Neural Group Inc. (4056) AI Stock Analysis

• Market Cap: ¥9.39B
• Dividend Yield: N/A
• Average Volume (3M): 113.69K
• Price to Earnings (P/E): 185.1
• Beta (1Y): 0.96
• Revenue Growth: -0.62%
• EPS Growth: N/A
• Country: JP
• Employees: 219
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): -0.91
• Shares Outstanding: 17,191,030
• 10 Day Avg. Volume: 110,240
• 30 Day Avg. Volume: 113,690
• PEG Ratio: 2.15
• Price to Book (P/B): 19.37
• Price to Sales (P/S): 3.34
• P/FCF Ratio: 62.67
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 50 Neutral
• Price Target: ¥448.00 ▲(5.16% Upside)

Neural Group Inc. is on a positive trajectory with revenue growth and improved cash flow management. However, the stock is currently overvalued with weak technical indicators and ongoing profitability challenges. High leverage further adds to the risk profile.

Neural Group Inc. Business Overview & Revenue Model

Company Description

Neural Group Inc. (4056) is a leading technology company specializing in artificial intelligence and machine learning solutions. The company operates across various sectors, including healthcare, finance, and cybersecurity, providing innovative products and services designed to enhance data analysis, automate processes, and improve decision-making. Core offerings include AI-driven analytics platforms, predictive modeling tools, and customized machine learning applications tailored to client needs.

How the Company Makes Money

Neural Group Inc. generates revenue primarily through a subscription-based model for its software products, as well as through consulting services that help clients implement AI solutions. Key revenue streams include licensing fees from its analytics platforms, project-based fees from custom development work, and maintenance and support contracts. Additionally, the company has established significant partnerships with major technology firms and industry leaders, allowing it to expand its market reach and enhance its product offerings, contributing to its overall earnings.

Neural Group Inc. Financial Statement Overview

Summary

Neural Group Inc. shows strong revenue growth and operational efficiency improvements. However, challenges remain with profitability and high leverage, as indicated by a negative net profit margin and high debt-to-equity ratio.

Income Statement

Neural Group Inc. has shown a significant improvement in its revenue growth, with a 12.15% increase from 2023 to 2024. The gross profit margin is strong at 66.41% for 2024, indicating effective cost management. However, the company is still facing challenges with profitability, as evidenced by a negative net profit margin of -1.71% and a slight improvement in EBIT margin to 1.00% from a negative position in 2023. The EBITDA margin also improved to 5.13%, showing better operational efficiency.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 3.05, indicating significant leverage, which could pose risks if not managed carefully. However, the return on equity has improved to -9.92%, showing a reduction in losses relative to equity. The equity ratio stands at 20.63%, suggesting a moderate level of equity financing relative to total assets.

Cash Flow

The cash flow statement shows a substantial turnaround with a positive operating cash flow of $194.6 million in 2024, compared to a negative figure in 2023. Free cash flow has also improved significantly, reflecting better cash management. The operating cash flow to net income ratio is robust, indicating efficient conversion of income to cash. However, the free cash flow to net income ratio is negative due to the net loss, highlighting ongoing profitability challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.79B	3.56B	3.18B	2.88B	1.01B	762.79M
Gross Profit	1.83B	2.37B	2.06B	1.85B	787.57M	669.98M
EBITDA	263.31M	183.02M	-557.28M	-647.82M	110.26M	185.41M
Net Income	76.37M	-60.93M	-650.12M	-909.18M	11.27M	147.36M
Balance Sheet
Total Assets	2.95B	2.98B	3.29B	3.86B	2.42B	1.92B
Cash, Cash Equivalents and Short-Term Investments	847.00M	670.06M	821.19M	1.11B	1.43B	1.42B
Total Debt	1.99B	1.88B	2.42B	2.85B	961.40M	564.82M
Total Liabilities	2.36B	2.36B	2.82B	3.40B	1.10B	714.54M
Stockholders Equity	593.00M	614.24M	466.59M	461.63M	1.32B	1.21B
Cash Flow
Free Cash Flow	0.00	189.85M	-455.41M	-455.60M	-255.65M	-3.10M
Operating Cash Flow	0.00	194.60M	-386.99M	-318.24M	-788.00K	138.42M
Investing Cash Flow	0.00	4.83M	-55.73M	-262.96M	-494.58M	-142.44M
Financing Cash Flow	0.00	-344.24M	237.69M	162.82M	496.55M	603.06M

Neural Group Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 426.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4056, the sentiment is Negative. The current price of 426 is below the 20-day moving average (MA) of 525.55, below the 50-day MA of 615.16, and below the 200-day MA of 736.25, indicating a bearish trend. The MACD of -42.42 indicates Positive momentum. The RSI at 22.51 is Positive, neither overbought nor oversold. The STOCH value of 2.16 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4056.

Neural Group Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3979	78 Outperform	¥11.61B	17.09	―	2.27%	12.09%	30.56%
7505	75 Outperform	¥23.42B	11.37	―	6.07%	16.90%	75.60%
3918	74 Outperform	¥11.91B	11.76	―	3.64%	-2.26%	3.37%
9753	73 Outperform	¥14.30B	9.75	―	2.68%	9.83%	12.07%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4056	50 Neutral	¥9.39B	185.05	―	―	-0.62%	―