Neural Group Inc. (4056) AI Stock Analysis

• Market Cap: ¥13.59B
• Dividend Yield: N/A
• Average Volume (3M): 29.47K
• Price to Earnings (P/E): 293.2
• Beta (1Y): 1.00
• Revenue Growth: 4.41%
• EPS Growth: N/A
• Country: JP
• Employees: 219
• Sector: Technology
• Sector Strength: 92
• Industry: Information Technology Services
• EPS (TTM): -0.57
• Shares Outstanding: 15,375,031
• 10 Day Avg. Volume: 40,120
• 30 Day Avg. Volume: 29,466
• 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: ¥946.00
• Price Target Upside: 9.36% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 64 Neutral
• Price Target: ¥946.00 ▲(9.36% Upside)

Neural Group Inc.'s stock score is primarily driven by its improving financial performance and positive technical indicators. However, the high P/E ratio suggests overvaluation, which tempers the overall score. The lack of earnings call insights and corporate events did not impact the score.

Neural Group Inc. Business Overview & Revenue Model

Company Description

Neural Group Inc. (4056) is a pioneering technology company specializing in artificial intelligence and machine learning solutions. Operating primarily in the software development and data analytics sectors, Neural Group focuses on providing innovative AI-driven products and services that enhance operational efficiency for businesses across various industries. Their core offerings include advanced predictive analytics tools, natural language processing applications, and AI consulting services designed to help organizations leverage data for strategic decision-making.

How the Company Makes Money

Neural Group Inc. generates revenue through multiple streams. The primary revenue model is based on software licensing, where clients pay for access to their proprietary AI tools and platforms. Additionally, the company offers subscription-based services for ongoing support and updates, which provide a steady income stream. Consulting services represent another significant revenue source, as businesses seek expertise in implementing AI solutions tailored to their specific needs. Neural Group also engages in strategic partnerships with technology firms and academic institutions, which can lead to joint ventures or collaborative projects, further enhancing their market reach and profitability.

Neural Group Inc. Financial Statement Overview

Summary

Neural Group Inc. shows strong revenue growth and improved cash flow management. However, challenges persist with profitability and a high debt burden.

Income Statement

Neural Group Inc. has demonstrated strong revenue growth, with a significant increase from 2023 to 2024. However, the company continues to face profitability challenges, as indicated by negative net income and low EBIT and EBITDA margins. The gross profit margin remains robust at 66.4% for 2024, but the net profit margin is -1.68%, reflecting substantial operational challenges.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.06, indicating a leveraged position. Despite this, the company has improved its equity position from 2023 to 2024, with stockholders' equity rising to $613 million. The equity ratio stands at 20.6%, suggesting a moderate reliance on equity financing.

Cash Flow

Cash flow performance has improved significantly, with positive free cash flow of $193 million in 2024, compared to negative free cash flow in previous years. The operating cash flow to net income ratio is strong, indicating effective cash management strategies.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.56B	3.18B	2.88B	1.01B	762.79M
Gross Profit	2.37B	2.06B	1.91B	787.57M	669.98M
EBITDA	183.02M	-557.28M	-647.82M	110.26M	185.41M
Net Income	-60.93M	-650.12M	-880.00M	11.27M	147.36M
Balance Sheet
Total Assets	2.98B	3.29B	3.86B	2.42B	1.92B
Cash, Cash Equivalents and Short-Term Investments	670.06M	821.19M	1.11B	1.43B	1.42B
Total Debt	1.88B	2.42B	2.85B	961.40M	564.82M
Total Liabilities	2.36B	2.82B	3.40B	1.10B	714.54M
Stockholders Equity	614.24M	466.59M	461.63M	1.32B	1.21B
Cash Flow
Free Cash Flow	189.85M	-455.41M	-455.60M	-255.65M	-3.10M
Operating Cash Flow	194.60M	-386.99M	-318.24M	-788.00K	138.42M
Investing Cash Flow	4.83M	-55.73M	-262.96M	-494.58M	-142.44M
Financing Cash Flow	-344.24M	237.69M	162.82M	496.55M	603.06M

Neural Group Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 865.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4056, the sentiment is Positive. The current price of 865 is above the 20-day moving average (MA) of 833.50, above the 50-day MA of 803.28, and above the 200-day MA of 787.20, indicating a bullish trend. The MACD of 18.88 indicates Negative momentum. The RSI at 55.72 is Neutral, neither overbought nor oversold. The STOCH value of 45.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4056.

Neural Group Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9753	79 Outperform	¥12.94B	8.82		2.98%	9.12%	20.01%
7505	76 Outperform	¥17.42B	9.30		3.08%	12.77%	37.78%
3918	74 Outperform	¥11.37B	9.65		3.03%	-7.36%	35.89%
3979	73 Outperform	¥10.95B	18.16		0.63%	12.77%	-1.50%
4056	64 Neutral	¥13.59B	293.17		―	4.41%	―
Sector *	61 Neutral	$35.97B	6.65	-10.17%	1.99%	8.60%	-7.54%