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Densan System Holdings Co. Ltd. (JP:4072)
:4072
Japanese Market
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Densan System Holdings Co. Ltd. (4072) AI Stock Analysis

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JP:4072

Densan System Holdings Co. Ltd.

(4072)

Rating:75Outperform
Price Target:
¥2,837.00
▲(9.79%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. (4072) vs. iShares MSCI Japan ETF (EWJ)

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

Company DescriptionDensan 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 MoneyDensan 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
75
Positive
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
85
Very Positive
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
70
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue61.26B59.59B53.48B50.36B45.75B
Gross Profit9.29B10.60B9.98B9.23B8.02B
EBITDA3.21B4.01B4.21B3.84B3.60B
Net Income1.85B2.00B2.35B1.98B1.92B
Balance Sheet
Total Assets61.75B57.05B72.17B51.28B47.98B
Cash, Cash Equivalents and Short-Term Investments19.28B15.91B12.53B13.67B29.52B
Total Debt1.07B1.53B1.49B1.09B1.21B
Total Liabilities39.45B36.28B52.51B33.68B32.15B
Stockholders Equity22.08B20.58B19.45B17.41B15.65B
Cash Flow
Free Cash Flow2.73B4.69B1.34B1.92B1.87B
Operating Cash Flow3.02B5.51B1.91B2.53B2.76B
Investing Cash Flow239.00M-852.00M-1.72B-1.23B-1.91B
Financing Cash Flow-765.00M-941.00M-5.00M-719.00M2.69B

Densan System Holdings Co. Ltd. Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price2584.00
Price Trends
50DMA
2579.07
Negative
100DMA
2535.24
Positive
200DMA
2480.02
Positive
Market Momentum
MACD
-0.18
Positive
RSI
47.42
Neutral
STOCH
25.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4072, the sentiment is Neutral. The current price of 2584 is below the 20-day moving average (MA) of 2590.70, above the 50-day MA of 2579.07, and above the 200-day MA of 2480.02, indicating a neutral trend. The MACD of -0.18 indicates Positive momentum. The RSI at 47.42 is Neutral, neither overbought nor oversold. The STOCH value of 25.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4072.

Densan System Holdings Co. Ltd. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
¥29.29B13.08
2.91%3.24%7.61%
77
Outperform
¥26.33B10.94
1.18%11.94%14.10%
76
Outperform
¥27.35B17.79
1.86%20.75%31.02%
76
Outperform
¥30.94B20.54
4.77%2.17%149.68%
75
Outperform
¥27.90B14.62
3.09%4.18%-6.71%
73
Outperform
¥28.94B23.68
0.60%10.35%98.15%
62
Neutral
$34.85B5.63-12.19%2.01%5.91%-17.91%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4072
Densan System Holdings Co. Ltd.
2,584.00
-199.53
-7.17%
JP:2349
Nippon Information Development Co., Ltd.
2,371.00
-155.42
-6.15%
JP:3655
BrainPad Inc.
1,328.00
345.63
35.18%
JP:4396
System Support, Inc.
2,666.00
728.19
37.58%
JP:9600
I-Net Corporation
1,944.00
130.95
7.22%
JP:9640
Saison Technology Co.Ltd.
1,888.00
19.87
1.06%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: May 17, 2025