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

• Market Cap: ¥9.67B
• Dividend Yield: 0.67%
• Average Volume (3M): 70.54K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.87
• Revenue Growth: 15.05%
• EPS Growth: 89.12%
• Country: JP
• Employees: 254
• Sector: Technology
• Sector Strength: 92
• Industry: Information Technology Services
• EPS (TTM): 8.66
• Shares Outstanding: 3,901,800
• 10 Day Avg. Volume: 197,890
• 30 Day Avg. Volume: 70,540
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥3,113.00
• Price Target Upside: 4.50% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 58 Neutral
• Price Target: ¥3,390.00 ▲(13.80% Upside)

The stock's overall score is driven by strong technical momentum, which is the most significant positive factor. However, this is offset by weak financial performance and poor valuation metrics, particularly the negative P/E ratio and low dividend yield.

TRADE WORKS Co.,Ltd Business Overview & Revenue Model

Company Description

TRADE WORKS Co.,Ltd (3997) is a company engaged in the development and provision of various IT solutions and services. Operating within the technology sector, the company focuses on delivering software products and services that enhance business processes and operations for its clients. Its offerings may include custom software development, IT consulting, and other related services to support digital transformation initiatives.

How the Company Makes Money

TRADE WORKS Co.,Ltd generates revenue primarily through the sale of its software solutions and IT services. Key revenue streams include custom software development projects, where the company collaborates with clients to create tailored solutions addressing specific business needs. Additionally, TRADE WORKS may offer IT consulting services, helping businesses optimize their technology infrastructure and strategies. The company may also engage in partnerships with other technology firms to expand its service offerings and reach a broader client base. These collaborations can contribute to its earnings by leveraging shared expertise and resources.

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 negative net income and free cash flow raise concerns about long-term financial sustainability, despite moderate leverage.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.59B	3.75B	3.27B	2.55B	2.11B
Gross Profit	786.15M	753.00M	832.23M	699.74M	507.24M
EBITDA	83.77M	171.00M	415.48M	374.67M	180.61M
Net Income	-151.69M	-53.00M	200.30M	189.97M	73.31M
Balance Sheet
Total Assets	2.90B	3.04B	2.18B	2.10B	1.81B
Cash, Cash Equivalents and Short-Term Investments	804.14M	615.00M	688.29M	802.55M	836.00M
Total Debt	848.00M	585.00M	9.69M	0.00	0.00
Total Liabilities	1.63B	1.66B	715.46M	392.78M	278.54M
Stockholders Equity	1.28B	1.39B	1.46B	1.71B	1.53B
Cash Flow
Free Cash Flow	-13.00M	-217.00M	390.02M	24.21M	423.11M
Operating Cash Flow	278.45M	-207.00M	399.77M	53.23M	477.78M
Investing Cash Flow	-397.30M	-404.75M	-252.60M	-78.58M	-54.84M
Financing Cash Flow	307.94M	514.00M	-261.42M	-8.10M	-9.21M

TRADE WORKS Co.,Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2979.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3997, the sentiment is Positive. The current price of 2979 is above the 20-day moving average (MA) of 1545.30, above the 50-day MA of 1389.76, and above the 200-day MA of 1309.27, indicating a bullish trend. The MACD of 293.35 indicates Negative momentum. The RSI at 97.15 is Negative, neither overbought nor oversold. The STOCH value of 93.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
3839	77 Outperform	¥4.97B	20.70		1.65%	7.78%	1.78%
3920	74 Outperform	¥5.00B	12.25		1.10%	7.38%	515.19%
4076	72 Outperform	¥4.29B	10.04		5.08%	5.23%	-7.37%
6942	65 Neutral	¥5.55B	52.37		―	-5.20%	133.74%
3997	58 Neutral	¥9.67B	―		0.67%	15.05%	89.12%
2375	50 Neutral	¥4.90B	―		0.41%	-9.76%	3.53%
Sector *	49 Neutral	C$3.38B	0.24	-4.75%	7.64%	9.15%	-16.14%