Japan Business Systems, Inc. (5036) AI Stock Analysis

• Market Cap: ¥64.15B
• Dividend Yield: 2.13%
• Average Volume (3M): 118.44K
• Price to Earnings (P/E): 15.2
• Beta (1Y): 0.66
• Revenue Growth: 24.55%
• EPS Growth: 83.97%
• Country: JP
• Employees: 2,700
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Infrastructure
• EPS (TTM): 37.99
• Shares Outstanding: 48,366,400
• 10 Day Avg. Volume: 70,570
• 30 Day Avg. Volume: 118,440
• PEG Ratio: 0.16
• Price to Book (P/B): 2.59
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 79 Outperform
• Price Target: ¥1,543.00 ▲(9.67%Upside)

Japan Business Systems, Inc. receives a robust overall score, bolstered by strong revenue growth and technical indicators that suggest upward momentum. However, the high RSI and Stochastic values warrant caution. The valuation is compelling with a low P/E ratio and attractive dividend yield, making it an appealing option for value and income investors. The company's increased leverage and negative free cash flow need attention to ensure sustainable long-term growth.

Japan Business Systems, Inc. Business Overview & Revenue Model

Company Description

Japan Business Systems, Inc. (5036) is a leading technology solutions provider in Japan, specializing in IT services and solutions. The company offers a wide range of services including system integration, cloud computing, IT infrastructure management, and software development. With a focus on innovation and customer satisfaction, Japan Business Systems delivers tailored solutions to businesses across various sectors such as finance, manufacturing, and healthcare.

How the Company Makes Money

Japan Business Systems, Inc. generates revenue primarily through its comprehensive IT services and solutions. The company earns income by providing system integration services, where they design and implement IT systems that align with their clients' business needs. Additionally, they offer cloud computing solutions, enabling businesses to transition to cloud-based infrastructures, which is a significant revenue stream due to the increasing demand for digital transformation. Japan Business Systems also makes money from IT infrastructure management, offering maintenance and support services to ensure optimal performance of clients' IT systems. Furthermore, the company profits from developing custom software applications for various industries, addressing specific business challenges. Partnerships with major technology providers and a strong client base in diverse sectors contribute significantly to their earnings.

Japan Business Systems, Inc. Financial Statement Overview

Summary

Japan Business Systems, Inc. demonstrates strong revenue growth and improving gross margins, indicating solid operational performance. However, profitability metrics such as net profit margin and ROE suggest there is room for enhancing profit generation. The balance sheet shows increased leverage, which could pose risks if not managed carefully. Additionally, negative free cash flow highlights the need for better cash management strategies. Overall, the company is on a growth trajectory but needs to address cash flow and profitability concerns to sustain long-term success.

Income Statement

Japan Business Systems, Inc. has shown consistent revenue growth with a 26.6% increase from 2022 to 2023 and a further 24.9% increase from 2023 to 2024 (TTM). The gross profit margin improved to 10.7% in 2024 (TTM) from 9.9% in 2023. EBIT margin for 2024 (TTM) is stable at 3.7%, showing slight improvement over previous years. However, net profit margin is relatively low at 1.5% in 2024 (TTM), indicating room for profitability improvement.

Balance Sheet

The company's debt-to-equity ratio increased to 0.70 in 2024 (TTM) from 0.57 in 2023, reflecting higher leverage. The equity ratio stands at 38.4%, suggesting a stable equity position. ROE has decreased to 9.2% in 2024 (TTM) from 15.1% in 2023, indicating reduced efficiency in generating profits from equity. Overall, the balance sheet shows stability but with increased debt levels.

Cash Flow

Free cash flow has been negative, showing a concerning trend with no improvement in 2024 (TTM). The operating cash flow to net income ratio is unavailable due to zero cash flow, indicating potential cash management issues. The company needs to improve its cash flow generation to support operations and growth.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
142.90B	140.86B	112.80B	86.33B	74.95B	68.25B
	Gross Profit
15.35B	14.57B	13.08B	10.88B	8.50B	8.48B
	EBIT
5.32B	4.59B	4.19B	4.05B	2.27B	1.51B
	EBITDA
4.53B	3.98B	5.15B	4.61B	2.87B	1.93B
	Net Income Common Stockholders
2.17B	1.51B	3.35B	2.65B	1.56B	833.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.19B	3.73B	5.34B	7.75B	4.01B	4.02B
	Total Assets
61.27B	60.95B	49.61B	38.79B	29.49B	30.20B
	Total Debt
16.53B	19.71B	12.91B	6.35B	5.71B	6.60B
	Net Debt
12.34B	16.35B	7.57B	-1.22B	1.70B	2.58B
	Total Liabilities
37.77B	38.22B	27.39B	19.08B	16.15B	18.30B
	Stockholders Equity
23.50B	22.73B	22.22B	19.71B	13.34B	11.90B
Cash Flow		Free Cash Flow
0.00	-7.85B	-4.73B	711.00M	945.00M	2.72B
	Operating Cash Flow
0.00	-320.00M	-206.00M	3.47B	1.96B	3.22B
	Investing Cash Flow
0.00	-7.66B	-7.04B	-3.97B	-894.00M	-480.00M
	Financing Cash Flow
0.00	6.05B	4.99B	4.01B	-1.08B	-998.00M

Japan Business Systems, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1407.00
• 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:5036, the sentiment is Positive. The current price of 1407 is above the 20-day moving average (MA) of 1369.75, above the 50-day MA of 1135.16, and above the 200-day MA of 993.45, indicating a bullish trend. The MACD of 86.71 indicates Positive momentum. The RSI at 64.85 is Neutral, neither overbought nor oversold. The STOCH value of 57.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5036.

Japan Business Systems, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4431	80 Outperform	¥67.78B	42.38		0.45%	31.20%	44.01%
5036	79 Outperform	¥64.15B	15.22		2.13%	24.55%	83.97%
4419	72 Outperform	¥64.07B	96.05		―	43.29%	―
4435	67 Neutral	¥52.12B	172.35		―	24.81%	-58.00%
4475	66 Neutral	¥51.32B	42.39		0.19%	25.42%	36.27%
3854	63 Neutral	¥66.62B	21.48		1.69%	7.54%	3.48%
Sector *	62 Neutral	$11.80B	10.37	-7.29%	2.91%	7.39%	-7.96%