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

• Market Cap: ¥28.07B
• Dividend Yield: 3.08%
• Average Volume (3M): 11.95K
• Price to Earnings (P/E): 14.7
• Beta (1Y): 0.79
• Revenue Growth: 4.18%
• EPS Growth: -6.71%
• Country: JP
• Employees: 1,005
• Sector: Technology
• Sector Strength: 84
• Industry: Information Technology Services
• EPS (TTM): 76.88
• Shares Outstanding: 10,798,341
• 10 Day Avg. Volume: 12,100
• 30 Day Avg. Volume: 11,953
• PEG Ratio: 0.34
• Price to Book (P/B): 2.61
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 13.28
• 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

• Rating: 75 Outperform
• Price Target: ¥2,837.00 ▲(9.12%Upside)

Densan System Holdings Co. Ltd. scores a solid 75, reflecting its strong balance sheet and attractive valuation. While the stock has stable financial performance, improvements in cash flow management are suggested. The technical indicators show neutral momentum, offering no clear short-term direction. Overall, the stock is supported by its valuation and financial stability.

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

Company Description

Densan System Holdings Co. Ltd. (4072) is a Japan-based company primarily engaged in the information technology sector. The company focuses on providing comprehensive IT solutions, including software development, system integration, and IT infrastructure services. Densan System Holdings offers its services to a wide range of industries, helping businesses optimize their operations through innovative technology solutions.

How the Company Makes Money

Densan System Holdings Co. Ltd. generates revenue through a variety of IT-related services. Key revenue streams include custom software development, where the company designs and implements software solutions tailored to client needs, and system integration services, which involve combining different subsystems into a cohesive IT infrastructure. The company also earns money by providing IT consulting services, helping organizations plan and implement effective technology strategies. Additionally, Densan System Holdings may engage in partnerships with other technology firms to enhance its service offerings and expand its market reach, contributing to its earnings.

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
	EBIT
2.31B	3.96B	3.41B	3.14B	2.84B
	EBITDA
3.21B	4.01B	4.21B	3.84B	3.60B
	Net Income Common Stockholders
1.85B	2.00B	2.35B	1.98B	1.92B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
19.28B	15.91B	12.53B	13.67B	29.52B
	Total Assets
61.75B	57.05B	72.17B	51.28B	47.98B
	Total Debt
1.07B	1.53B	1.49B	1.09B	1.21B
	Net Debt
-18.20B	-14.39B	-11.04B	-12.58B	-28.20B
	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: 2600.00
• 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:4072, the sentiment is Positive. The current price of 2600 is above the 20-day moving average (MA) of 2538.95, above the 50-day MA of 2502.66, and above the 200-day MA of 2509.82, indicating a bullish trend. The MACD of 25.97 indicates Negative momentum. The RSI at 65.03 is Neutral, neither overbought nor oversold. The STOCH value of 88.44 is Negative, 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	¥26.27B	10.92		1.18%	11.94%	14.10%
4396	76 Outperform	¥25.51B	16.59		2.04%	20.75%	31.02%
4072	75 Outperform	¥28.07B	14.71		3.08%	4.18%	-6.71%
3655	73 Outperform	¥28.92B	23.66		0.61%	10.35%	98.15%
9640	72 Outperform	¥29.56B	19.63		5.01%	2.17%	149.68%
9600	71 Outperform	¥27.92B	12.47		3.05%	3.24%	7.51%
Sector *	62 Neutral	$11.93B	10.60	-7.51%	3.00%	7.40%	-8.09%