TRADE WORKS Co.,Ltd (3997) AI Stock Analysis

• Market Cap: ¥10.30B
• Dividend Yield: 0.68%
• Average Volume (3M): 1.17M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.83
• Revenue Growth: 15.05%
• EPS Growth: 89.12%
• Country: JP
• Employees: 254
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.87
• Shares Outstanding: 39,032,400
• 10 Day Avg. Volume: 994,900
• 30 Day Avg. Volume: 1,173,070
• PEG Ratio: -0.17
• Price to Book (P/B): 3.61
• Price to Sales (P/S): 1.00
• P/FCF Ratio: -358.39
• 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

• Rating: 46 Neutral
• Price Target: ¥267.00 ▼(-1.84% Downside)

The overall stock score is primarily influenced by financial performance and technical analysis. The company's strong revenue growth is overshadowed by profitability and cash flow challenges. Technical indicators suggest a bearish trend with potential for a short-term rebound. Valuation concerns due to negative earnings further impact the score.

TRADE WORKS Co.,Ltd Business Overview & Revenue Model

Company Description

TRADE WORKS Co., Ltd (3997) is a diversified company specializing in trade and logistics services across various sectors. The company focuses on facilitating international trade by providing comprehensive solutions including supply chain management, import and export services, and consultancy for businesses looking to expand their market reach. TRADE WORKS also engages in the distribution of goods, leveraging its extensive network to enhance efficiency and reduce costs for its clients.

How the Company Makes Money

TRADE WORKS Co., Ltd generates revenue primarily through its logistics and trade services, which encompass a range of activities including freight forwarding, customs brokerage, and warehousing. The company earns fees for each transaction processed and may also charge for additional services such as inventory management and shipping consultations. Key revenue streams include long-term contracts with businesses needing regular import/export services, one-time service fees for ad-hoc logistics needs, and commissions from partnerships with other trade-related companies. Additionally, TRADE WORKS may benefit from strategic alliances with shipping companies and local distributors that enhance its service offerings and expand its market presence.

TRADE WORKS Co.,Ltd Financial Statement Overview

Summary

TRADE WORKS Co., Ltd shows strong revenue growth but struggles with profitability and cash flow management. The balance sheet reflects moderate leverage, but negative net income and free cash flow raise concerns about long-term financial sustainability. The company needs to improve operational efficiency and maintain cash reserves to support growth and stability.

Income Statement

The company has experienced a significant revenue growth from 2023 to 2024, with a revenue growth rate of 22.33%. However, profitability metrics are concerning, with a negative net profit margin of -3.29% for 2024 due to negative net income, and a negative EBIT margin of -1.20%. Despite positive EBITDA margin of 2.72%, the declining profitability raises concerns about operational efficiency and cost management.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.66, indicating a manageable level of debt. The equity ratio stands at 44.00%, reflecting a solid equity base relative to total assets. However, the decline in stockholders' equity from 2023 to 2024 is a potential concern, indicating challenges in retaining earnings. Overall, the balance sheet reflects moderate financial stability.

Cash Flow

Cash flow analysis reveals a concerning decline in free cash flow, which remains negative at -13 million JPY in 2024. The operating cash flow to net income ratio is positive at 1.84, suggesting that operating activities are generating cash, but the negative free cash flow growth rate and high capital expenditure could strain liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.70B	4.59B	3.75B	3.27B	2.55B	2.11B
Gross Profit	953.58M	786.15M	753.00M	832.23M	699.74M	507.24M
EBITDA	253.06M	83.77M	83.43M	415.48M	374.67M	180.61M
Net Income	-26.56M	-151.69M	-53.00M	200.30M	189.97M	73.31M
Balance Sheet
Total Assets	3.72B	2.90B	3.04B	2.18B	2.10B	1.81B
Cash, Cash Equivalents and Short-Term Investments	635.54M	804.14M	615.00M	688.29M	802.55M	836.00M
Total Debt	1.17B	848.00M	585.00M	9.69M	0.00	0.00
Total Liabilities	2.04B	1.63B	1.66B	715.46M	392.78M	278.54M
Stockholders Equity	1.68B	1.28B	1.39B	1.46B	1.71B	1.53B
Cash Flow
Free Cash Flow	0.00	-12.87M	-217.00M	390.02M	24.21M	423.11M
Operating Cash Flow	0.00	278.45M	-207.00M	399.77M	53.23M	477.78M
Investing Cash Flow	0.00	-397.30M	-404.75M	-252.60M	-78.58M	-54.84M
Financing Cash Flow	0.00	307.94M	514.00M	-261.42M	-8.10M	-9.21M

TRADE WORKS Co.,Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 272.00
• 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:3997, the sentiment is Negative. The current price of 272 is below the 20-day moving average (MA) of 296.80, below the 50-day MA of 286.77, and above the 200-day MA of 169.58, indicating a neutral trend. The MACD of -8.55 indicates Positive momentum. The RSI at 44.59 is Neutral, neither overbought nor oversold. The STOCH value of 50.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3997.

TRADE WORKS Co.,Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4076	80 Outperform	¥4.94B	9.35	―	4.41%	8.71%	23.46%
3920	79 Outperform	¥5.56B	13.63	―	1.19%	7.38%	515.19%
3839	76 Outperform	¥5.08B	21.18	―	1.61%	7.78%	1.78%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6942	57 Neutral	¥5.57B	52.11	―	―	-5.20%	133.74%
3997	46 Neutral	¥10.30B	―	―	0.68%	15.05%	89.12%
2375	44 Neutral	¥4.76B	―	―	0.43%	-11.66%	-137.22%