Needs Well, Inc. (3992) AI Stock Analysis

• Market Cap: ¥21.85B
• Dividend Yield: 1.66%
• Average Volume (3M): 532.93K
• Price to Earnings (P/E): 26.0
• Beta (1Y): 1.24
• Revenue Growth: 3.71%
• EPS Growth: -14.56%
• Country: JP
• Employees: 616
• Sector: Technology
• Sector Strength: 82
• Industry: Software - Infrastructure
• EPS (TTM): 7.01
• Shares Outstanding: 40,699,200
• 10 Day Avg. Volume: 785,030
• 30 Day Avg. Volume: 532,926
• PEG Ratio: 1.41
• Price to Book (P/B): 1.51
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 33.93
• 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: 76 Outperform
• Price Target: ¥631.00 ▲(16.64%Upside)

Needs Well, Inc. showcases strong financial health, particularly in growth and profitability, supported by an excellent balance sheet. However, cash flow issues warrant attention. The technical indicators suggest strong momentum but caution due to potential overbought conditions. Valuation is high, which may limit immediate upside in the stock price.

Needs Well, Inc. Business Overview & Revenue Model

Company Description

Needs Well, Inc. (3992) is a Japanese company that operates in the IT services sector. The company specializes in providing comprehensive business solutions, including system integration, software development, and IT consulting services. It caters to a wide range of industries, offering tailored IT services designed to improve operational efficiency and drive innovation.

How the Company Makes Money

Needs Well, Inc. generates revenue primarily through its IT services, which include system integration, custom software development, and consulting. The company partners with various industries such as finance, telecommunications, and manufacturing to develop bespoke IT solutions that meet specific business needs. It earns money by contracting out its services to these industries, often engaging in long-term projects or recurring service agreements. The value-added services offered by Needs Well, Inc., such as maintenance and support, also contribute to its revenue streams.

Needs Well, Inc. Financial Statement Overview

Summary

Strong revenue growth and profitability with robust margins. Excellent balance sheet with minimal leverage risk. However, current cash flow challenges need monitoring.

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	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
9.67B	9.55B	8.76B	6.73B	5.75B	5.36B
	Gross Profit
2.19B	2.16B	2.08B	1.56B	1.41B	1.28B
	EBIT
1.19B	1.19B	1.10B	690.79M	580.37M	492.93M
	EBITDA
1.34B	1.35B	1.28B	764.80M	608.29M	528.89M
	Net Income Common Stockholders
783.05M	809.95M	837.30M	499.15M	421.10M	347.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.67B	2.10B	2.52B	2.61B	2.87B	1.78B
	Total Assets
5.52B	5.65B	5.95B	4.61B	4.36B	3.00B
	Total Debt
36.28M	38.04M	57.52M	0.00	0.00	0.00
	Net Debt
-1.63B	-2.06B	-2.46B	-2.61B	-2.87B	-1.78B
	Total Liabilities
1.37B	1.42B	2.23B	1.04B	861.31M	765.74M
	Stockholders Equity
4.14B	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: 541.00
• 50DMA: Positive
• 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:3992, the sentiment is Positive. The current price of 541 is above the 20-day moving average (MA) of 527.85, above the 50-day MA of 466.48, and above the 200-day MA of 375.62, indicating a bullish trend. The MACD of 21.44 indicates Positive momentum. The RSI at 61.91 is Neutral, neither overbought nor oversold. The STOCH value of 40.01 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
4493	77 Outperform	¥19.64B	35.77		0.15%	24.15%	-7.80%
3992	76 Outperform	¥21.85B	26.01		1.66%	3.71%	-14.56%
3741	71 Outperform	¥26.40B	19.58		1.98%	20.63%	21.52%
3914	64 Neutral	¥18.66B	45.97		―	5.32%	-19.27%
5132	64 Neutral	¥26.72B	88.62		―	37.63%	184.40%
Sector *	62 Neutral	$11.92B	10.48	-7.50%	2.95%	7.40%	-8.18%

Needs Well, Inc. Corporate Events

Needs Well Inc. Amends Shareholder Benefit Program to Boost Market Position

Needs Well Inc. has announced an amendment to its shareholder benefit program, adding a new record date to increase the attractiveness of its shares and meet the Tokyo Stock Exchange Prime Market’s Continued Listing Criteria. This strategic move is part of ‘Operation 6.600,’ aiming to achieve a share price target of 600 yen by June 2025, thereby enhancing shareholder value and engagement.

Needs Well Inc. Forms Strategic AI Alliance with Hmcomm Inc.

Needs Well Inc. has announced a strategic business alliance with Hmcomm Inc. to integrate their AI technologies, aiming to secure a competitive advantage. This partnership will combine Hmcomm’s expertise in ‘sound x AI’ with Needs Well’s data analysis capabilities to create joint solutions and expand business opportunities. The alliance is expected to enhance both companies’ performance and corporate value in the medium to long term, although its immediate impact on the current fiscal year is minimal.

Needs Well Inc. Reports Strong Financial Results for Parent Company ODC Co., Ltd.

Needs Well Inc. announced the finalized financial results for its unlisted parent company, ODC Co., Ltd., for the fiscal year ending February 28, 2025. ODC Co., Ltd., primarily involved in the management of securities, reported a net profit of 122,704,923 yen, with significant contributions from interest income and gains on securities. The announcement highlights a strong financial performance, which may positively impact Needs Well Inc.’s market positioning and stakeholder confidence.

Needs Well Inc. Reports Modest Growth Amidst Profit Decline

Needs Well Inc. reported its consolidated financial results for the six months ending March 31, 2025, showing a modest increase in net sales and operating profit compared to the previous year. However, the profit attributable to owners of the parent decreased by 3.6%, reflecting a challenging market environment. The company maintains a strong equity ratio, and its financial forecast for the fiscal year ending September 30, 2025, anticipates continued growth in net sales and profits, indicating a positive outlook despite recent profit declines.

Needs Well Inc. Launches Shareholder Benefit Program to Boost Market Position

Needs Well Inc. has announced the introduction of a shareholder benefit program as part of its strategy to meet the Tokyo Stock Exchange Prime Market’s Continued Listing Criteria. The program aims to enhance the attractiveness of investing in the company’s shares by offering QUO cards to shareholders holding 1,000 or more shares. This initiative is part of ‘Operation 6.600,’ which targets a share price of 600 yen by June 2025, aiming to increase shareholder engagement and understanding of the company’s business.