Neural Group Inc. (4056) AI Stock Analysis

• Market Cap: ¥12.82B
• Dividend Yield: N/A
• Average Volume (3M): 13.64K
• Price to Earnings (P/E): 673.1
• Beta (1Y): 1.01
• Revenue Growth: 7.56%
• EPS Growth: N/A
• Country: JP
• Employees: 219
• Sector: Technology
• Sector Strength: 90
• Industry: Information Technology Services
• EPS (TTM): 4.06
• Shares Outstanding: 15,375,031
• 10 Day Avg. Volume: 10,860
• 30 Day Avg. Volume: 13,640
• PEG Ratio: <0.01
• Price to Book (P/B): 29.86
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -30.25
• 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: ¥804.00
• Price Target Upside: -3.60% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 55 Neutral
• Price Target: ¥800.00 ▼(-4.08%Downside)

Neural Group Inc.'s stock is supported by robust technical indicators and cash flow improvements, but its high valuation and profitability challenges weigh heavily on the overall score.

Neural Group Inc. Business Overview & Revenue Model

Company Description

Neural Pocket Inc. develops and owns a range of proprietary AI technologies. Its AI technologies detect images and videos, classification, spatial awareness, body movement/behavior analysis, facial expression and viewing analysis, and others. The company offers its services for creation of smart cities, such as mobility and mobile object-related fields; facility and infrastructure-related fields; and people and object movement tracking and security-related fields. It also provides digital signage services for advertisers and advertising agencies, developers, railway operators, commercial facilities, and other businesses; and AI-driven fashion trend analysis service that offers information on fashion trends to analyze data from SNS sites, shopping sites, and other services. The company was formerly known as Fashion Pocket Inc. and changed its name to Neural Pocket Inc. in March 2019. Neural Pocket Inc. was founded in 2018 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Neural Group Inc. generates revenue through the sale and licensing of its proprietary AI software and platforms. The company offers subscription-based models for its cloud-based services, allowing clients to access AI tools and analytics on a recurring basis. Additionally, Neural Group Inc. provides consulting and customization services, tailoring its solutions to meet the specific needs of different industries, which serves as an additional revenue stream. Partnerships with leading technology firms and strategic collaborations also contribute to its earnings, enabling the company to expand its market reach and access new customer bases.

Neural Group Inc. Financial Statement Overview

Summary

Neural Group Inc. shows strong revenue growth and improved cash flow, but faces profitability challenges and high debt, with a net profit margin of -1.68% and a debt-to-equity ratio of 3.06.

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: 834.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 834 is above the 20-day moving average (MA) of 783.85, above the 50-day MA of 735.68, and above the 200-day MA of 797.20, indicating a bullish trend. The MACD of 16.45 indicates Negative momentum. The RSI at 65.67 is Neutral, neither overbought nor oversold. The STOCH value of 82.40 is Negative, 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	81 Outperform	¥10.84B	8.24		3.49%	4.97%	4.92%
3918	74 Outperform	¥10.79B	22.19		4.56%	-6.79%	-1.31%
7505	74 Outperform	¥13.02B	7.86		1.34%	8.68%	29.76%
3979	74 Outperform	¥10.92B	23.82		0.63%	12.86%	-36.40%
Sector *	69 Neutral	¥229.01B	14.09	7.50%	2.69%	9.25%	8.21%
4056	55 Neutral	¥12.82B	673.07		―	7.56%	―