Densan System Holdings Co. Ltd. (4072) AI Stock Analysis

• Market Cap: ¥44.65B
• Dividend Yield: 1.93%
• Average Volume (3M): 442.12K
• Price to Earnings (P/E): 24.5
• Beta (1Y): 0.66
• Revenue Growth: 5.55%
• EPS Growth: 18.43%
• Country: JP
• Employees: 1,005
• Sector: Technology
• Sector Strength: 83
• Industry: Information Technology Services
• EPS (TTM): 40.47
• Shares Outstanding: 10,798,341
• 10 Day Avg. Volume: 1,310,190
• 30 Day Avg. Volume: 442,123
• 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: ¥4,507.00
• Price Target Upside: 15.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 68 Neutral
• Price Target: ¥4,507.00 ▲(15.86% Upside)

The overall stock score of 68 reflects a strong financial foundation with a robust balance sheet and consistent revenue growth. However, the stock's technical indicators suggest it may be overbought, and the valuation appears high, which could limit upside potential.

Densan System Holdings Co. Ltd. Business Overview & Revenue Model

Company Description

Densan System Holdings Co. Ltd. (4072) is a Japanese company that specializes in providing comprehensive IT solutions across various sectors. The company is engaged in the development and management of software systems, including application software, system software, and middleware, catering to industries such as finance, manufacturing, and public services. Densan System Holdings also offers IT consulting, system integration, and maintenance services, focusing on delivering customized technology solutions to improve operational efficiency for its clients.

How the Company Makes Money

Densan System Holdings Co. Ltd. generates revenue through several key streams. Firstly, the company earns income from the sale and licensing of its software products, which include customized application solutions for different industries. Secondly, it provides IT consulting services, where it charges clients for expertise in optimizing their technology infrastructure. System integration and maintenance services also contribute to the company's income, as clients pay for the implementation and ongoing support of IT systems. Additionally, Densan may engage in partnerships or collaborations with other technology firms to expand its service offerings and market reach, further enhancing its revenue potential.

Densan System Holdings Co. Ltd. Financial Statement Overview

Summary

Densan System Holdings Co. Ltd. demonstrates a solid financial foundation driven by strong balance sheet metrics with low leverage and efficient equity use. Income growth is consistent, though there are challenges in operational efficiency as indicated by declining EBIT and EBITDA margins. Cash flow is stable but has seen a decline, indicating room for improvement in liquidity management.

Income Statement

Densan System Holdings Co. Ltd. has demonstrated consistent revenue growth with a substantial increase of 3% from 2023 to 2024. The gross profit margin is healthy at 15.2% for 2024, although it has slightly decreased from the previous year. Net profit margin stands at 3.0%, indicating modest profitability. However, there is a decline in EBIT and EBITDA margins compared to the previous year, suggesting some challenges in operational efficiency.

Balance Sheet

The company maintains strong financial stability with a debt-to-equity ratio of 0.05, indicating low leverage. Equity ratio is robust at 35.8%, reflecting a solid capital structure. Return on equity is 8.4%, showcasing efficient use of equity to generate profits. Overall, the balance sheet indicates a financially healthy organization with low risk.

Cash Flow

Operating cash flow is positive, but a decline from the previous year suggests potential cash flow management issues. Free cash flow remains positive with a growth rate of -41.9%, reflecting a decrease in liquidity. The operating cash flow to net income ratio is 1.63, indicating decent conversion of income to cash. Overall, the cash flow position is stable but has room for improvement.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	61.26B	59.59B	53.48B	50.36B	45.75B
Gross Profit	9.29B	10.60B	9.98B	9.23B	8.02B
EBITDA	3.21B	4.01B	4.21B	3.84B	3.60B
Net Income	1.85B	2.00B	2.35B	1.98B	1.92B
Balance Sheet
Total Assets	61.75B	57.05B	72.17B	51.28B	47.98B
Cash, Cash Equivalents and Short-Term Investments	19.28B	15.91B	12.53B	13.67B	29.52B
Total Debt	1.07B	1.53B	1.49B	1.09B	1.21B
Total Liabilities	39.45B	36.28B	52.51B	33.68B	32.15B
Stockholders Equity	22.08B	20.58B	19.45B	17.41B	15.65B
Cash Flow
Free Cash Flow	2.73B	4.69B	1.34B	1.92B	1.87B
Operating Cash Flow	3.02B	5.51B	1.91B	2.53B	2.76B
Investing Cash Flow	239.00M	-852.00M	-1.72B	-1.23B	-1.91B
Financing Cash Flow	-765.00M	-941.00M	-5.00M	-719.00M	2.69B

Densan System Holdings Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3890.00
• 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:4072, the sentiment is Positive. The current price of 3890 is above the 20-day moving average (MA) of 3158.95, above the 50-day MA of 2830.09, and above the 200-day MA of 2537.45, indicating a bullish trend. The MACD of 418.99 indicates Negative momentum. The RSI at 64.30 is Neutral, neither overbought nor oversold. The STOCH value of 63.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4072.

Densan System Holdings Co. Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2349	77 Outperform	¥26.11B	10.69		1.20%	9.56%	7.39%
4396	76 Outperform	¥30.10B	20.34		1.69%	22.28%	19.69%
9640	76 Outperform	¥30.94B	19.88		4.67%	3.32%	225.36%
3655	73 Outperform	¥28.98B	27.30		0.62%	11.47%	17.94%
9600	69 Neutral	¥27.64B	11.42		3.11%	6.33%	37.17%
4072	68 Neutral	¥44.65B	24.50		1.93%	5.55%	18.43%
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%