SuRaLa Net Co., Ltd. (3998) AI Stock Analysis

• Market Cap: ¥2.17B
• Dividend Yield: N/A
• Average Volume (3M): 20.21K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.81
• Revenue Growth: -4.02%
• EPS Growth: -105.52%
• Country: JP
• Employees: 104
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 4.91
• Shares Outstanding: 6,694,764
• 10 Day Avg. Volume: 31,090
• 30 Day Avg. Volume: 20,213
• PEG Ratio: 5.33
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 1.10
• P/FCF Ratio: 8.91
• 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
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: ¥337.00 ▼(-9.65% Downside)
• Action: Reiterated Date: 02/10/26
• Date: Action: Reiterated 02/10/26

The score is primarily driven by mixed financial performance: strong 2025 revenue growth and a low-risk, debt-free balance sheet are positives, but sharply weaker profitability and multi-year margin erosion weigh heavily. Technicals are neutral-to-bearish with the stock below key moving averages, and valuation is constrained by negative earnings (negative P/E).

Positive Factors

Revenue Re-acceleration

A 27.8% revenue rebound in 2025 signals renewed demand for the SuRaLa platform and content. Durable top-line momentum across education customers supports scalable subscription/usage revenue, improves leverage on fixed content costs, and underpins longer‑term investment in product and distribution.

Conservative Balance Sheet

Near‑zero debt materially lowers financial risk and interest burden, giving management flexibility to fund operations, product development, or strategic M&A from internal resources. This resilience supports the company through revenue cyclicality and reduces refinancing and solvency risk over the medium term.

High Gross Margins & FCF Rebound

Sustained gross margins above 60% indicate software-like economics on content and platform sales, allowing incremental revenue to flow to the bottom line. The 2025 free cash flow rebound shows improving cash conversion, supporting reinvestment in content and reduced reliance on external capital.

Negative Factors

Profitability Deterioration

A pronounced fall in operating profitability erodes the company's ability to generate sustainable earnings from revenue. Compressed EBITDA margins suggest rising operating costs or pricing pressure, limiting retained cash for growth and increasing the difficulty of restoring historical return levels absent structural cost or revenue improvements.

Multi-year Margin Erosion & ROE Decline

Persistent margin decline and weakening ROE point to structural challenges—competitive pressure, higher content or delivery costs, or weaker monetization—that reduce long‑term shareholder returns. Recovery of ROE will require sustained margin improvement or faster, durable revenue growth.

Choppy Cash Generation

Irregular cash generation complicates planning and investment. The 2024 FCF trough followed by a 2025 rebound indicates volatility in cash conversion, which raises refinancing and execution risk for multi‑period investments and makes consistent funding of content, sales, or platform improvements less certain.

SuRaLa Net Co., Ltd. Business Overview & Revenue Model

Company Description

SuRaLa Net Co.,Ltd. provides educational services through e-learning in Japan and internationally. It also provides operation consulting, marketing promotion, and Website operation services. The company was incorporated in 2008 and is headquartered in Tokyo, Japan. SuRaLa Net Co.,Ltd. is a subsidiary of FC Education Inc.

How the Company Makes Money

SuRaLa Net Co., Ltd. generates revenue primarily through subscription fees for its online learning platforms. The company offers various subscription plans tailored to different educational levels and subjects, allowing customers to choose according to their specific needs. Additionally, SuRaLa Net collaborates with educational institutions, providing them with customized learning solutions and platforms, which serve as another revenue stream. The company's strategic partnerships with schools and educational organizations help expand its customer base and enhance its market presence, further contributing to its earnings.

SuRaLa Net Co., Ltd. Financial Statement Overview

Summary

Mixed fundamentals: revenue re-accelerated strongly in 2025 (+27.8%), the balance sheet is very conservative with essentially no debt (supports resilience), and operating/free cash flow are generally positive with FCF rebounding in 2025. Offsetting this, profitability weakened sharply (near-breakeven/net loss) and margins have eroded materially versus 2021–2023, increasing earnings volatility.

Income Statement

Revenue returned to solid growth in 2025 (annual +27.8%), but profitability weakened sharply versus prior years: net income turned slightly negative and operating profitability compressed materially (EBITDA margin ~13% vs ~21% in 2024 and ~30%+ in 2021–2023). Gross margin remains healthy (~60%+), yet the multi-year trend shows meaningful margin erosion and higher earnings volatility, which weighs on quality.

Balance Sheet

The balance sheet is conservatively positioned with essentially no debt (debt-to-equity ~0 in recent years) and a large equity base relative to assets. This low leverage reduces financial risk and supports resilience, though returns on equity have stepped down materially from strong levels in 2020–2022 to low levels in 2024, consistent with the earnings slowdown.

Cash Flow

Operating cash flow remains consistently positive (about ¥240mm–¥600mm across the period) and free cash flow rebounded strongly in 2025 (¥238mm) after turning negative in 2024. However, cash generation has been choppy year-to-year, and the recent rebound is occurring alongside near-breakeven earnings, suggesting cash conversion is currently better than reported profitability but overall stability is mixed.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.93B	1.93B	1.95B	2.15B	2.15B	1.95B
Gross Profit	1.22B	1.17B	1.26B	1.51B	1.57B	1.48B
EBITDA	416.12M	247.97M	406.86M	633.56M	679.59M	690.24M
Net Income	114.86M	-3.78M	72.90M	304.35M	355.40M	399.78M
Balance Sheet
Total Assets	2.69B	2.48B	2.64B	2.71B	2.67B	2.13B
Cash, Cash Equivalents and Short-Term Investments	1.13B	767.89M	1.06B	1.15B	1.33B	1.24B
Total Debt	0.00	0.00	0.00	1.50M	107.50M	0.00
Total Liabilities	450.03M	275.19M	375.00M	457.05M	600.73M	415.13M
Stockholders Equity	2.23B	2.19B	2.24B	2.22B	2.03B	1.71B
Cash Flow
Free Cash Flow	0.00	238.26M	-42.36M	48.75M	172.93M	281.85M
Operating Cash Flow	0.00	239.65M	372.85M	475.54M	542.50M	502.68M
Investing Cash Flow	0.00	-484.42M	-414.90M	-433.83M	-503.71M	-222.88M
Financing Cash Flow	0.00	-48.40M	-51.69M	-220.51M	50.11M	11.76M

SuRaLa Net Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 373.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3998, the sentiment is Negative. The current price of 373 is above the 20-day moving average (MA) of 330.50, above the 50-day MA of 329.08, and above the 200-day MA of 351.96, indicating a bearish trend. The MACD of -1.28 indicates Negative momentum. The RSI at 48.73 is Neutral, neither overbought nor oversold. The STOCH value of 34.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3998.

SuRaLa Net Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9560	74 Outperform	¥9.00B	10.13	―	2.06%	29.06%	41.54%
7353	64 Neutral	¥3.96B	13.46	―	―	13.50%	-19.59%
9345	63 Neutral	¥2.15B	10.88	―	1.92%	4.25%	-6.45%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
9339	60 Neutral	¥2.93B	29.48	―	1.33%	-7.47%	378.86%
3998	57 Neutral	¥2.17B	-453.08	―	―	-4.02%	-105.52%
6096	55 Neutral	¥2.84B	39.16	―	1.68%	-4.16%	―