Vario Secure, Inc. (4494) AI Stock Analysis

• Market Cap: ¥3.24B
• Dividend Yield: N/A
• Average Volume (3M): 37.56K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.61
• Revenue Growth: 1.62%
• EPS Growth: 9.93%
• Country: JP
• Employees: 74
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 16.93
• Shares Outstanding: 4,522,961
• 10 Day Avg. Volume: 19,420
• 30 Day Avg. Volume: 37,556
• PEG Ratio: -4.63
• Price to Book (P/B): 0.43
• Price to Sales (P/S): 0.96
• P/FCF Ratio: 8.54
• 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: 64 Neutral
• Price Target: ¥767.00 ▲(3.23% Upside)
• Action: Downgraded Date: 03/24/26
• Date: Action: Downgraded 03/24/26

The score is supported primarily by solid financial fundamentals—rapid TTM revenue growth, healthy margins, and low leverage—plus a relatively low P/E. These are meaningfully offset by weak technical conditions, with the stock trading below all key moving averages and negative momentum indicators.

Positive Factors

Revenue Acceleration

Sustained acceleration in trailing-twelve-month revenue implies stronger product demand and better market penetration versus recent annual periods. Durable top-line momentum supports scale economics, reinvestment capacity and the ability to fund longer‑term initiatives over the next 2–6 months.

Strong Profitability Margins

High gross and operating margins indicate persistent pricing power and efficient software/infrastructure economics. Margin strength underpins cash generation, funds R&D or sales expansion, and provides resilience to moderate cost cyclical pressures over a multi‑month horizon.

Conservative, Improving Leverage

Material reduction in leverage to a low debt-to-equity level improves financial flexibility and lowers interest burden. A stronger balance sheet supports capital allocation optionality—investment, M&A or defensive buffer—making strategic execution more durable in the medium term.

Negative Factors

Margin Compression vs Prior Peaks

Profitability has softened from prior peak margins, reducing incremental cash available from revenue. If compression reflects lasting cost inflation, competitive pricing pressure, or mix shift, it could constrain operating leverage and shareholder returns over coming quarters.

Cash-Conversion Variability

Intermittent weakness in operating cash relative to net income points to working-capital swings or timing issues that reduce free cash flow predictability. That variability can limit consistent reinvestment, dividends or opportunistic spending over a 2–6 month horizon.

Declining Return on Equity (Efficiency)

A meaningful drop in ROE signals lower capital efficiency versus prior years, possibly from margin erosion or faster equity growth. Persistently lower ROE can impair long-term shareholder value creation and constrain the company’s ability to fund growth from internal returns.

Vario Secure, Inc. Business Overview & Revenue Model

Company Description

Vario Secure Inc. provides managed security services and network security appliance sales services. The company's managed security services include integrated security equipment and operation and maintenance systems; and integration services, such as design, procurement, installation, and configuration of security equipment. Vario Secure Inc. was founded in 2001 and is headquartered in Tokyo, Japan.

Vario Secure, Inc. Financial Statement Overview

Summary

Strong TTM revenue growth (~+168%) with solid profitability (~52% gross margin, ~13% net margin) and a conservative, improving balance sheet (low debt-to-equity ~0.17). Offsets include margin compression versus 2021–2022 and only moderate ROE (~6%), while cash flow is positive but conversion trails operating profits (OCF/EBIT ~0.74; FCF ~86% of net income).

Income Statement

TTM (Trailing-Twelve-Months) revenue shows a sharp acceleration (up ~168% vs. the prior period provided), while profitability remains solid with ~52% gross margin and ~13% net margin. That said, margins are notably below earlier annual levels (net margin was ~19% in 2021–2022), indicating profitability compression and a less favorable earnings mix than a few years ago.

Balance Sheet

Leverage looks conservative and improving: total debt is down versus prior years and the debt-to-equity level is low in TTM (Trailing-Twelve-Months) (~0.17), providing balance-sheet flexibility. The main offset is moderate returns on equity (~6% TTM), which are weaker than the double-digit levels seen in 2021–2022 and suggest current profitability is not translating into standout shareholder returns.

Cash Flow

Cash generation is healthy in TTM (Trailing-Twelve-Months) with positive operating cash flow and free cash flow, and free cash flow is strongly higher versus the prior annual period provided. However, cash conversion is not perfect: operating cash flow is below EBIT (coverage ~0.74) and free cash flow runs at ~86% of net income, indicating some working-capital or reinvestment drag despite overall positive cash production.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	2.78B	2.67B	2.64B	2.63B	2.57B	2.55B
Gross Profit	1.43B	1.31B	1.40B	1.32B	1.52B	1.49B
EBITDA	742.93M	690.80M	705.88M	757.36M	877.42M	881.86M
Net Income	372.42M	342.23M	347.60M	383.32M	500.48M	491.53M
Balance Sheet
Total Assets	7.78B	7.65B	7.74B	7.92B	7.12B	7.22B
Cash, Cash Equivalents and Short-Term Investments	879.29M	759.91M	822.30M	1.04B	389.85M	593.93M
Total Debt	1.05B	1.17B	1.33B	1.50B	1.82B	2.26B
Total Liabilities	1.60B	1.76B	2.19B	2.54B	2.80B	3.27B
Stockholders Equity	6.18B	5.89B	5.55B	5.38B	4.32B	3.95B
Cash Flow
Free Cash Flow	444.24M	298.96M	348.71M	496.04M	477.36M	509.42M
Operating Cash Flow	517.31M	359.54M	414.90M	522.29M	490.21M	524.23M
Investing Cash Flow	-121.52M	-125.48M	-173.91M	-138.67M	-108.29M	-112.21M
Financing Cash Flow	-296.62M	-296.44M	-458.65M	266.50M	-586.14M	-450.32M

Vario Secure, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 743.00
• 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:4494, the sentiment is Negative. The current price of 743 is below the 20-day moving average (MA) of 747.10, below the 50-day MA of 758.48, and below the 200-day MA of 781.95, indicating a bearish trend. The MACD of -6.78 indicates Positive momentum. The RSI at 40.20 is Neutral, neither overbought nor oversold. The STOCH value of 39.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4494.

Vario Secure, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4493	74 Outperform	¥16.37B	17.99	―	0.17%	31.39%	13.12%
3040	73 Outperform	¥32.04B	16.59	19.71%	3.09%	3.44%	79.35%
4704	71 Outperform	¥695.22B	24.78	29.21%	2.57%	1.91%	44.78%
4475	68 Neutral	¥30.32B	27.58	―	0.39%	30.59%	65.14%
4494	64 Neutral	¥3.24B	11.25	―	―	1.62%	9.93%
4417	63 Neutral	¥35.64B	29.03	―	0.90%	25.06%	37.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%