Nippon RAD Inc. (4736) AI Stock Analysis

• Market Cap: ¥3.74B
• Dividend Yield: 1.41%
• Average Volume (3M): 12.45K
• Price to Earnings (P/E): 9.7
• Beta (1Y): 1.04
• Revenue Growth: 9.35%
• EPS Growth: 28.40%
• Country: JP
• Employees: 270
• Sector: Technology
• Sector Strength: 81
• Industry: Information Technology Services
• EPS (TTM): 9.01
• Shares Outstanding: 5,355,390
• 10 Day Avg. Volume: 8,660
• 30 Day Avg. Volume: 12,453
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥800.00
• Price Target Upside: 11.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 72 Outperform
• Price Target: ¥800.00 ▲(11.58% Upside)

Nippon RAD Inc. has a strong financial foundation with impressive revenue growth and profitability, supported by a robust balance sheet. However, technical indicators suggest bearish momentum, and cash flow challenges present potential risks. The stock's reasonable valuation and modest dividend yield add to its appeal.

Nippon RAD Inc. Business Overview & Revenue Model

Company Description

Nippon RAD Inc. (4736) is a Japanese-based company primarily engaged in the provision of information technology (IT) services. The company develops and delivers comprehensive IT solutions, including software development, system integration, and network services. It caters to a variety of sectors including finance, manufacturing, and public services, offering customized solutions that enhance operational efficiency and business performance for its clients.

How the Company Makes Money

Nippon RAD Inc. generates revenue through its diverse range of IT services and solutions. Its primary revenue streams include fees from software development projects, where the company designs and implements tailored software applications for clients. System integration services also contribute significantly, involving the integration of various IT systems and software applications into a cohesive whole. Additionally, the company earns income from providing ongoing network services and maintenance, ensuring the smooth operation and management of clients' IT infrastructures. Nippon RAD Inc. may also engage in strategic partnerships with technology providers to enhance its service offerings and reach a broader client base, further contributing to its revenue.

Nippon RAD Inc. Financial Statement Overview

Summary

Nippon RAD Inc. demonstrates strong financial health with robust revenue growth and profitability, supported by a solid balance sheet with minimal leverage. However, cash flow challenges, particularly in free cash flow generation, pose a potential risk.

Income Statement

Nippon RAD Inc. shows strong revenue growth with a TTM growth rate of 17.8%, indicating robust demand for its services. The company maintains healthy profitability with a gross profit margin of 25.3% and a net profit margin of 9.6% in the TTM. EBIT and EBITDA margins are also solid at 9.4% and 11.0%, respectively, reflecting efficient operations. However, the slight decline in gross profit from the previous period suggests potential cost pressures.

Balance Sheet

The balance sheet is very strong, with a minimal debt-to-equity ratio of 0.0006, indicating low leverage and financial risk. The return on equity is impressive at 13.2%, showcasing effective use of shareholder funds. The equity ratio stands at 70.0%, highlighting a stable financial structure with significant equity backing.

Cash Flow

Cash flow performance is mixed. While operating cash flow is positive, the free cash flow has declined significantly, with a negative growth rate of -361.4% in the TTM. The operating cash flow to net income ratio is low at 0.16, suggesting potential issues in converting income to cash. The free cash flow to net income ratio is negative, indicating challenges in generating free cash flow from earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.36B	4.36B	3.98B	3.56B	3.31B	3.01B
Gross Profit	1.06B	1.10B	938.61M	701.69M	611.22M	425.04M
EBITDA	451.44M	456.84M	373.73M	206.04M	85.37M	-130.51M
Net Income	386.16M	417.17M	327.92M	140.68M	19.11M	-178.02M
Balance Sheet
Total Assets	4.85B	4.94B	4.30B	4.11B	4.03B	4.04B
Cash, Cash Equivalents and Short-Term Investments	2.54B	2.18B	2.25B	2.49B	2.68B	2.92B
Total Debt	958.00K	2.13M	3.04M	123.93M	244.81M	360.00M
Total Liabilities	1.45B	1.55B	1.37B	1.49B	1.49B	1.50B
Stockholders Equity	3.40B	3.39B	2.93B	2.62B	2.54B	2.53B
Cash Flow
Free Cash Flow	169.99M	-56.63M	316.20M	-47.01M	160.63M	-57.06M
Operating Cash Flow	361.23M	139.30M	375.68M	1.99M	194.13M	26.27M
Investing Cash Flow	-190.09M	-183.49M	-436.82M	-3.41M	-292.52M	-54.88M
Financing Cash Flow	-53.30M	-26.01M	-172.72M	-186.21M	-146.90M	-145.48M

Nippon RAD Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 717.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4736, the sentiment is Negative. The current price of 717 is above the 20-day moving average (MA) of 716.25, below the 50-day MA of 739.76, and below the 200-day MA of 740.89, indicating a bearish trend. The MACD of -9.06 indicates Negative momentum. The RSI at 38.83 is Neutral, neither overbought nor oversold. The STOCH value of 4.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4736.

Nippon RAD Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5250	74 Outperform	¥3.55B	26.90		1.99%	―	―
4736	72 Outperform	¥3.74B	9.69		1.41%	9.35%	28.40%
4450	69 Neutral	¥6.29B	15.00		1.16%	21.32%	6.83%
4068	65 Neutral	¥3.69B	37.45		―	17.03%	642.80%
3682	63 Neutral	¥4.04B	18.38		3.29%	2.04%	-3.43%
Sector *	61 Neutral	$35.56B	9.00	-10.49%	1.86%	8.45%	-8.32%
4416	58 Neutral	¥4.20B	1,249.30		―	-0.93%	-97.16%