zero debt and high equity. While the income statement reflects good revenue growth and profitability, cash flow management needs attention due to unusual zero values in the latest period. Overall, the company is well-positioned in the Software - Application industry but should improve cash flow reliability.

Income Statement

bBreak Systems Co. Ltd. demonstrates solid profitability with a stable gross profit margin and a healthy net profit margin. The company shows a consistent revenue growth trend, with a 3.3% increase from 2023 to TTM (Trailing-Twelve-Months). However, there was a slight dip in EBIT margin in the TTM period, suggesting some operational challenges. EBITDA margin remains robust, indicating strong operational efficiency.

Balance Sheet

The balance sheet is strong, with zero debt, resulting in an excellent debt-to-equity ratio. The equity ratio is high, reflecting a solid capital structure. Return on Equity (ROE) is impressive, indicating effective utilization of shareholders' equity to generate profits. The company's financial position is very stable, reducing risk.

Cash Flow

Cash flow metrics indicate a stable financial position, although there is room for improvement. Operating cash flow to net income ratio is not calculable in the TTM period due to zero operating cash flow, which is unusual for a software company. There is a strong historical free cash flow, but the recent period shows zero free cash flow, which needs to be addressed.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.38B	1.38B	1.39B	1.38B	1.26B	1.17B
Gross Profit	637.39M	643.69M	659.89M	636.88M	587.90M	533.46M
EBITDA	103.08M	121.82M	192.83M	176.41M	154.91M	122.51M
Net Income	75.74M	91.84M	136.45M	136.17M	116.75M	91.50M
Balance Sheet
Total Assets	2.30B	2.29B	2.23B	2.02B	1.88B	1.72B
Cash, Cash Equivalents and Short-Term Investments	1.97B	2.00B	1.92B	1.73B	1.66B	1.48B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	608.14M	577.81M	582.74M	495.98M	448.96M	385.77M
Stockholders Equity	1.69B	1.71B	1.65B	1.53B	1.43B	1.33B
Cash Flow
Free Cash Flow	0.00	114.88M	176.75M	159.96M	194.97M	112.77M
Operating Cash Flow	0.00	114.88M	239.85M	159.96M	194.97M	112.77M
Investing Cash Flow	0.00	-1.49B	-38.93M	-41.51M	-1.00K	-5.00K
Financing Cash Flow	0.00	-22.78M	-18.22M	-42.20M	-18.48M	-18.53M

bBreak Systems Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1318.00
• 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:3986, the sentiment is Negative. The current price of 1318 is below the 20-day moving average (MA) of 1414.45, below the 50-day MA of 1462.90, and below the 200-day MA of 1426.03, indicating a bearish trend. The MACD of -16.35 indicates Positive momentum. The RSI at 31.93 is Neutral, neither overbought nor oversold. The STOCH value of 6.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3986.

bBreak Systems Co. Ltd. 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%