S&J Corporation (5599) AI Stock Analysis

• Market Cap: ¥7.94B
• Dividend Yield: N/A
• Average Volume (3M): 33.85K
• Price to Earnings (P/E): 25.6
• Beta (1Y): 0.77
• 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: 61 Neutral
• Price Target: ¥1,489.00 ▼(-21.92% Downside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is driven by strong fundamentals (growth, solid profitability, and a debt-free balance sheet), but is held back by negative free cash flow in 2025 and a weak technical setup with the stock in a pronounced downtrend. Valuation is moderate-to-rich (P/E ~25.6) without dividend support.

Positive Factors

Multi-year revenue growth

Three consecutive years of strong revenue growth (2023–2025, ~21% in 2025) indicate durable end-market demand and successful commercial execution. Sustained top-line expansion improves investment capacity for R&D and sales, supporting longer-term organic growth and scale economies.

High and expanding margins

High gross margins (near the high-40% range) and recent margin expansion reflect structural pricing power and a scalable cost base. Persistent operating leverage makes incremental revenue more profitable, supporting sustainable cash generation potential when cash conversion normalizes.

Debt-free conservative balance sheet

A debt-free capital structure across 2023–2025 materially reduces financial risk and interest burden. This strength preserves flexibility for strategic investments or M&A, provides resilience in downturns, and lowers default risk, supporting long-term corporate stability.

Negative Factors

Negative free cash flow and volatile cash conversion

Free cash flow turning negative in 2025 and inconsistent cash conversion raise durable concerns about the firm’s ability to fund growth internally. Persistent FCF weakness limits capacity for dividends, buybacks, or self-funded capex and may force external financing or equity issuance.

Declining returns on incremental capital

Falling ROE from elevated 2022–2023 levels suggests new investments are generating lower returns, which can dilute long-term shareholder value if continued. This trend raises questions about capital allocation effectiveness and the sustainability of past profitability.

No dividend support

Absence of a dividend means investors rely solely on capital appreciation for returns. Over the long run, lack of a payout policy reduces income predictability for shareholders and places more emphasis on management’s reinvestment choices to deliver sustained value.

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.

S&J Corporation Financial Statement Overview

Summary

Strong multi-year revenue growth and solid margins support earnings quality, and the balance sheet is very low risk with zero debt and rising equity. The main drag is cash-flow reliability: free cash flow turned negative in 2025 and cash conversion has been volatile.

Income Statement

Revenue has grown strongly for three consecutive annual periods (2023–2025), with 2025 revenue up ~21% year over year. Profitability is solid: gross margin remains near the high-40% range and operating profitability improved in 2025 versus 2024 (both operating and EBITDA margins expanded). Net margin also stepped up in 2025, signaling good operating leverage. The key weakness is some volatility in profitability over time (net margin was higher in 2022/2023 than 2024), suggesting results can fluctuate despite the overall growth trend.

Balance Sheet

The balance sheet is very conservative, with zero debt in 2023–2025 and a debt-free capital structure in the latest year, which materially reduces financial risk. Equity has expanded meaningfully across the period, supporting asset growth and strengthening the capital base. Returns on equity remain healthy in 2024–2025, though they are down notably from the unusually high levels seen in 2022–2023, implying that incremental capital is earning a lower return than earlier periods.

Cash Flow

Cash generation is the main weak spot. Operating cash flow improved in 2025 versus 2024, but free cash flow turned negative in 2025 after being positive in prior years, indicating heavier investment or working-capital pressure. Cash conversion has been inconsistent across the period (very strong in 2022–2023, very weak in 2024, and mixed again in 2025), which increases uncertainty around the sustainability of cash returns to shareholders despite solid reported earnings.

Breakdown	Mar 2025	Mar 2025	Mar 2024	Mar 2022
Income Statement
Total Revenue	1.94B	1.61B	1.28B	1.08B
Gross Profit	918.51M	777.69M	622.91M	478.87M
EBITDA	480.11M	359.03M	339.76M	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: Negative
• MACD: Negative
• 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 Negative. The current price of 1907 is above the 20-day moving average (MA) of 1601.30, below the 50-day MA of 1951.18, and above the 200-day MA of 1580.14, indicating a bearish trend. The MACD of -102.55 indicates Negative momentum. The RSI at 36.18 is Neutral, neither overbought nor oversold. The STOCH value of 17.38 is Positive, 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	68 Neutral	¥9.02B	15.16	―	4.16%	4.52%	51.81%
4442	68 Neutral	¥9.24B	11.18	―	0.95%	9.36%	-1.69%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5599	61 Neutral	¥7.94B	25.59	―	―	18.39%	37.21%
1447	60 Neutral	¥10.26B	9.56	―	―	2.32%	126.46%
155A	53 Neutral	¥9.19B	45.06	―	―	30.13%	9.94%
5255	42 Neutral	¥6.21B	-28.24	―	―	-29.41%	79.74%