System Support, Inc. (4396) AI Stock Analysis

• Market Cap: ¥31.14B
• Dividend Yield: 1.71%
• Average Volume (3M): 45.01K
• Price to Earnings (P/E): 21.2
• Beta (1Y): 0.72
• Revenue Growth: 22.25%
• EPS Growth: 31.88%
• Country: JP
• Employees: 1,484
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 34.14
• Shares Outstanding: 10,400,000
• 10 Day Avg. Volume: 41,880
• 30 Day Avg. Volume: 45,006
• PEG Ratio: 0.97
• Price to Book (P/B): 4.63
• Price to Sales (P/S): 1.03
• P/FCF Ratio: 13.20
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: ¥3,312.00 ▲(16.95% Upside)

System Support, Inc. demonstrates strong financial performance with consistent revenue growth and solid profitability. The technical analysis indicates a strong upward trend, supported by positive momentum indicators. The valuation is reasonable, with a moderate P/E ratio and a modest dividend yield. These factors collectively contribute to a robust overall stock score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective business model, supporting long-term expansion and stability.

Cash Flow Management

Efficient cash generation supports reinvestment in growth opportunities and provides a buffer against financial uncertainties.

Profitability

Strong profitability margins reflect effective cost management and competitive pricing, enhancing long-term financial health.

Negative Factors

Debt Levels

Rising debt levels can strain financial resources, potentially limiting strategic flexibility and increasing financial risk.

Leverage

While leverage is moderate, any further increase could impact financial stability and the ability to invest in growth initiatives.

Equity Ratio

A stable equity ratio is positive, but maintaining it amidst rising debt is crucial to ensure long-term financial health and investor confidence.

System Support, Inc. Business Overview & Revenue Model

Company Description

System Support, Inc. (4396) is a leading provider of IT services and solutions, specializing in systems integration, managed services, and technical support for businesses across various sectors. The company focuses on delivering innovative technology solutions that enhance operational efficiency and streamline workflows. With a commitment to customer satisfaction, System Support, Inc. offers a range of core products, including cloud computing services, cybersecurity solutions, and enterprise software applications tailored to meet the unique needs of its clients.

How the Company Makes Money

System Support, Inc. generates revenue through multiple streams, primarily by offering subscription-based managed services and support contracts that provide ongoing maintenance and technical assistance to businesses. Additionally, the company earns revenue from the sale of software licenses, cloud service subscriptions, and customized IT solutions. Strategic partnerships with major technology vendors enhance its product offerings and enable cross-selling opportunities, contributing significantly to its earnings. The company also benefits from project-based consulting services, where it charges clients for specific IT implementation projects, further diversifying its revenue sources.

System Support, Inc. Financial Statement Overview

Summary

System Support, Inc. presents a strong financial profile with consistent revenue growth, solid profitability, and efficient cash flow management. The company's balance sheet is stable, with moderate leverage and strong equity returns. While the increase in debt requires attention, the overall financial health is robust, positioning the company well for future growth in the Information Technology Services industry.

Income Statement

System Support, Inc. has demonstrated consistent revenue growth with a 4.15% increase in the most recent year. The company maintains strong profitability metrics, with a gross profit margin of approximately 27.9% and a net profit margin of 5.41%. EBIT and EBITDA margins are also healthy, indicating efficient operational management. Overall, the income statement reflects robust growth and profitability, positioning the company well within the industry.

Balance Sheet

The balance sheet shows a solid equity base with a debt-to-equity ratio of 0.33, indicating moderate leverage. The return on equity is strong at 24.22%, showcasing effective utilization of shareholder funds. The equity ratio stands at 44.11%, reflecting a stable financial structure. While the company has managed its debt well, the increase in total debt over the past year warrants monitoring.

Cash Flow

System Support, Inc. exhibits strong cash flow performance with significant free cash flow growth. The operating cash flow to net income ratio is 1.63, indicating efficient cash generation relative to net income. The free cash flow to net income ratio is robust at 1.45, highlighting the company's ability to convert earnings into cash. The cash flow statement reflects a healthy liquidity position, supporting future growth initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	25.87B	26.94B	22.03B	19.27B	16.20B	14.43B
Gross Profit	7.23B	7.50B	6.09B	5.23B	4.34B	3.74B
EBITDA	2.52B	2.54B	2.01B	1.66B	1.38B	1.12B
Net Income	1.52B	1.46B	1.22B	1.01B	785.69M	674.50M
Balance Sheet
Total Assets	12.99B	13.63B	9.93B	8.87B	7.82B	6.66B
Cash, Cash Equivalents and Short-Term Investments	4.91B	5.84B	4.25B	3.57B	3.25B	2.70B
Total Debt	2.66B	1.98B	1.06B	1.21B	1.21B	1.00B
Total Liabilities	7.18B	7.62B	4.87B	4.75B	4.39B	3.67B
Stockholders Equity	5.82B	6.01B	5.06B	4.12B	3.42B	2.99B
Cash Flow
Free Cash Flow	0.00	2.11B	1.32B	901.40M	913.58M	488.16M
Operating Cash Flow	0.00	2.38B	1.47B	1.07B	1.01B	709.23M
Investing Cash Flow	0.00	-792.60M	-419.54M	-324.49M	-274.70M	-276.55M
Financing Cash Flow	0.00	-4.83M	-513.24M	-462.04M	-240.62M	-165.71M

System Support, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2832.00
• 50DMA: Negative
• 100DMA: Negative
• 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:4396, the sentiment is Negative. The current price of 2832 is below the 20-day moving average (MA) of 2893.35, below the 50-day MA of 3072.38, and above the 200-day MA of 2555.20, indicating a neutral trend. The MACD of -51.86 indicates Negative momentum. The RSI at 44.18 is Neutral, neither overbought nor oversold. The STOCH value of 62.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4396.

System Support, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4396	76 Outperform	¥31.14B	21.21	―	1.71%	22.25%	31.88%
3788	76 Outperform	¥24.73B	32.44	―	1.52%	7.83%	49.73%
3393	74 Outperform	¥27.15B	13.90	―	4.70%	12.32%	10.42%
2359	74 Outperform	¥28.48B	11.84	―	2.79%	2.11%	5.55%
3655	73 Outperform	¥59.12B	72.09	―	0.30%	8.64%	-23.20%
2349	72 Outperform	¥25.55B	10.84	―	1.21%	7.21%	0.30%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

System Support, Inc. Corporate Events

System Support Holdings Inc. Completes Acquisition of Echo System Co., Ltd.

System Support Holdings Inc. has completed the acquisition of Echo System Co., Ltd., a company specializing in contracted software development and sales of packaged software and applications. This acquisition is expected to have a minimal immediate impact on the company’s financial results for the current fiscal year, but it is anticipated to enhance the corporate value and contribute positively to the group’s consolidated results in the medium to long term.

System Support Holdings Inc. Acquires Echo System Co., Ltd. to Expand Cloud Integration Business

System Support Holdings Inc. announced its decision to acquire Echo System Co., Ltd., a systems integrator with a strong presence in western Japan. This acquisition aligns with System Support’s Medium-Term Management Plan to expand its cloud integration business and enhance its service offerings by leveraging Echo System’s technical expertise and customer base.