eSOL Co., Ltd. (4420) AI Stock Analysis

• Market Cap: ¥9.60B
• Dividend Yield: 1.57%
• Average Volume (3M): 20.21K
• Price to Earnings (P/E): 15.5
• Beta (1Y): 1.41
• Revenue Growth: 23.68%
• EPS Growth: 577.69%
• Country: JP
• Employees: 523
• Sector: Technology
• Sector Strength: 82
• Industry: Technology Distributors
• EPS (TTM): 5.91
• Shares Outstanding: 20,000,000
• 10 Day Avg. Volume: 21,500
• 30 Day Avg. Volume: 20,210
• PEG Ratio: 0.17
• Price to Book (P/B): 3.11
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 220.71
• 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

• Rating: 71 Outperform
• Price Target: ―

eSOL Co., Ltd. has a solid financial foundation with strong revenue growth and profitability, supported by a robust balance sheet with no debt liabilities. However, historical cash flow volatility presents a risk that could affect long-term performance. Technical indicators suggest moderate momentum and possible overbought conditions. Valuation metrics show potential undervaluation, making it an intriguing investment opportunity.

eSOL Co., Ltd. Business Overview & Revenue Model

Company Description

eSOL Co., Ltd. is a Japanese technology company specializing in real-time embedded software solutions. The company operates in sectors such as automotive, industrial automation, and consumer electronics, offering a range of products and services including real-time operating systems (RTOS), development tools, and middleware solutions. eSOL focuses on providing robust and reliable software that enhances the performance and functionality of embedded systems.

How the Company Makes Money

eSOL Co., Ltd. generates revenue primarily through the licensing of its real-time operating systems and middleware solutions to manufacturers and developers in various industries. The company also offers consulting services, technical support, and custom software development, which contribute to its income. Key revenue streams include software licensing fees, service contracts, and project-based custom development fees. Partnerships with hardware manufacturers and technology firms help eSOL extend its market reach and integrate its solutions into a wide array of embedded systems, further bolstering its earnings.

eSOL Co., Ltd. Financial Statement Overview

Summary

eSOL Co., Ltd. presents a strong financial position with excellent revenue growth and improved profitability metrics. The balance sheet is solid with no debt, enhancing stability and reducing risk. However, the cash flow statement reveals some historical inconsistencies that need attention for sustained long-term performance.

Income Statement

eSOL Co., Ltd. has demonstrated strong revenue growth, with a notable increase of 23.69% from 2023 to 2024. The company has recovered from previous years of low profitability to achieve a healthy gross profit margin of 37% and a net profit margin of 7.49% in 2024. The EBIT margin also improved significantly to 9.35%, indicating better operational efficiency. However, past volatility in earnings and a recent negative EBIT margin in 2023 highlight some concerns about consistency.

Balance Sheet

The company's balance sheet is robust, with a strong equity base, as shown by a rising equity ratio of approximately 71.37% in 2024. eSOL has no debt, which eliminates leverage-related risks and supports financial stability. The return on equity has improved to 17.89%, reflecting efficient use of equity to generate profits. The high cash reserves further bolster the company's financial health.

Cash Flow

eSOL Co., Ltd. has seen a substantial improvement in free cash flow, which grew significantly from -161 million JPY in 2023 to 1,061 million JPY in 2024. This turnaround reflects better cash management and operational efficiency. However, the volatile historical operating cash flow and negative figures in recent years raise concerns about consistency in cash generation.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.91B	9.63B	8.87B	8.94B	9.04B
	Gross Profit
4.41B	3.30B	2.93B	2.80B	3.20B
	EBIT
1.11B	-82.16M	-353.81M	72.68M	682.51M
	EBITDA
1.21B	20.00M	-274.00M	145.68M	762.42M
	Net Income Common Stockholders
892.39M	136.72M	-357.83M	200.70M	676.28M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.27B	3.50B	3.98B	4.22B	4.67B
	Total Assets
6.99B	7.64B	7.21B	7.28B	7.47B
	Total Debt
0.00	0.00	0.00	0.00	0.00
	Net Debt
-3.27B	-3.39B	-3.98B	-4.02B	-4.46B
	Total Liabilities
2.00B	1.97B	1.80B	1.51B	1.72B
	Stockholders Equity
4.99B	5.66B	5.41B	5.78B	5.75B
Cash Flow		Free Cash Flow
1.04B	-161.09M	76.17M	-329.86M	912.70M
	Operating Cash Flow
1.10B	-140.97M	161.40M	-199.71M	1.06B
	Investing Cash Flow
-29.04M	-232.60M	-89.59M	-137.39M	-353.44M
	Financing Cash Flow
-1.29B	-112.40M	-111.61M	-111.47M	-141.53M

eSOL Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 508.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4420, the sentiment is Negative. The current price of 508 is below the 20-day moving average (MA) of 523.45, below the 50-day MA of 542.62, and below the 200-day MA of 635.08, indicating a bearish trend. The MACD of -12.05 indicates Negative momentum. The RSI at 42.75 is Neutral, neither overbought nor oversold. The STOCH value of 32.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4420.

eSOL Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6701	77 Outperform	$5.56T	31.13	8.97%	0.68%	-1.55%	17.21%
3626	74 Outperform	¥1.12T	22.33		1.50%	4.13%	5.65%
6702	74 Outperform	¥6.27T	28.20	11.70%	0.82%	-5.48%	-10.98%
4420	71 Outperform	¥9.60B	15.48		1.57%	23.68%	577.69%
9684	70 Outperform	$1.23T	50.67	7.32%	0.83%	0.58%	-56.67%
Sector *	69 Neutral	¥226.56B	14.56	7.65%	2.68%	9.09%	8.68%
4755	58 Neutral	$1.75T	―	-22.97%	―	10.38%	38.09%