S&J Corporation (5599) AI Stock Analysis

• Market Cap: ¥9.01B
• Dividend Yield: N/A
• Average Volume (3M): 33.85K
• Price to Earnings (P/E): 21.4
• Beta (1Y): 0.84
• Revenue Growth: 18.39%
• EPS Growth: 37.21%
• Country: JP
• Employees: 61
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 18.45
• 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): 70.3
• Revenue Forecast (FY): ¥2.39B

• Rating: 65 Neutral
• Price Target: ¥1,527.00 ▼(-19.93% Downside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is anchored by strong financial fundamentals (growth, profitability, and a debt-free balance sheet), but is meaningfully reduced by weak technical momentum and mixed cash-flow quality, including negative free cash flow in the latest year.

Positive Factors

Sustained Revenue Growth

Multi-year revenue expansion nearly doubled top-line from 2022–2025, indicating structural demand for S&J’s services and successful market penetration. Durable revenue growth supports reinvestment, scale economics, and long-term strategic initiatives over 2–6 months.

Debt-Free, Conservative Balance Sheet

A debt-free balance sheet provides material financial flexibility: low default risk, capacity to fund capex or M&A from equity or cash, and resilience in downturns. This structural strength supports sustainable strategy execution and capital allocation choices.

Solid Profitability and Returns

Stable high gross margins and improving net margins, alongside a healthy ROE, indicate enduring business economics and pricing power. These fundamentals support durable internal cash generation potential and long-term shareholder returns if margins remain supported.

Negative Factors

Negative Free Cash Flow in 2025

Negative FCF after a history of positive conversion suggests structural reallocation to capex or rising working capital needs. Persistently negative FCF would constrain self-funded growth, dividend capacity, and require external financing despite a debt-free sheet.

Inconsistent Operating Cash Conversion

Material swing in operating cash flow versus earnings signals volatility in cash conversion quality. Over months this undermines predictability of free cash flow, complicates budgeting and weakens confidence in earnings translating reliably into deployable cash.

Margin Variability and Normalizing Returns

Profitability fluctuation and a normalized ROE versus prior peak reflect sensitivity to cost structure or revenue mix. This reduces confidence in margin sustainability and implies future earnings and return volatility over the medium term.

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, debt-free balance sheet. The main constraint is 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	Mar 2025	Mar 2025	Mar 2024	Mar 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: Negative
• Last Price: 1907.00
• 50DMA: Negative
• 100DMA: Negative
• 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:5599, the sentiment is Negative. The current price of 1907 is below the 20-day moving average (MA) of 1932.20, below the 50-day MA of 2037.72, and above the 200-day MA of 1556.15, indicating a neutral trend. The MACD of -152.89 indicates Positive momentum. The RSI at 36.56 is Neutral, neither overbought nor oversold. The STOCH value of 46.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5599.

S&J Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3799	78 Outperform	¥9.57B	9.65	―	4.16%	4.52%	51.81%
4442	73 Outperform	¥9.66B	16.05	―	0.95%	9.36%	-1.69%
5599	65 Neutral	¥9.01B	21.35	―	―	18.39%	37.21%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1447	60 Neutral	¥10.16B	16.22	―	―	2.32%	126.46%
155A	58 Neutral	¥9.66B	30.74	―	―	30.13%	9.94%
5255	41 Neutral	¥7.31B	-13.85	―	―	-29.41%	79.74%