Scala, Inc. (4845) AI Stock Analysis

• Market Cap: ¥6.96B
• Dividend Yield: 4.21%
• Average Volume (3M): 42.30K
• Price to Earnings (P/E): 6.9
• Beta (1Y): 0.29
• Revenue Growth: -25.27%
• EPS Growth: N/A
• Country: JP
• Employees: 529
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 25.77
• Shares Outstanding: 17,761,860
• 10 Day Avg. Volume: 45,680
• 30 Day Avg. Volume: 42,300
• PEG Ratio: -0.06
• Price to Book (P/B): 1.55
• Price to Sales (P/S): 0.91
• P/FCF Ratio: 14.53
• 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: ¥410.00
• Price Target Upside: 4.59% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 58 Neutral
• Price Target: ¥410.00 ▲(4.59% Upside)

Scala, Inc.'s overall stock score reflects a mixed outlook. The most significant factor is the company's financial performance, which shows improvements in profitability but challenges in revenue and cash flow. Technical analysis indicates bearish momentum, which could pose risks. However, the stock's attractive valuation with a low P/E ratio and high dividend yield provides a potential opportunity for value investors.

Scala, Inc. Business Overview & Revenue Model

Company Description

Scala, Inc. (4845) is a technology company specializing in digital signage solutions and interactive display systems. The company operates primarily in the digital media sector, providing innovative software and hardware solutions designed to enhance communication and engagement in various environments, such as retail, transportation, and corporate settings. Scala's core products include content management systems, multimedia players, and customizable display hardware that enable businesses to deliver dynamic content and improve customer experiences.

How the Company Makes Money

Scala, Inc. generates revenue primarily through the sale of its software licenses, hardware products, and ongoing support services. The company offers subscription-based models for its content management systems, allowing clients to access continuous updates and technical support. Additionally, Scala partners with hardware manufacturers and digital signage integrators to expand its market reach, which contributes to its revenue through shared sales agreements and joint marketing initiatives. The increasing demand for digital signage in various industries, along with a focus on innovation and customer experience, further enhances Scala's revenue potential.

Scala, Inc. Financial Statement Overview

Summary

Scala, Inc. shows a mixed financial performance. While profitability has improved with a positive net profit margin and reduced leverage, the company faces challenges in revenue growth and cash flow generation. The strong gross profit margin indicates effective cost management, but operational efficiency and cash flow conversion need enhancement.

Income Statement

Scala, Inc. has shown a mixed performance in its income statement. The company experienced a significant revenue decline of 14.79% in the most recent year, indicating potential challenges in maintaining its market position. However, the gross profit margin remains relatively healthy at 48.32%, suggesting effective cost management. The net profit margin improved to 12.01% from a negative position in the previous year, reflecting a turnaround in profitability. Despite these improvements, the EBIT and EBITDA margins are modest at 9.19% and 12.87%, respectively, indicating room for operational efficiency enhancements.

Balance Sheet

The balance sheet of Scala, Inc. reflects a moderate financial position. The debt-to-equity ratio has improved to 0.88 from 1.43, indicating a reduction in leverage and a stronger equity base. Return on equity is positive at 20.45%, showcasing effective utilization of shareholder funds. However, the equity ratio stands at 46.98%, suggesting a balanced but cautious approach to asset financing. The company has made strides in reducing debt, but maintaining this trajectory is crucial for long-term stability.

Cash Flow

Scala, Inc.'s cash flow statement reveals challenges in cash generation. The free cash flow growth rate is negative at -22.79%, indicating a decline in cash available for reinvestment or debt reduction. The operating cash flow to net income ratio is relatively low at 0.17, suggesting limited cash conversion efficiency. However, the free cash flow to net income ratio is healthier at 0.87, indicating that a significant portion of net income is being converted into free cash flow. Improving cash flow generation remains a key area for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.18B	8.18B	10.71B	11.84B	9.57B	8.73B
Gross Profit	3.95B	3.95B	4.56B	4.47B	3.63B	3.64B
EBITDA	1.05B	1.05B	-1.47B	1.22B	497.24M	843.37M
Net Income	982.30M	982.00M	-2.89B	-218.58M	-523.04M	3.07B
Balance Sheet
Total Assets	10.22B	10.22B	12.70B	18.32B	20.82B	20.33B
Cash, Cash Equivalents and Short-Term Investments	4.59B	4.59B	6.82B	7.74B	9.63B	9.81B
Total Debt	4.20B	4.20B	6.19B	7.89B	9.25B	8.58B
Total Liabilities	5.39B	5.39B	8.13B	10.23B	11.81B	9.86B
Stockholders Equity	4.80B	4.80B	4.34B	7.83B	8.69B	10.16B
Cash Flow
Free Cash Flow	512.01M	512.00M	152.34M	392.66M	1.85B	-49.99M
Operating Cash Flow	589.45M	589.00M	251.77M	601.36M	2.05B	720.81M
Investing Cash Flow	779.37M	778.00M	161.98M	-214.87M	-1.89B	4.43B
Financing Cash Flow	-3.60B	-3.60B	-1.35B	-2.25B	-339.02M	-3.16B

Scala, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 392.00
• 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:4845, the sentiment is Negative. The current price of 392 is below the 20-day moving average (MA) of 406.35, below the 50-day MA of 417.50, and below the 200-day MA of 401.53, indicating a bearish trend. The MACD of -6.91 indicates Positive momentum. The RSI at 34.70 is Neutral, neither overbought nor oversold. The STOCH value of 20.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4845.

Scala, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2303	80 Outperform	¥7.80B	18.96	―	0.99%	-0.69%	-6.98%
5029	69 Neutral	¥4.54B	26.55	―	―	30.72%	―
4476	68 Neutral	¥7.12B	73.36	―	―	14.20%	-57.38%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5259	60 Neutral	¥9.40B	42.03	―	0.46%	12.37%	199.06%
4845	58 Neutral	¥6.96B	6.93	―	4.21%	-25.27%	―

Scala, Inc. Corporate Events

Scala, Inc. Completes Share Transfer of Subsidiary, Records Extraordinary Loss

Scala, Inc. has completed the transfer of shares of its subsidiary, Nihon Pet Small-amount Short-term Insurance Company, to Beisia Group Research Institute Co., Ltd. This transaction results in an extraordinary loss of JPY 109 million for Scala, Inc. in its non-consolidated financial results for the fiscal year ending June 30, 2025. The impact on the company’s consolidated financial results is under examination, with updates provided in their financial forecast disclosures.

Scala, Inc. Revises Financial and Dividend Forecasts Amid Structural Reforms

Scala, Inc. announced a revision to its full-year consolidated financial and dividend forecasts for the fiscal year ending June 30, 2025. The company has implemented business structure reforms, including reducing fixed costs and scaling down unprofitable businesses, leading to a return to profitability in operating profit by the second quarter. The revision includes a downward adjustment in revenue but an upward revision in operating profit and profit before tax, reflecting a stable recovery in performance. Additionally, Scala has completed the transfer of shares of its subsidiary, resulting in its classification as a discontinued operation. The company also revised its year-end dividend forecast to JPY 8.50 per share, up by JPY 0.50, aligning with its policy of stable dividends and reflecting the improved earnings forecast.

Scala, Inc. to Receive Dividends from Subsidiaries

Scala, Inc. announced it will receive dividends totaling 250 million yen from two of its consolidated subsidiaries, aimed at optimizing group-wide capital efficiency and enhancing financial management. The dividends will be recorded as net sales on the company’s non-consolidated statement of income for the fiscal year ending June 30, 2025, with no impact on the consolidated financial results.

Scala, Inc. Announces Transition to Tokyo Stock Exchange’s Standard Market

Scala, Inc. has announced its decision to transition from the Tokyo Stock Exchange’s Prime Market to the Standard Market. This move is part of the company’s strategy to enhance corporate value in the medium to long term, following recent structural reforms that have improved profitability. The change is aligned with Scala’s commitment to sustainable growth and efficient management, aiming to meet stakeholder expectations.

Scala, Inc. Reports Positive Financial Turnaround in Q3 2025

Scala, Inc. reported its consolidated financial results for the third quarter of the fiscal year ending June 30, 2025, showing a revenue increase to 7,261 million yen, a 2% rise from the previous year. The company has improved its financial position significantly, turning around from losses in the previous year to a profit attributable to owners of the parent at 534 million yen, reflecting a positive shift in operational efficiency and market positioning.