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

• Market Cap: ¥11.28B
• Dividend Yield: 0.69%
• Average Volume (3M): 2.32M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.75
• 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: 39,027,000
• 10 Day Avg. Volume: 907,970
• 30 Day Avg. Volume: 2,323,390
• 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: ¥3,397.00
• Price Target Upside: 1075.43% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 54 Neutral
• Price Target: ¥3,397.00 ▲(1075.43% Upside)

The overall stock score of 54 reflects a mix of strong technical momentum and significant financial challenges. While the stock shows bullish trends, the negative profitability and cash flow issues, along with a concerning valuation, suggest caution. Investors should be aware of the potential risks associated with the company's financial health and valuation.

TRADE WORKS Co.,Ltd Business Overview & Revenue Model

Company Description

TRADE WORKS Co., Ltd. provides solutions for front system exchange connection system and unfair transaction monitoring system for securities, forex margin trading (FX), and commodity futures industry. It offers TradeAgent, an Internet stock exchange system that supports various trading tools for online trading of various financial products in the securities, FX, and commodity futures fields; Dealing Athena, a solution that supports transactions and revenue management by persons in charge of self-sales department, as well as provides functions for administrators who manage transactions of each person in charge; Mars, an exchange trading terminal solution that supports securities trading; and MarsWeb, an exchange and information provider connection gateway. The company also provides MTS, an unfair trade monitoring system; and security diagnostic services. TRADE WORKS Co., Ltd. was founded in 1999 and is based in Tokyo, Japan.

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 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	4.42B	4.59B	3.75B	3.27B	2.55B	2.11B
Gross Profit	761.26M	786.15M	753.00M	832.23M	699.74M	507.24M
EBITDA	84.92M	83.77M	83.43M	415.48M	374.67M	180.61M
Net Income	-143.38M	-151.69M	-53.00M	200.30M	189.97M	73.31M
Balance Sheet
Total Assets	3.79B	2.90B	3.04B	2.18B	2.10B	1.81B
Cash, Cash Equivalents and Short-Term Investments	1.09B	804.14M	615.00M	688.29M	802.55M	836.00M
Total Debt	1.11B	848.00M	585.00M	9.69M	0.00	0.00
Total Liabilities	2.14B	1.63B	1.66B	715.46M	392.78M	278.54M
Stockholders Equity	1.65B	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: Positive
• Last Price: 289.00
• 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:3997, the sentiment is Positive. The current price of 289 is below the 20-day moving average (MA) of 332.00, above the 50-day MA of 253.37, and above the 200-day MA of 160.84, indicating a bullish trend. The MACD of 23.90 indicates Positive momentum. The RSI at 57.89 is Neutral, neither overbought nor oversold. The STOCH value of 56.78 is Neutral, 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
3920	79 Outperform	¥5.65B	13.85	12.63%	1.19%	7.38%	515.19%
3839	77 Outperform	¥5.09B	21.21	4.18%	1.61%	7.78%	1.78%
4076	74 Outperform	¥4.68B	10.96	10.79%	4.65%	5.23%	-7.37%
6942	57 Neutral	¥5.55B	52.42	3.15%	―	-5.20%	133.74%
3997	54 Neutral	¥11.28B	―	―	0.69%	15.05%	89.12%
2375	44 Neutral	¥5.04B	-23.53	-28.46%	0.40%	-11.66%	-137.22%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%