HITO-Communications Holdings, Inc. (4433) AI Stock Analysis

• Market Cap: ¥20.68B
• Dividend Yield: 3.18%
• Average Volume (3M): 104.87K
• Price to Earnings (P/E): 54.1
• Beta (1Y): 0.59
• Revenue Growth: 4.12%
• EPS Growth: 38.91%
• Country: JP
• Employees: 1,405
• Sector: Industrials
• Sector Strength: 76
• Industry: Staffing & Employment Services
• EPS (TTM): 15.48
• Shares Outstanding: 17,899,338
• 10 Day Avg. Volume: 72,970
• 30 Day Avg. Volume: 104,866
• PEG Ratio: N/A
• 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: ¥1,126.00
• Price Target Upside: -3.18% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 58 Neutral
• Price Target: ¥1,126.00 ▼(-3.18% Downside)

The overall score reflects significant financial challenges, with declining revenues and negative profitability. Despite these issues, strong technical indicators suggest bullish market sentiment, partially offsetting financial concerns. The stock is currently overvalued, which could limit upside potential.

HITO-Communications Holdings, Inc. Business Overview & Revenue Model

Company Description

HITO-Communications Holdings, Inc. is a Japan-based company that operates primarily in the human resources and outsourcing sectors. The company provides a wide range of services, including staffing solutions, outsourcing services, and customer relationship management (CRM) services. It caters to various industries, offering tailored human resource solutions designed to meet the specific needs of its clients. With a focus on delivering high-quality services, HITO-Communications Holdings aims to support businesses in optimizing their operations and enhancing customer interactions.

How the Company Makes Money

HITO-Communications Holdings, Inc. generates revenue through its diverse portfolio of services, primarily focusing on staffing and outsourcing. The company's key revenue streams include fees from temporary staffing services, where it places employees with client organizations and charges a fee based on the employee's salary and duration of placement. Additionally, it earns income from outsourcing services, where it takes over specific business functions or processes for clients, typically under contract agreements. The company also benefits from providing CRM services, which help businesses manage customer interactions and improve service delivery. These services are often structured as ongoing contracts, providing a steady stream of income. HITO-Communications Holdings' ability to maintain strong client relationships and adapt its offerings to meet market demands contributes significantly to its earnings.

HITO-Communications Holdings, Inc. Financial Statement Overview

Summary

HITO-Communications Holdings, Inc. is experiencing significant financial challenges with declining revenues, negative profitability, and reduced cash flow. Despite a stable balance sheet with good cash reserves and moderate leverage, the negative return on equity and shrinking operating cash flow are concerning. Strategic adjustments are required for improvement.

Income Statement

The company experienced a significant decline in revenue and profitability over the past year. The revenue decreased from 63,980 million JPY in 2023 to 58,547 million JPY in 2024, marking a -8.5% revenue growth rate. Net income turned negative in 2024 with a net loss of 44 million JPY, indicating challenges in maintaining profitability. The gross profit margin dropped from 22.24% in 2023 to 20.66% in 2024, and the EBIT margin decreased significantly from 6.56% to 2.66%. This suggests deteriorating operational efficiency and pressure on margins.

Balance Sheet

The company maintains a relatively stable balance sheet with a debt-to-equity ratio of 0.55, indicating moderate leverage. The equity ratio is healthy at 42.97%, reflecting strong equity funding. However, the return on equity has turned negative, aligning with the net loss incurred. The overall asset base has slightly decreased, but the company's cash reserves remain robust, providing a buffer against financial instability.

Cash Flow

The cash flow situation shows a mixed picture. Operating cash flow has declined significantly from 2,525 million JPY in 2023 to 980 million JPY in 2024, indicating reduced cash generation from core operations. Free cash flow also dropped from 1,832 million JPY in 2023 to 26 million JPY in 2024, showing limited cash available for expansion or debt reduction. The free cash flow to net income ratio is not meaningful due to negative net income.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	58.55B	63.98B	64.13B	84.22B	71.50B
Gross Profit	12.10B	14.24B	15.23B	14.72B	12.61B
EBITDA	2.58B	5.21B	6.60B	5.68B	4.07B
Net Income	-43.00M	1.89B	3.23B	2.77B	1.37B
Balance Sheet
Total Assets	40.10B	42.55B	34.23B	31.18B	27.48B
Cash, Cash Equivalents and Short-Term Investments	14.25B	16.46B	13.43B	9.81B	8.89B
Total Debt	9.53B	10.89B	4.15B	4.79B	5.39B
Total Liabilities	21.49B	23.47B	16.31B	16.24B	15.07B
Stockholders Equity	17.24B	17.87B	16.92B	14.08B	11.64B
Cash Flow
Free Cash Flow	26.00M	1.83B	4.86B	2.36B	3.41B
Operating Cash Flow	980.00M	2.52B	5.33B	3.06B	3.66B
Investing Cash Flow	-1.23B	-5.26B	-644.00M	-1.21B	-531.00M
Financing Cash Flow	-2.02B	5.70B	-1.16B	-1.00B	-1.30B

HITO-Communications Holdings, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1163.00
• 50DMA: Positive
• 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:4433, the sentiment is Positive. The current price of 1163 is above the 20-day moving average (MA) of 1158.70, above the 50-day MA of 1080.80, and above the 200-day MA of 940.93, indicating a bullish trend. The MACD of 22.53 indicates Positive momentum. The RSI at 63.87 is Neutral, neither overbought nor oversold. The STOCH value of 50.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4433.

HITO-Communications Holdings, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2163	80 Outperform	¥20.73B	16.13		4.31%	10.37%	23.00%
6539	79 Outperform	¥24.75B	23.82		5.69%	38.75%	-3.18%
6089	71 Outperform	¥22.49B	16.45		4.49%	0.73%	-35.91%
9332	71 Outperform	¥21.39B	13.07		3.37%	3.05%	-22.47%
2410	67 Neutral	¥11.91B	11.27		3.91%	4.17%	12.22%
Sector *	64 Neutral	$10.95B	16.37	8.81%	1.96%	2.68%	-15.33%
4433	58 Neutral	¥20.68B	54.13		3.18%	4.12%	38.91%