Needs Well, Inc. (3992) AI Stock Analysis

• Market Cap: ¥24.24B
• Dividend Yield: 2%
• Average Volume (3M): 582.32K
• Price to Earnings (P/E): 29.3
• Beta (1Y): 1.16
• Revenue Growth: 2.06%
• EPS Growth: -16.53%
• Country: JP
• Employees: 616
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 3.65
• Shares Outstanding: 40,699,200
• 10 Day Avg. Volume: 538,380
• 30 Day Avg. Volume: 582,320
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥657.00
• Price Target Upside: 9.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 75 Outperform
• Price Target: ¥657.00 ▲(9.50% Upside)

The overall stock score of 75 reflects strong financial performance and positive technical indicators, tempered by a high valuation. The company's robust revenue growth and low leverage are significant strengths, but the high P/E ratio and potential cash flow challenges warrant caution.

Needs Well, Inc. Business Overview & Revenue Model

Company Description

Needs Well Inc. engages in the IT service business in Japan. It provides NW Security Police, an in-house information security solution, which prevents unauthorized connection; okta, an integrated authentication service, that manages single sign-on, ID management, access control, etc. on cloud; VOTIRO Disarmer, an email or file sanitization solution; Symantec Web Isolation solutions; MobiControl, a mobile security and device management solutions; and SmartWMS, a warehouse management system. The company also offers IT reengineering services, an in-house system operation improvement consulting and data linkage system construction; WinActor, a business automation robot; SAP Concur, a cloud system for business trip, expense management, and invoice management; HotProfile, a business card management and sales tools; Work AI service, a business AI service; DX Suite, which converts various documents into data; and Speak Analyzer that visualizes communication in various business scenarios, and supports education and bottom-up measures for corporate employees. In addition, it provides system development tools comprising Web performer, a low-code development platform that automatically generates web applications without programming; and 2025 Solutions, an DX promotion solution for financial systems. Needs Well Inc. was incorporated in 1986 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Needs Well, Inc. generates revenue through its diverse portfolio of IT services and solutions. The company's primary revenue streams include fees for system integration projects, custom software development, and IT infrastructure management services. Additionally, the company earns income from consulting services, where it advises businesses on optimizing their IT strategies and implementing technology-driven changes. Needs Well, Inc. may also form strategic partnerships with technology providers to enhance its service offerings, which can contribute to its revenue growth. By focusing on sectors such as finance, manufacturing, and telecommunications, the company aligns its offerings with industries that have a consistent demand for advanced IT solutions, thereby ensuring a steady flow of income.

Needs Well, Inc. Financial Statement Overview

Summary

Needs Well, Inc. demonstrates strong financial health with robust revenue and profit margins, low leverage, and high equity. The income statement and balance sheet indicate a well-managed and growing company. However, the current cash flow situation needs careful monitoring to ensure liquidity does not become a constraint.

Income Statement

Strong revenue growth with a 43.6% increase from 2022 to 2023, and a continued rise to 2024. The TTM gross profit margin stands at 22.6%, with a net profit margin of 8.1%, indicating healthy profitability. EBIT and EBITDA margins are robust at 12.3% and 9.9% respectively, showcasing efficient operational management.

Balance Sheet

The company maintains a solid equity base with a high equity ratio of 75% in the TTM period. The debt-to-equity ratio is extremely low at 0.0088, indicating minimal leverage risk and strong financial stability. Return on Equity is impressive at 18.9%, reflecting effective utilization of equity capital.

Cash Flow

Operating cash flow is zero in the TTM period, indicating potential short-term cash challenges. However, historical free cash flow was positive with 401.9 million in 2023. Free cash flow to net income ratio was 49.6% in 2023, showing reasonable cash conversion. The absence of current period free cash flow data limits a comprehensive analysis.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.76B	9.55B	8.76B	6.73B	5.75B	5.36B
Gross Profit	2.22B	2.16B	2.08B	1.56B	1.41B	1.28B
EBITDA	1.38B	1.35B	1.28B	764.80M	608.29M	528.89M
Net Income	790.46M	809.95M	837.30M	499.15M	421.10M	347.98M
Balance Sheet
Total Assets	5.94B	5.65B	5.95B	4.61B	4.36B	3.00B
Cash, Cash Equivalents and Short-Term Investments	2.14B	2.10B	2.52B	2.61B	2.87B	1.78B
Total Debt	34.17M	38.04M	57.52M	0.00	0.00	0.00
Total Liabilities	1.51B	1.42B	2.23B	1.04B	861.31M	765.74M
Stockholders Equity	4.42B	4.22B	3.71B	3.57B	3.50B	2.23B
Cash Flow
Free Cash Flow	0.00	401.90M	946.58M	401.20M	285.38M	402.83M
Operating Cash Flow	0.00	447.46M	978.79M	437.00M	331.42M	431.81M
Investing Cash Flow	0.00	-294.88M	-352.90M	-260.64M	-81.03M	-87.57M
Financing Cash Flow	0.00	-477.80M	-721.00M	-433.34M	838.16M	-112.68M

Needs Well, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 600.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3992, the sentiment is Positive. The current price of 600 is above the 20-day moving average (MA) of 570.75, above the 50-day MA of 549.66, and above the 200-day MA of 461.00, indicating a bullish trend. The MACD of 18.68 indicates Negative momentum. The RSI at 61.00 is Neutral, neither overbought nor oversold. The STOCH value of 69.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3992.

Needs Well, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3992	75 Outperform	¥24.24B	29.33	―	2.00%	2.06%	-16.53%
4493	73 Outperform	¥17.70B	32.52	33.70%	0.17%	28.56%	-13.56%
3741	68 Neutral	¥24.87B	9.51	14.40%	2.10%	17.22%	10.53%
3914	67 Neutral	¥16.41B	44.44	15.18%	―	3.19%	-29.94%
5132	64 Neutral	¥30.37B	97.86	―	―	30.06%	125.31%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Needs Well, Inc. Corporate Events

Needs Well, Inc. Maintains Prime Market Listing Status

Needs Well, Inc. announced that its estimated free-float market capitalization is expected to exceed ¥10 billion, meeting the criteria to maintain its listing on the Tokyo Stock Exchange Prime Market. This development underscores the company’s stable market position and potential for continued growth, which is crucial for investors and stakeholders monitoring its financial health and market performance.

The most recent analyst rating on (JP:3992) stock is a Buy with a Yen598.00 price target. To see the full list of analyst forecasts on Needs Well, Inc. stock, see the JP:3992 Stock Forecast page.

Needs Well Inc. Forms Capital and Business Alliance with Hmcomm Inc.

Needs Well Inc. has announced a transition of its business alliance with Hmcomm Inc. to a capital and business alliance, aiming to strengthen their long-term cooperative relationship. This strategic move involves mutual share acquisition, with Needs Well acquiring Hmcomm’s common stock and Hmcomm receiving treasury shares from Needs Well, enhancing their collaborative efforts in AI and IT solutions. The alliance is expected to contribute to the medium- to long-term improvement of both companies’ performance and corporate value, though its immediate impact on the current fiscal year is minimal.

Needs Well Inc. Reports Steady Growth and Positive Outlook for 2025

Needs Well Inc. reported its consolidated financial results for the nine months ending June 30, 2025, showing a modest increase in net sales by 3% compared to the previous year. Despite a slight decrease in profit attributable to owners of the parent by 5.1%, the company maintains a strong equity ratio of 75.4%, indicating stable financial health. The company forecasts a significant improvement in its full-year financial results, with expectations of an 11% increase in net sales and a 28.8% rise in profit attributable to owners of the parent, reflecting a positive outlook for the fiscal year ending September 30, 2025.

Needs Well Inc. Revises Financial Forecast Upward for FY 2025

Needs Well Inc. has announced an upward revision of its consolidated financial results forecast for the fiscal year ending September 30, 2025. This revision is attributed to expected extraordinary gains from the divestment of investment securities, as part of its strategic initiatives involving Ascentech K.K. and ITFOR Inc. The revised forecast indicates a significant increase in profit attributable to owners of the parent, reflecting a positive impact on the company’s financial performance and positioning in the market.

Needs Well Inc. Launches ‘Value Creation 700’ Initiative to Boost Stock Price and Market Position

Needs Well Inc. has launched ‘Value Creation 700,’ a corporate initiative aimed at achieving a stock price of ¥700 and meeting Prime Market listing standards by the fiscal year ending September 2026. The company plans to drive growth through strategic investments in AI, cloud technologies, and IT outsourcing, while also focusing on expanding its talent base and fostering innovation to maintain a competitive edge in the market.

Needs Well Inc. Reports on ‘Operation 6.600’ and Future Strategies

Needs Well Inc. announced the results of its ‘Operation 6.600,’ which aimed to achieve a stock price target of ¥600 to maintain its Prime Market listing status. Although the target was not met, with the stock closing at ¥506, the company made significant progress in its focus areas, including AI solutions, migration development, and IT outsourcing, which saw substantial sales growth. The company remains committed to enhancing corporate value and plans to strengthen its management foundation and invest in new business strategies.

Needs Well Inc. Transitions to Strategic Business Alliance with ITFOR Inc.

Needs Well Inc. has announced the termination of its capital and business alliance with ITFOR Inc., transitioning to a more flexible business alliance to enhance corporate value and stock market liquidity. This strategic move is expected to result in a gain on sale of investment securities, depending on the stock price at the time of sale, with an estimated gain of approximately 85 million yen if sold at the recent closing price.

Needs Well Inc. Transitions to Business Alliance with Ascentech K.K.

Needs Well Inc. has announced its participation in a tender offer for Ascentech K.K., transitioning from a capital and business alliance to a business alliance. This move follows Ascentech’s support for the tender offer by OPI 18 Corporation. The company expects to record an extraordinary income gain of approximately ¥64 million from the sale of investment securities, indicating a positive impact on its financial results for the fiscal year ending September 30, 2025.

Needs Well Inc. Announces Leadership Change

Needs Well Inc. has announced a change in its executive leadership, with Kozo Funatsu stepping down as President and CEO due to health concerns, while remaining as Chairman of the Board. Hajime Matsuoka will take over as the new President and CEO, aiming to strengthen the company’s management foundation and drive medium- to long-term business growth.