Applied Technology Co., Ltd. (4356) AI Stock Analysis

• Market Cap: ¥10.30B
• Dividend Yield: 1.61%
• Average Volume (3M): 4.91K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.20
• Revenue Growth: -3.26%
• EPS Growth: 34.51%
• Country: JP
• Employees: 265
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 43.14
• Shares Outstanding: 5,716,800
• 10 Day Avg. Volume: 4,760
• 30 Day Avg. Volume: 4,913
• PEG Ratio: 8.28
• Price to Book (P/B): 1.46
• Price to Sales (P/S): 1.03
• P/FCF Ratio: 11.38
• 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
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: ¥2,095.00 ▲(13.06% Upside)

The score is driven primarily by strong financial quality—especially the debt-free balance sheet, steady growth, and consistently positive free cash flow. Valuation is supportive with a relatively low P/E and a modest dividend. Technical signals are more neutral, with limited near-term momentum despite longer-term moving-average support.

Positive Factors

Debt-Free Balance Sheet

A debt-free balance sheet materially lowers financial risk and enhances flexibility, allowing the company to invest in growth opportunities without the burden of interest payments.

Consistent Free Cash Flow

Consistent free cash flow indicates strong earnings quality and provides the company with the ability to reinvest in its business, pay dividends, or buffer against economic downturns.

Equity Growth

Steady equity growth reflects retained earnings strength and supports asset growth, indicating a solid financial foundation and potential for future expansion.

Negative Factors

Margin Compression

Gradual margin compression can impact profitability, reducing the company's ability to generate earnings from revenue, which may affect long-term financial health if not addressed.

Revenue Growth Decline

Slowing revenue growth may indicate market saturation or increased competition, potentially limiting future expansion and affecting the company's competitive position.

Cash Conversion Variability

Variability in cash conversion can signal issues with working capital management or collection timing, which may lead to liquidity challenges and affect operational stability.

Applied Technology Co., Ltd. Business Overview & Revenue Model

Company Description

Applied Technology Co., Ltd. provides engineering services in the fields of manufacturing, civil engineering and construction, disaster prevention, environment, and GIS in Japan. The company offers quotation support system, CAD and PLM integration, information management, after-sales services support and web workflow for manufacturing field; and structural analysis system, asset management, CIMs, and mobile terminal system for civil engineering and construction application. It provides disaster prevention and seismic simulation, disaster prevention information system, and weather cloud for disaster prevention/mitigation field; and terrestrial environment and water environment simulation, environmental assessment, environmental policy and building evaluation support services for environmental application. In addition, the company offers GIS services, which include goggle maps platform, YOLP premier, and GIS consulting and application development. The company was incorporated in 1984 and is headquartered in Osaka, Japan.

How the Company Makes Money

Applied Technology Co., Ltd. generates revenue primarily through the sale of its technology products and services. The company's key revenue streams include licensing fees from its software products, fees from IT consulting services, and income from system integration projects. Additionally, the company may engage in strategic partnerships with other technology firms to expand its service offerings and reach a wider customer base. These collaborations can lead to shared revenue opportunities and enhanced market presence, contributing significantly to the company's earnings. The company's focus on innovation and its ability to deliver customized solutions to meet the specific needs of its clients are also critical factors in its revenue generation.

Applied Technology Co., Ltd. Financial Statement Overview

Summary

Strong overall fundamentals supported by a very conservative, debt-free balance sheet and steadily rising equity. Revenue and net income have grown consistently, and free cash flow is reliably positive and closely tracks earnings. Main risks are gradual margin compression and some year-to-year variability in cash conversion.

Income Statement

Revenue has grown consistently from 2019 to 2024 (annual growth ranging from ~4.9% to ~34.3%, with 2024 at ~5.6%), showing a solid demand trajectory. Profitability is healthy with net margins around ~9–11%, but margins have gradually compressed versus earlier years (gross margin down to ~25.6% in 2024 from ~32.3% in 2019; operating profitability also slightly lower than prior peaks). Net income is relatively stable and rising over time, though the recent margin pressure is the main watch-out.

Balance Sheet

The balance sheet is very conservative with zero debt across all reported years, which materially lowers financial risk and improves flexibility. Equity has steadily increased (from ~¥2.5B in 2019 to ~¥5.5B in 2024), supporting asset growth and indicating retained earnings strength. Returns on equity remain strong (generally mid-teens to ~20%), though trending down from the 2021 peak, suggesting incremental profitability has softened as the capital base has expanded.

Cash Flow

Cash generation is solid overall: free cash flow is consistently positive and closely tracks earnings (free cash flow at ~84%–95% of net income historically; ~94% in 2024), which supports earnings quality. Free cash flow rebounded sharply in 2024 (up ~48%), but cash conversion has been somewhat uneven year-to-year, and operating cash flow has covered a relatively modest portion of revenue (roughly mid-single digits), indicating working-capital or collection timing can create variability.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.84B	7.42B	7.08B	6.45B	4.80B
Gross Profit	2.01B	2.16B	2.02B	1.78B	1.42B
EBITDA	988.53M	1.03B	1.08B	1.08B	739.55M
Net Income	725.66M	716.06M	736.39M	711.04M	474.61M
Balance Sheet
Total Assets	7.13B	6.55B	5.74B	4.99B	4.00B
Cash, Cash Equivalents and Short-Term Investments	626.22M	489.31M	469.61M	486.15M	602.96M
Total Debt	0.00	0.00	0.00	0.00	0.00
Total Liabilities	1.62B	1.60B	1.33B	1.41B	1.07B
Stockholders Equity	5.51B	4.95B	4.41B	3.58B	2.93B
Cash Flow
Free Cash Flow	707.37M	477.95M	499.36M	544.46M	350.79M
Operating Cash Flow	750.52M	530.71M	526.45M	582.12M	418.59M
Investing Cash Flow	-43.16M	-40.28M	-29.38M	-41.30M	-72.46M
Financing Cash Flow	-170.45M	-170.73M	-113.60M	-57.63M	-57.05M

Applied Technology Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1853.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4356, the sentiment is Negative. The current price of 1853 is above the 20-day moving average (MA) of 1835.00, above the 50-day MA of 1834.82, and above the 200-day MA of 1691.59, indicating a neutral trend. The MACD of -11.46 indicates Positive momentum. The RSI at 41.46 is Neutral, neither overbought nor oversold. The STOCH value of 21.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4356.

Applied Technology Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4055	81 Outperform	¥13.27B	25.87	―	0.71%	―	―
4356	78 Outperform	¥10.30B	11.07	―	1.61%	-3.26%	34.51%
2391	75 Outperform	¥8.18B	19.42	―	3.47%	-0.94%	-7.43%
9360	74 Outperform	¥9.18B	8.14	―	2.90%	9.15%	28.48%
4442	73 Outperform	¥8.96B	16.37	―	0.95%	9.36%	-1.69%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5026	38 Underperform	¥5.96B	-16.77	―	―	29.55%	-500.01%