System Support, Inc. (4396) AI Stock Analysis

• Market Cap: ¥22.82B
• Dividend Yield: 1.7%
• Average Volume (3M): 45.01K
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.74
• Revenue Growth: 22.25%
• EPS Growth: 31.88%
• Country: JP
• Employees: 1,484
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): N/A
• Shares Outstanding: 20,800,000
• 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: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: ¥1,309.00 ▼(-9.47% Downside)
• Action: Reiterated Date: 08/29/25
• Date: Action: Reiterated 08/29/25

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

Sustained Revenue Growth

A multi-period revenue growth rate above 20% indicates durable top-line expansion that supports reinvestment in services and scale economies. Over the next 2–6 months this growth momentum underpins capacity expansion, client wins, and a larger addressable base for recurring IT services.

High Return on Equity

ROE of 24.22% signals efficient use of shareholder capital and strong profitability generation versus equity. This enduring efficiency supports capacity to fund growth internally, sustain investor returns, and indicates competitive positioning in service delivery and margin capture.

Strong Cash Conversion

Operating cash flow significantly exceeds net income and free cash flow converts a large share of earnings into liquidity. Durable cash conversion supports funding of capex, dividends, debt reduction and M&A, and provides a buffer to pursue strategic investments over coming quarters.

Negative Factors

Rising Debt Trend

Although leverage remains moderate (debt/equity ~0.33), the recent rise in total debt reduces financial flexibility. Persisting increases could heighten interest expense, constrain investment choices, and weaken the balance sheet's resilience to industry slowdowns over the medium term.

Thin Net Margin

A net margin near 5.4% limits the company's buffer against cost inflation or pricing pressure. Lower net conversion of gross profit makes earnings more sensitive to wage, subcontractor, or SG&A increases, potentially constraining sustainable free cash flow growth in adverse conditions.

Recent Growth Deceleration

Revenue growth slowed to about 4.2% in the latest year, suggesting deceleration versus longer-run metrics. A slowing top-line can limit operating leverage benefits, slow margin expansion, and require management to justify reinvestment levels or pursue inorganic options to sustain long-term growth.

System Support, Inc. Business Overview & Revenue Model

Company Description

System Support Inc. provides various IT services in Japan and internationally. It offers Tate Yakusha, a construction work information management system; Shugyo Yakusha, an attendance/work management system; SHIFTEE, a cloud-based shift management system; Voicetant Writer and Voicetant Recorder, which enables voice operation/input; Cloud Koubou that provides cloud support service; SmartDWH, a cloud-based DWH solution; PinMap that offers customer information mapping service; and MOS, a mobile order reception system. The company also provides system consulting/direction, system integration, IT task support, and outsourcing services, as well as ERP, Oracle, cloud, ServiceNow, RPA, infrastructure, virtualization, and work flow solutions. System Support Inc. was founded in 1980 and is headquartered in Kanazawa, Japan.

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	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	26.94B	22.03B	19.27B	16.20B	14.43B
Gross Profit	7.50B	6.09B	5.23B	4.34B	3.74B
EBITDA	2.54B	2.01B	1.66B	1.38B	1.12B
Net Income	1.46B	1.22B	1.01B	785.69M	674.50M
Balance Sheet
Total Assets	13.66B	9.93B	8.87B	7.82B	6.78B
Cash, Cash Equivalents and Short-Term Investments	5.84B	4.25B	3.57B	3.25B	2.70B
Total Debt	1.99B	1.06B	1.21B	1.21B	1.00B
Total Liabilities	7.64B	4.87B	4.75B	4.39B	3.79B
Stockholders Equity	6.01B	5.06B	4.12B	3.42B	2.99B
Cash Flow
Free Cash Flow	2.11B	1.32B	901.40M	913.58M	488.16M
Operating Cash Flow	2.38B	1.47B	1.07B	1.01B	709.23M
Investing Cash Flow	-792.60M	-419.54M	-324.49M	-274.70M	-276.55M
Financing Cash Flow	-4.83M	-513.24M	-462.04M	-240.62M	-165.71M

System Support, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1446.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 1446 is above the 20-day moving average (MA) of 1209.30, above the 50-day MA of 1323.18, and above the 200-day MA of 1390.39, indicating a bearish trend. The MACD of -46.70 indicates Positive momentum. The RSI at 30.62 is Neutral, neither overbought nor oversold. The STOCH value of 8.13 is Positive, 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
2359	80 Outperform	¥31.14B	8.18	―	2.93%	2.11%	5.55%
4396	76 Outperform	¥22.82B	11.39	―	1.70%	22.25%	31.88%
3393	74 Outperform	¥26.98B	11.13	―	4.36%	12.32%	10.42%
4072	73 Outperform	¥30.58B	14.61	―	2.22%	9.57%	315.38%
2349	72 Outperform	¥27.84B	9.67	―	1.21%	7.21%	0.30%
4725	65 Neutral	¥30.97B	10.75	10.34%	4.82%	-3.03%	38.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%