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TOWA Hi SYSTEM Co., Ltd. (JP:4172)
:4172
Japanese Market

TOWA Hi SYSTEM Co., Ltd. (4172) AI Stock Analysis

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JP

TOWA Hi SYSTEM Co., Ltd.

(4172)

Rating:76Outperform
Price Target:
TOWA Hi SYSTEM Co., Ltd. boasts strong financial performance, with high profitability and stability due to zero debt and substantial equity. Despite some volatility in revenue growth and cash flow management, the firm's solid balance sheet offers resilience. The stock's valuation is appealing with a low P/E ratio and high dividend yield, providing a good income potential. The technical analysis suggests mixed trends, lacking momentum indicators, which calls for cautious optimism.

TOWA Hi SYSTEM Co., Ltd. (4172) vs. iShares MSCI Japan ETF (EWJ)

TOWA Hi SYSTEM Co., Ltd. Business Overview & Revenue Model

Company DescriptionTOWA Hi SYSTEM CO.,LTD. develops medical software solutions. It is involved in the research and development, sale, and support of dental electronic medical record integrated systems; and iPad and web applications, such as inspection/periodontal examination systems, interview systems, own expense estimation systems, and image management systems, etc. The company was founded in 1978 and is headquartered in Okayama, Japan.
How the Company Makes MoneyTOWA Hi SYSTEM Co., Ltd. makes money primarily through its IT solutions and services. The company generates revenue by offering software development services, where it designs and implements tailor-made software solutions for clients across various industries. Another key revenue stream is system integration, where TOWA Hi SYSTEM helps organizations integrate and optimize their IT systems to improve operational efficiency. Additionally, the company provides IT consulting services, advising businesses on technology strategies and digital transformation. The company's earnings are further bolstered by long-term contracts and partnerships with major corporations, ensuring a steady flow of income from maintenance and support services.

TOWA Hi SYSTEM Co., Ltd. Financial Statement Overview

Summary
TOWA Hi SYSTEM Co., Ltd. demonstrates strong profitability with a high gross profit margin of 76.92% and a net profit margin of 20.51%. The company is financially stable with no debt and a high equity ratio of 91.64%. Cash flow management shows potential for improvement, with free cash flow improving but lacking detailed current operating cash flow data.
Income Statement
85
Very Positive
The company demonstrates strong profitability with a TTM gross profit margin of 76.92% and a net profit margin of 20.51%. Revenue growth is positive, with a 10.43% increase from the previous annual period. EBIT and EBITDA margins are robust at 23.80% and 27.02%, respectively, indicating efficient operational management. However, revenue has shown some volatility over the years.
Balance Sheet
88
Very Positive
The balance sheet is strong with no debt, resulting in a debt-to-equity ratio of 0. The equity ratio is high at 91.64%, reflecting financial stability and low leverage. Return on Equity (ROE) is solid at 11.62%, indicating effective use of equity to generate profits. The company maintains substantial cash reserves, further enhancing its financial resilience.
Cash Flow
70
Positive
Cash flow management shows mixed results. The free cash flow has improved significantly, showcasing a positive trajectory. However, the TTM operating cash flow is not reported, making it difficult to assess cash flow sufficiency. The previous operating cash flow was strong, suggesting potential for future cash generation.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
2.26B2.11B2.04B2.22B2.37B1.91B
Gross Profit
1.73B1.60B1.46B1.63B1.78B1.50B
EBIT
536.80M422.23M230.93M416.49M601.60M384.20M
EBITDA
609.60M501.00M299.00M527.25M575.05M414.34M
Net Income Common Stockholders
462.59M401.81M258.51M316.27M375.57M245.50M
Balance SheetCash, Cash Equivalents and Short-Term Investments
734.78M1.61B1.60B1.80B2.16B2.04B
Total Assets
4.37B4.38B4.06B4.05B4.02B3.08B
Total Debt
0.000.000.000.000.000.00
Net Debt
-734.78M-1.61B-1.40B-1.80B-2.16B-2.04B
Total Liabilities
463.66M441.62M327.84M455.95M515.13M438.70M
Stockholders Equity
3.90B3.93B3.73B3.59B3.50B2.65B
Cash FlowFree Cash Flow
0.00490.61M-115.80M243.93M122.69M401.31M
Operating Cash Flow
0.00504.44M61.07M342.68M248.00M430.09M
Investing Cash Flow
0.00186.01M-360.86M-481.22M-574.52M-27.51M
Financing Cash Flow
0.00-178.24M-95.88M-222.74M444.72M-41.00M

TOWA Hi SYSTEM Co., Ltd. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2144.00
Price Trends
50DMA
2114.14
Positive
100DMA
2014.95
Positive
200DMA
1895.13
Positive
Market Momentum
MACD
9.76
Positive
RSI
47.36
Neutral
STOCH
19.84
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4172, the sentiment is Positive. The current price of 2144 is below the 20-day moving average (MA) of 2174.70, above the 50-day MA of 2114.14, and above the 200-day MA of 1895.13, indicating a neutral trend. The MACD of 9.76 indicates Positive momentum. The RSI at 47.36 is Neutral, neither overbought nor oversold. The STOCH value of 19.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4172.

TOWA Hi SYSTEM Co., Ltd. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
¥5.35B8.28
3.36%16.07%72.83%
76
Outperform
¥4.81B11.64
4.76%23.59%122.48%
69
Neutral
¥3.63B14.09
1.78%4.62%55.87%
53
Neutral
$5.14B3.23-45.01%2.85%17.55%-0.69%
50
Neutral
¥3.88B
-7.73%-303.99%
48
Neutral
¥3.14B
-4.68%-62.31%
42
Neutral
¥5.76B
-9.71%-484.01%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4172
TOWA Hi SYSTEM Co., Ltd.
2,120.00
551.77
35.18%
JP:3628
Data Horizon Co., Ltd.
456.00
-121.00
-20.97%
JP:3671
Softmax Co., Ltd. (Japan)
908.00
158.46
21.14%
JP:4438
Welby Inc.
380.00
-172.00
-31.16%
JP:6034
MRT Inc.
696.00
-12.00
-1.69%
JP:6545
internet infinity INC.
682.00
249.14
57.56%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.