D.I.System Co.,Ltd. (4421) AI Stock Analysis

• Market Cap: ¥2.77B
• Dividend Yield: 2.98%
• Average Volume (3M): 4.19K
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.31
• Revenue Growth: 5.74%
• EPS Growth: 5.97%
• Country: JP
• Employees: 735
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 27.32
• Shares Outstanding: 3,059,000
• 10 Day Avg. Volume: 7,310
• 30 Day Avg. Volume: 4,186
• PEG Ratio: -850.30
• Price to Book (P/B): 1.72
• Price to Sales (P/S): 0.36
• P/FCF Ratio: 21.47
• 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: 72 Outperform
• Price Target: ¥1,073.00 ▲(12.12% Upside)

D.I.System Co.,Ltd. scores well due to its strong financial performance and attractive valuation. The company's robust revenue growth and profitability margins are significant strengths. However, technical analysis indicates potential short-term weakness, which slightly offsets the positive financial and valuation aspects.

Positive Factors

Revenue Growth

Strong revenue growth indicates effective market penetration and product demand, supporting long-term business expansion and competitive positioning.

Profitability Margins

Robust profitability margins reflect efficient operations and cost management, enhancing the company's ability to reinvest in growth and innovation.

Balance Sheet Health

A healthy balance sheet with low leverage and strong ROE provides financial stability and flexibility, enabling strategic investments and resilience against economic fluctuations.

Negative Factors

Cash Flow Volatility

Volatility in cash flow can hinder the company's ability to fund operations and growth initiatives, potentially impacting long-term financial health and strategic execution.

Cash Generation

While operating cash flow is positive, the ratio indicates a need for improved cash conversion efficiency to ensure sustainable funding for business operations and growth.

Free Cash Flow

Lack of free cash flow generation limits the company's ability to invest in new projects and return capital to shareholders, posing a risk to long-term growth prospects.

D.I.System Co.,Ltd. Business Overview & Revenue Model

Company Description

D. I. System Co., Ltd. engages in the system integration, education, and security solutions businesses in Japan and internationally. It offers system development, network and platform construction, Microsoft, enhanced security, sales/service outsourcing, IT education/qualification acquisition, stress check services, and telework promotion services. The company also provides e-learning system, framework and workflow, Web performer, and targeted mail training services. In addition, it designs and develops business applications to customer operations, such as sales management, customer management, purchasing management, and production management. Further, the company provides infrastructure system design and construction work; and operation and maintenance of business applications and infrastructure systems, such as system operation monitoring, data input and analysis, maintenance development, and equipment maintenance. Additionally, it offers education services, which includes IT training planning and consulting, training program development, and training services; user support services; and develops, sells, installs, and maintains security products that collect logs of server and database operations. The company was incorporated in 1997 and is headquartered in Tokyo, Japan.

How the Company Makes Money

D.I.System Co., Ltd. generates revenue through multiple streams, including direct sales of its software products, licensing agreements, and subscription-based models for its cloud services. The company also earns income from consulting services related to system integration and implementation of its solutions, which often includes ongoing support and maintenance contracts. Significant partnerships with other technology firms and industry players enhance its market reach and contribute to its earnings by enabling collaborative projects and bundled service offerings.

D.I.System Co.,Ltd. Financial Statement Overview

Summary

D.I.System Co.,Ltd. demonstrates strong financial performance with impressive revenue growth and robust profitability margins. The balance sheet is stable with low leverage and strong ROE. However, cash flow volatility presents a potential risk.

Income Statement

D.I.System Co.,Ltd. has shown impressive revenue growth, with a 31.12% increase from 2022 to 2023 and a 10.67% increase from 2021 to 2022. The company maintains a strong gross profit margin of 19.72% for the TTM period and a net profit margin of 3.44%. EBIT and EBITDA margins are robust at 4.91% and 5.57% respectively, indicating efficient operations and solid profitability.

Balance Sheet

The company's financial stability is supported by a low debt-to-equity ratio of 0.03 for TTM and a healthy equity ratio of 51.46%. Return on Equity (ROE) is strong at 16.59% for TTM, demonstrating effective use of equity to generate profits. The company has substantial cash reserves relative to its debt, enhancing its financial flexibility.

Cash Flow

D.I.System Co.,Ltd. has experienced volatility in cash flow metrics, with a decline in free cash flow growth in the TTM period due to zero reported free cash flow. However, the company has maintained a positive operating cash flow to net income ratio of 0.72 in 2023, indicating decent cash generation relative to its profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.09B	6.83B	6.24B	5.50B	4.66B	4.28B
Gross Profit	1.42B	1.34B	1.33B	1.18B	939.49M	789.86M
EBITDA	393.62M	403.59M	396.77M	331.06M	242.15M	129.42M
Net Income	234.80M	241.78M	240.98M	194.93M	149.23M	77.86M
Balance Sheet
Total Assets	3.18B	2.89B	2.77B	2.46B	2.06B	1.76B
Cash, Cash Equivalents and Short-Term Investments	1.08B	1.07B	1.10B	900.92M	888.42M	736.47M
Total Debt	8.46M	58.43M	125.05M	191.67M	0.00	9.48M
Total Liabilities	1.64B	1.45B	1.51B	1.40B	1.00B	853.36M
Stockholders Equity	1.54B	1.44B	1.26B	1.06B	1.02B	910.85M
Cash Flow
Free Cash Flow	0.00	115.50M	314.27M	185.79M	171.71M	209.33M
Operating Cash Flow	0.00	173.77M	323.86M	190.38M	191.55M	309.45M
Investing Cash Flow	0.00	-74.90M	-10.91M	-69.99M	-19.41M	-113.71M
Financing Cash Flow	0.00	-130.54M	-109.63M	-107.89M	-45.71M	-88.22M

D.I.System Co.,Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 957.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4421, the sentiment is Negative. The current price of 957 is above the 20-day moving average (MA) of 949.55, below the 50-day MA of 969.74, and above the 200-day MA of 929.95, indicating a bearish trend. The MACD of -20.77 indicates Positive momentum. The RSI at 34.49 is Neutral, neither overbought nor oversold. The STOCH value of 24.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4421.

D.I.System Co.,Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7046	74 Outperform	¥3.33B	29.28	―	0.62%	12.15%	-33.34%
2323	73 Outperform	¥5.52B	21.80	―	―	103.49%	620.98%
4421	72 Outperform	¥2.77B	10.28	―	2.98%	5.74%	5.97%
3970	66 Neutral	¥2.61B	―	―	4.13%	15.64%	-268.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5618	46 Neutral	¥3.18B	―	―	―	23.63%	64.65%
4427	41 Neutral	¥3.44B	-3.47	―	―	-12.77%	―