S&J Corporation (5599) AI Stock Analysis

• Market Cap: ¥12.31B
• Dividend Yield: N/A
• Average Volume (3M): 33.85K
• Price to Earnings (P/E): 33.3
• Beta (1Y): 0.99
• Revenue Growth: 18.39%
• EPS Growth: 37.21%
• Country: JP
• Employees: 61
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 19.06
• Shares Outstanding: 5,627,200
• 10 Day Avg. Volume: 47,290
• 30 Day Avg. Volume: 33,846
• PEG Ratio: 0.49
• Price to Book (P/B): 3.11
• Price to Sales (P/S): 3.21
• P/FCF Ratio: -86.24
• 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: 76 Outperform
• Price Target: ¥2,753.00 ▲(44.36% Upside)

The score is driven primarily by strong financial performance (growth, profitability, and a debt-free balance sheet) and bullish technical momentum. These positives are tempered by cash flow volatility (negative free cash flow in 2025) and a relatively high P/E valuation.

Positive Factors

Debt-free, conservative balance sheet

Zero reported debt and an expanding equity base provide durable financial flexibility. Over 2–6 months this lowers default and refinancing risk, enables opportunistic investment or M&A without leverage, and supports stability through industry cycles and near-term macro shocks.

Strong multi-year revenue growth

Sustained revenue growth implies expanding market traction and scalable demand for services. Over the medium term this supports operating leverage, funding for product development or hiring, and a stronger competitive position versus peers with flatter top-line trends.

Healthy gross and net margins

Consistently high gross margin and improving net margin indicate structural pricing power and operational efficiency. These margin levels underpin sustainable profitability, enabling reinvestment and return generation even if top-line growth moderates over the next several quarters.

Negative Factors

Negative free cash flow in 2025

A shift to negative free cash flow threatens durable capital flexibility; recurring negative FCF would force reliance on equity or new financing and could constrain growth investments or dividends. The 2025 FCF deficit signals potential structural cash absorption.

Inconsistent operating cash conversion

Volatile conversion of earnings to cash reduces predictability of internal funding and complicates capital allocation. Over the medium term this can increase working-capital strain, raise funding costs, and make reported profits a less reliable gauge of financial strength.

Margin variability versus 2022 highs

Evidence of fluctuating margins implies earnings are sensitive to cost or revenue mix shifts. Structurally, this raises execution risk: sustaining prior high returns may require cost control or favorable client mix, which could be challenged by competition or input-cost pressure.

S&J Corporation Business Overview & Revenue Model

Company Description

S&J Corp is a Japan-based company mainly engaged in the operation of cybersecurity business that provides consulting services and security operation center (SOC) services, which are security monitoring and operation services. The consulting service provides security advisors, incident response, email security, vulnerability diagnosis, and security products. The SOC service provides monitoring services through KeepEye, a proprietary cloud-based endpoint detection and response (EDR) service powered by SOC Engine. The Company provides monitoring and operation services using other companies' EDR products.

How the Company Makes Money

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S&J Corporation Financial Statement Overview

Summary

Strong revenue growth and solid profitability, supported by a very conservative balance sheet with no reported debt and healthy ROE. The main offset is weaker cash flow quality: free cash flow turned negative in 2025 and operating cash flow has been inconsistent versus earnings.

Income Statement

Revenue has grown strongly over the last several years (about ¥1.08B in 2022 to ¥1.94B in 2025), and profitability is solid with stable gross margin near ~49% and improving operating and net margins in 2025 (net margin ~15.9% vs ~13.6% in 2024/2023). The main weakness is that margins have shown some variability versus 2022’s higher operating and net margins, suggesting profitability can fluctuate with cost structure or mix.

Balance Sheet

The balance sheet is conservatively positioned with zero reported debt in 2023–2025 and a debt-to-equity ratio at 0. Equity has expanded meaningfully alongside asset growth, supporting financial flexibility. Return on equity is healthy in 2025 (~15.4%), though it is below the elevated level seen in 2022, indicating returns have normalized as the equity base grew.

Cash Flow

Cash generation is mixed. Operating cash flow improved in 2025 (¥344M) versus 2024 (¥66.6M), but free cash flow turned negative in 2025 (about -¥72.3M) after being positive in prior years, indicating higher investment or working-capital usage. Another concern is that operating cash flow has been inconsistent relative to earnings (weak in 2024, improved in 2025), which adds volatility to cash conversion.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022
Income Statement
Total Revenue	1.94B	1.61B	1.28B	1.08B
Gross Profit	946.03M	781.72M	627.91M	483.56M
EBITDA	482.99M	329.45M	329.63M	255.72M
Net Income	309.11M	218.67M	210.52M	223.59M
Balance Sheet
Total Assets	2.71B	2.46B	1.55B	992.35M
Cash, Cash Equivalents and Short-Term Investments	2.00B	2.12B	1.35B	839.75M
Total Debt	0.00	0.00	0.00	109.28M
Total Liabilities	701.84M	703.08M	791.89M	449.31M
Stockholders Equity	2.00B	1.76B	753.57M	543.04M
Cash Flow
Free Cash Flow	-72.31M	55.03M	637.04M	401.21M
Operating Cash Flow	344.06M	66.55M	645.71M	421.42M
Investing Cash Flow	-402.58M	-76.27M	-22.44M	-28.00K
Financing Cash Flow	-63.41M	775.87M	-109.28M	21.38M

S&J Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1907.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5599, the sentiment is Positive. The current price of 1907 is below the 20-day moving average (MA) of 2244.50, below the 50-day MA of 1992.98, and above the 200-day MA of 1492.07, indicating a neutral trend. The MACD of 80.61 indicates Positive momentum. The RSI at 53.78 is Neutral, neither overbought nor oversold. The STOCH value of 14.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5599.

S&J Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4012	79 Outperform	¥6.13B	9.47	―	1.66%	8.16%	5.69%
3799	78 Outperform	¥10.07B	9.62	―	4.16%	4.52%	51.81%
5599	76 Outperform	¥12.31B	33.29	―	―	18.39%	37.21%
2488	73 Outperform	¥6.89B	11.03	―	2.78%	13.58%	20.32%
5578	68 Neutral	¥11.20B	18.07	―	0.55%	27.16%	29.27%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1447	57 Neutral	¥9.60B	45.12	―	―	2.32%	126.46%