Science Arts, Inc. (4412) AI Stock Analysis

• Market Cap: ¥15.09B
• Dividend Yield: N/A
• Average Volume (3M): 86.77K
• Price to Earnings (P/E): 69.5
• Beta (1Y): 0.87
• Revenue Growth: 39.66%
• EPS Growth: N/A
• Country: JP
• Employees: 46
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 5.89
• Shares Outstanding: 8,230,000
• 10 Day Avg. Volume: 147,350
• 30 Day Avg. Volume: 86,766
• PEG Ratio: -0.27
• Price to Book (P/B): 8.49
• Price to Sales (P/S): 7.15
• P/FCF Ratio: 43.54
• 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: 58 Neutral
• Price Target: ¥1,938.00 ▲(21.81% Upside)
• Action: Downgraded Date: 03/24/26
• Date: Action: Downgraded 03/24/26

The score is supported primarily by improving fundamentals (revenue acceleration, profitability turnaround, and a conservative balance sheet), but is materially reduced by weak technical momentum (price below key moving averages with negative MACD) and an elevated P/E with no dividend yield data.

Positive Factors

Revenue & Margin Improvement

The company reported double-digit revenue growth and a return to net profitability alongside improved EBIT/EBITDA margins. Sustained top-line expansion combined with margin recovery supports durable earnings power, funds reinvestment into products, and enhances long-term cash generation ability.

Free Cash Flow Expansion

Material improvement in free cash flow and strong cash conversion indicate the business can self-fund growth, reduce reliance on external financing, and weather cyclical pressures. Reliable cash generation underpins capex, R&D, and working capital for sustainable expansion.

Conservative Balance Sheet

A low-leverage capital structure with improving ROE provides financial flexibility and resilience. Conservative balance sheet reduces solvency risk, supports strategic investment or M&A optionality, and helps maintain stability through industry cycles.

Negative Factors

Limited Scale & Headcount

A small workforce limits capacity to scale product development, enterprise sales, and large institutional deployments. Over the medium term this can constrain revenue diversification, slow time-to-market for new offerings, and increase execution risk on larger contracts.

Asset Utilization Risk

The balance sheet note flags asset utilization as an area to monitor. If assets are not efficiently deployed, returns and ROA could lag peers, necessitating incremental capex or restructuring. Poor utilization would pressure margins and limit capital efficiency over months.

Limited Public Guidance & Disclosures

The absence of formal guidance and empty earnings highlights reduces forward visibility for stakeholders and partners. Over 2-6 months this transparency gap can complicate planning, heighten perceived execution risk, and make it harder to secure larger institutional clients or partnerships.

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.

Science Arts, Inc. Financial Statement Overview

Summary

Strong turnaround: accelerating revenue growth and a return to positive operating profit and net income in 2025, supported by a conservative, low-leverage balance sheet. Offsetting this, profitability and cash generation were volatile in prior years and margins remain modest, so durability of the improvement is the key risk.

Income Statement

Revenue growth has been strong and accelerating over the period, culminating in a sharp step-up in the latest annual report (2025-08-31) with solid positive growth. Profitability has also inflected meaningfully: after multi-year losses (2020–2024), the company returned to positive operating profit and net income in 2025 with a mid-single-digit net margin. Offsetting this, profitability has been volatile historically and margins remain modest versus the company’s earlier gross margin profile, indicating execution risk if growth slows.

Balance Sheet

The balance sheet looks conservative with very low leverage in the latest annual report: debt is small relative to equity and the debt burden has come down materially from 2020/2024 levels. Equity has expanded substantially, supporting a much larger asset base and improving financial flexibility. The key watch-out is that returns on equity were negative for several years before turning positive in 2025, highlighting that the improved profitability is still relatively new and needs to prove durable.

Cash Flow

Cash generation improved dramatically in the latest annual report, with strong operating cash flow and positive free cash flow that is broadly in line with net income, signaling better earnings quality. However, cash flow performance has been inconsistent: operating cash flow was negative in 2020–2021, negative again in 2023, and near-zero in 2024, which suggests working-capital or profitability swings can materially impact cash conversion.

Breakdown	Aug 2025	Aug 2024	Aug 2023	Aug 2022	Aug 2021
Income Statement
Total Revenue	1.65B	1.18B	771.86M	659.99M	365.99M
Gross Profit	996.01M	677.77M	490.24M	435.36M	265.26M
EBITDA	110.25M	-18.74M	-51.64M	15.30M	-93.55M
Net Income	112.17M	-31.85M	-81.34M	9.01M	-95.29M
Balance Sheet
Total Assets	2.09B	960.74M	894.09M	801.13M	351.90M
Cash, Cash Equivalents and Short-Term Investments	1.58B	562.34M	504.76M	663.91M	260.53M
Total Debt	67.23M	89.02M	0.00	0.00	0.00
Total Liabilities	694.97M	484.17M	385.68M	230.52M	118.44M
Stockholders Equity	1.39B	476.56M	508.41M	570.61M	233.46M
Cash Flow
Free Cash Flow	271.77M	-46.38M	-87.88M	95.79M	-98.44M
Operating Cash Flow	290.70M	1.15M	-66.92M	114.25M	-97.69M
Investing Cash Flow	-26.88M	-32.58M	-107.13M	-34.65M	-691.00K
Financing Cash Flow	753.10M	89.02M	14.90M	323.79M	-14.68M

Science Arts, Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1591.00
• 50DMA: Negative
• 100DMA: Positive
• 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:4412, the sentiment is Neutral. The current price of 1591 is below the 20-day moving average (MA) of 2185.15, below the 50-day MA of 2276.26, and below the 200-day MA of 1633.90, indicating a neutral trend. The MACD of -60.27 indicates Positive momentum. The RSI at 39.02 is Neutral, neither overbought nor oversold. The STOCH value of 30.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4412.

Science Arts, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3835	75 Outperform	¥18.38B	30.80	―	3.14%	0.50%	-2.92%
3648	74 Outperform	¥19.48B	11.79	―	2.40%	21.57%	129.44%
3853	69 Neutral	¥19.64B	12.24	―	0.82%	―	―
9553	68 Neutral	¥22.40B	15.25	―	―	14.28%	-30.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4412	58 Neutral	¥15.09B	69.50	―	―	39.66%	―
5027	49 Neutral	¥25.58B	39.28	―	―	20.84%	10.41%