Science Arts, Inc. (4412) AI Stock Analysis

• Market Cap: ¥19.33B
• Dividend Yield: N/A
• Average Volume (3M): 86.77K
• Price to Earnings (P/E): 173.7
• Beta (1Y): 0.80
• Revenue Growth: 39.66%
• EPS Growth: N/A
• Country: JP
• Employees: 46
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 9.92
• Shares Outstanding: 8,219,500
• 10 Day Avg. Volume: 147,350
• 30 Day Avg. Volume: 86,766
• PEG Ratio: 0.00
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: 67 Neutral
• Price Target: ¥2,593.00 ▲(62.98% Upside)

The score is driven primarily by strong financial performance (growth, improving profitability, and robust cash flow). This is tempered by overheated technical conditions that increase near-term pullback risk and a very expensive valuation (high P/E), which limits upside unless growth remains exceptional.

Positive Factors

Revenue Growth

Consistent double-digit revenue growth reflects expanding adoption across schools, museums and corporate clients. Durable licensing and B2B contracts create recurring streams, while diversified channels (DTC, partnerships) support sustained top-line expansion over the medium term.

Improving Profitability

Gross and operating margins have materially improved, indicating stronger unit economics and tighter cost control. Higher margins from software and licensing models are more sustainable as scale grows, enabling reinvestment in products while preserving cash generation.

Cash Flow Strength

Significant free cash flow improvement and strong cash conversion enhance financial flexibility. Reliable cash generation supports organic growth, funds content and platform investments, and reduces reliance on external financing, improving long-term resilience.

Negative Factors

Limited Scale

A small headcount constrains capacity for simultaneous product development, enterprise sales and large installation projects across education, museums and corporate training. Limited staffing can slow feature rollout, partnership execution, and scalability over the medium term.

Asset Utilization Concerns

While leverage is low, flagged asset utilization suggests capital may not be optimally deployed. Suboptimal deployment can limit returns on invested capital and slow growth unless the company improves asset efficiency or reallocates resources to higher-return initiatives.

Revenue Concentration Risk

Heavy reliance on educational institutions and museum partnerships creates exposure to public budgets and grant cycles, which can be lumpy or constrained. This concentration raises the risk of uneven demand and slower revenue visibility across multi-quarter funding cycles.

Science Arts, Inc. Business Overview & Revenue Model

Company Description

Science Arts, Inc. provides cloud services and software products in Japan. It provides Buddycom, a seamless and scalable communication tool that brings team communications together. The company also offers accessories, such as speaker microphones, headsets, PTT buttons, and smartphones with a PTT button through online store. The company serves airline, railway, bus, logistic, security, construction, taxi, energy, broadcast, event, restaurant, retail, apparel, care, real estate, hotel, medical, manufacture, school, and corporate resilience industries. Science Arts, Inc. was incorporated in 2003 and is based in Tokyo, Japan.

How the Company Makes Money

Science Arts, Inc. generates revenue through multiple streams. Primarily, the company earns money by selling its educational software and interactive learning modules to schools, universities, and educational institutions, often through licensing agreements. Additionally, it profits from partnerships with museums and science centers, where it supplies multimedia exhibits and interactive displays. The company also engages in direct-to-consumer sales via its online platform, offering science-themed merchandise and educational kits. Furthermore, Science Arts, Inc. may collaborate with corporate clients to develop tailored training programs incorporating scientific principles, contributing a significant portion to its overall earnings.

Science Arts, Inc. Financial Statement Overview

Summary

Science Arts, Inc. demonstrates strong revenue growth but struggles with profitability and cash flow sustainability. The balance sheet is robust due to high liquidity, offset by a concerning operating efficiency. The company must address operational inefficiencies to convert revenue growth into profitability and enhance cash flow stability to support long-term growth.

Income Statement

The income statement shows a positive revenue growth trend with a CAGR of approximately 17% from 2020 to 2024. However, persistent negative EBIT and net income indicate ongoing operating challenges. Gross profit margins have been relatively stable, but the company has struggled to translate this into net profitability. The EBIT and EBITDA margins remain negative, highlighting efficiency and cost management issues.

Balance Sheet

The balance sheet reflects a strong liquidity position, with substantial cash reserves consistently exceeding total debt. The equity ratio is stable, indicating a solid capital structure. However, the debt-to-equity ratio has fluctuated, and recent increases in liabilities may pose a risk if not controlled. Overall, the company's financial position is stable, with a favorable equity buffer.

Cash Flow

Cash flow analysis reveals inconsistent free cash flow, affected by volatile operating cash flow and high capital expenditures. There has been a substantial improvement in operating cash flow from a significant negative figure in 2023 to a positive one in 2024, but free cash flow remains negative. The operating cash flow to net income ratio has improved, yet challenges in generating sustainable free cash flow persist.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.47B	1.65B	1.18B	771.86M	659.99M	365.99M
Gross Profit	907.78M	996.01M	677.77M	490.24M	435.36M	265.26M
EBITDA	75.64M	110.25M	-18.74M	-51.64M	15.30M	-93.55M
Net Income	39.34M	112.17M	-31.85M	-81.34M	9.01M	-95.29M
Balance Sheet
Total Assets	1.98B	2.09B	953.46M	894.09M	801.13M	351.35M
Cash, Cash Equivalents and Short-Term Investments	1.52B	1.58B	562.34M	504.76M	663.91M	260.53M
Total Debt	72.68M	67.23M	89.02M	0.00	0.00	0.00
Total Liabilities	660.09M	683.83M	477.00M	385.68M	230.52M	117.88M
Stockholders Equity	1.32B	1.39B	476.56M	508.41M	570.61M	233.46M
Cash Flow
Free Cash Flow	0.00	271.77M	-46.38M	-87.88M	95.79M	-98.44M
Operating Cash Flow	0.00	290.70M	1.15M	-66.92M	114.25M	-97.69M
Investing Cash Flow	0.00	-26.88M	-32.58M	-107.13M	-34.65M	-691.00K
Financing Cash Flow	0.00	753.10M	89.02M	14.90M	323.79M	-14.68M

Science Arts, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1591.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4412, the sentiment is Positive. The current price of 1591 is below the 20-day moving average (MA) of 1837.15, below the 50-day MA of 1697.40, and above the 200-day MA of 1309.38, indicating a bullish trend. The MACD of 179.19 indicates Negative momentum. The RSI at 74.50 is Negative, neither overbought nor oversold. The STOCH value of 89.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4412.

Science Arts, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4074	69 Neutral	¥5.51B	15.28	―	―	-3.20%	-39.38%
4412	67 Neutral	¥19.33B	173.68	―	―	39.66%	―
4019	66 Neutral	¥6.73B	35.47	―	0.49%	41.47%	104.50%
4168	64 Neutral	¥10.99B	13.40	―	0.70%	9.78%	-23.98%
4193	63 Neutral	¥11.20B	35.83	―	2.81%	12.49%	-57.87%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3853	61 Neutral	¥16.63B	14.63	―	0.82%	―	―