STG CO.LTD. (5858) AI Stock Analysis

• Market Cap: ¥3.60B
• Dividend Yield: 0.87%
• Average Volume (3M): 13.86K
• Price to Earnings (P/E): 7.4
• Beta (1Y): 1.02
• Revenue Growth: 23.97%
• EPS Growth: 120.19%
• Country: JP
• Employees: 659
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): 67.77
• Shares Outstanding: 2,081,600
• 10 Day Avg. Volume: 7,610
• 30 Day Avg. Volume: 13,856
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥2,093.00
• Price Target Upside: 20.36% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 80 Outperform
• Price Target: ¥2,093.00 ▲(20.36% Upside)

STG CO.LTD. demonstrates strong financial performance with robust growth and efficient operations. The technical analysis indicates strong momentum, though caution is warranted due to overbought conditions. The valuation is attractive with a low P/E ratio, suggesting potential for price appreciation. These factors contribute to a solid overall stock score.

Positive Factors

Revenue Growth

The significant revenue growth indicates strong market demand and effective business strategies, positioning the company for continued expansion.

Cash Flow Management

Improved cash flow management enhances financial flexibility, allowing the company to invest in growth opportunities and manage debt effectively.

Profitability

Strong profitability margins reflect efficient operations and cost management, supporting sustainable long-term financial health.

Negative Factors

Leverage

Moderate leverage requires careful monitoring to prevent financial strain, which could impact the company's ability to invest in future growth.

Equity Ratio

While the capital structure is balanced, a relatively low equity ratio may limit the company's ability to absorb financial shocks.

Debt Levels

High debt levels can constrain financial flexibility and increase risk, necessitating careful management to ensure long-term stability.

STG CO.LTD. Business Overview & Revenue Model

Company Description

STG CO.LTD. (5858) is a diversified company primarily engaged in the development and provision of advanced technology solutions across various sectors. With a focus on innovation, STG specializes in software development, IT consulting, and integrated technology services aimed at enhancing operational efficiencies for businesses. The company serves a wide range of industries, including finance, healthcare, and telecommunications, positioning itself as a key player in the technology landscape.

How the Company Makes Money

STG CO.LTD. generates revenue through multiple channels, primarily from its core services in software development and IT consulting. The company charges clients for custom software solutions, support services, and ongoing maintenance contracts, which provide a steady stream of income. Additionally, STG monetizes its proprietary technology products through licensing agreements and subscription models, allowing businesses to leverage its innovative solutions while generating recurring revenue. Strategic partnerships with other technology firms and industry leaders further enhance its market reach and contribute to revenue growth, as STG collaborates on projects and shares resources to deliver comprehensive solutions to clients.

STG CO.LTD. Financial Statement Overview

Summary

STG CO.LTD. exhibits strong financial performance with robust revenue and profit growth, efficient operations, and improved cash flow management. The balance sheet shows moderate leverage, but the company maintains a healthy capital structure. Overall, the financial health of STG CO.LTD. is solid, with potential for continued growth and stability.

Income Statement

STG CO.LTD. has demonstrated strong revenue growth, with a 22.6% increase from 2024 to 2025. The gross profit margin is robust at 23.7%, and the net profit margin improved to 6.1%. The EBIT and EBITDA margins are healthy at 7.5% and 15.3%, respectively, indicating efficient operations. Overall, the company shows strong profitability and growth trends.

Balance Sheet

The debt-to-equity ratio is 1.18, reflecting moderate leverage. Return on equity is strong at 16.1%, indicating effective use of equity to generate profits. The equity ratio is 36.4%, suggesting a balanced capital structure. While leverage is manageable, the company should monitor its debt levels to maintain financial stability.

Cash Flow

Operating cash flow has increased significantly, supporting a positive free cash flow of 166.7 million. The operating cash flow to net income ratio is 1.4, indicating strong cash generation relative to net income. Free cash flow to net income ratio is 0.43, showing a positive trend. The company has improved its cash flow management, enhancing its financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.43B	6.43B	5.24B	4.68B	3.50B	1.98B
Gross Profit	1.52B	1.52B	1.17B	1.03B	785.13M	541.43M
EBITDA	981.65M	981.65M	699.33M	619.40M	378.48M	209.23M
Net Income	388.93M	389.16M	198.01M	191.52M	88.44M	75.02M
Balance Sheet
Total Assets	6.65B	6.65B	5.89B	5.08B	4.14B	4.26B
Cash, Cash Equivalents and Short-Term Investments	1.06B	1.06B	996.16M	900.02M	492.38M	1.06B
Total Debt	2.87B	2.87B	3.05B	2.73B	2.51B	2.61B
Total Liabilities	4.23B	4.23B	4.19B	3.84B	3.23B	3.41B
Stockholders Equity	2.42B	2.42B	1.71B	1.24B	913.15M	845.03M
Cash Flow
Free Cash Flow	0.00	166.72M	-142.77M	235.75M	-333.00M	-157.31M
Operating Cash Flow	0.00	542.92M	242.53M	519.88M	-8.49M	141.01M
Investing Cash Flow	0.00	-360.09M	-381.55M	-233.14M	-355.51M	-890.91M
Financing Cash Flow	0.00	-205.44M	207.26M	85.19M	-217.66M	1.24B

STG CO.LTD. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1739.00
• 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:5858, the sentiment is Neutral. The current price of 1739 is below the 20-day moving average (MA) of 1792.25, above the 50-day MA of 1611.32, and above the 200-day MA of 1450.25, indicating a neutral trend. The MACD of 38.10 indicates Positive momentum. The RSI at 51.34 is Neutral, neither overbought nor oversold. The STOCH value of 48.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5858.

STG CO.LTD. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5858	80 Outperform	¥3.60B	7.44		0.87%	23.97%	120.19%
6138	72 Outperform	¥3.28B	8.69		2.26%	8.06%	―
6150	72 Outperform	¥2.75B	9.50		2.67%	-10.50%	-31.23%
Sector *	63 Neutral	$10.84B	15.52	7.44%	2.00%	2.86%	-14.57%
5994	63 Neutral	¥5.49B	31.79		1.60%	1.07%	―
6433	54 Neutral	¥2.90B	―		0.21%	-5.80%	2.65%
2962	38 Underperform	¥2.42B	―		―	-28.21%	-396.64%