ES Networks Co., Ltd. (5867) AI Stock Analysis

• Market Cap: ¥3.85B
• Dividend Yield: 3.5%
• Average Volume (3M): 2.01K
• Price to Earnings (P/E): 12.3
• Beta (1Y): 0.28
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: JP
• Employees: 231
• Sector: Industrials
• Sector Strength: 70
• Industry: Consulting Services
• EPS (TTM): 46.19
• Shares Outstanding: 3,048,100
• 10 Day Avg. Volume: 990
• 30 Day Avg. Volume: 2,013
• 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: ¥1,357.00
• Price Target Upside: 6.43% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 79 Outperform
• Price Target: ¥1,357.00 ▲(6.43% Upside)

ES Networks Co., Ltd. scores well due to its strong financial performance, characterized by robust profitability and cash flow improvements. The stock's technical indicators suggest positive momentum, though caution is advised due to nearing overbought levels. Additionally, the stock's attractive valuation with a reasonable P/E ratio and solid dividend yield enhances its appeal. The absence of earnings call data and corporate events means these factors did not influence the score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates the company's expanding market presence and successful service offerings, which are crucial for long-term sustainability.

Cash Flow Improvements

Improved cash flow enhances financial flexibility, enabling the company to invest in growth opportunities and manage operations efficiently.

Low Leverage

Low leverage reduces financial risk and interest obligations, providing a stable foundation for long-term growth and resilience against economic fluctuations.

Negative Factors

Profit Margin Improvement Needed

While profitability is strong, further improvement in net profit margins is necessary to maximize shareholder value and ensure competitive advantage.

Operational Efficiency

Despite good margins, continuous focus on operational efficiency is essential to maintain competitiveness and adapt to market changes.

Absence of Earnings Call Data

Lack of earnings call data limits transparency and investor insight into management's strategic direction, potentially affecting investor confidence.

ES Networks Co., Ltd. Business Overview & Revenue Model

Company Description

ES Networks Co., Ltd. (5867) is a Japanese company engaged in providing a range of business consulting and IT services. The company specializes in offering solutions that enhance business operations through the integration of information technology and management consulting. ES Networks Co., Ltd. primarily serves clients across various industries by providing strategic consulting, IT solutions, and systems integration services.

How the Company Makes Money

ES Networks Co., Ltd. generates revenue through a combination of consulting fees and service charges for their IT solutions and systems integration projects. The company's key revenue streams include providing strategic business consulting services that help companies optimize their operations and technology infrastructure. Additionally, ES Networks offers systems integration and IT solutions that involve implementing and managing complex IT systems for their clients. The company may also engage in partnerships with technology providers and other consulting firms to enhance its service offerings and expand its client base. These collaborations can contribute significantly to its earnings by allowing ES Networks to offer comprehensive solutions that address a wide range of business challenges.

ES Networks Co., Ltd. Financial Statement Overview

Summary

ES Networks Co., Ltd. demonstrates strong financial health with consistent revenue growth, robust profitability margins, and a solid balance sheet characterized by low leverage and high equity. The company's cash flow position has significantly improved, reflecting its ability to generate and manage cash efficiently. Continuous focus on enhancing net profit margins and maintaining cash flow growth will be crucial for sustained success.

Income Statement

ES Networks Co., Ltd. has demonstrated strong revenue growth with a 8.84% increase from 2023 to 2024. The company maintains a healthy gross profit margin of 45.49% and a net profit margin of 10.22% for 2024, indicating effective cost management and profitability. The EBIT margin of 10.24% and EBITDA margin of 15.09% further highlight operational efficiency. However, the net profit margin improvement from the previous year suggests room for further enhancement.

Balance Sheet

The company exhibits a strong equity position with a debt-to-equity ratio of 0.18, reflecting low leverage and financial stability. The return on equity (ROE) is robust at 20.06%, showcasing effective use of shareholders' equity to generate profits. The equity ratio stands at 65.91%, indicating a solid capital structure. The decrease in total debt over the years further strengthens the balance sheet.

Cash Flow

ES Networks Co., Ltd. has shown impressive free cash flow growth, turning from negative in 2023 to positive in 2024, with a free cash flow of 369 million JPY. The operating cash flow to net income ratio of 1.24 indicates strong cash generation relative to net income. The free cash flow to net income ratio of 1.22 further underscores the company's ability to convert earnings into cash effectively.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.03B	2.95B	2.71B	2.65B	2.33B
Gross Profit	1.38B	1.34B	1.26B	1.24B	989.71M
EBITDA	354.65M	445.24M	223.78M	243.81M	221.58M
Net Income	312.42M	301.66M	136.00M	143.15M	122.64M
Balance Sheet
Total Assets	2.06B	2.28B	2.22B	2.38B	2.40B
Cash, Cash Equivalents and Short-Term Investments	1.14B	1.39B	1.21B	1.38B	1.67B
Total Debt	190.94M	277.06M	538.00M	770.18M	866.03M
Total Liabilities	547.09M	710.00M	823.00M	1.12B	1.21B
Stockholders Equity	1.45B	1.50B	1.33B	1.21B	1.16B
Cash Flow
Free Cash Flow	0.00	369.00M	-48.00M	130.80M	196.64M
Operating Cash Flow	0.00	374.00M	124.00M	132.04M	218.64M
Investing Cash Flow	0.00	218.44M	-66.00M	-315.24M	149.18M
Financing Cash Flow	0.00	-442.60M	-315.00M	-178.74M	-195.38M

ES Networks Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1275.00
• 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:5867, the sentiment is Positive. The current price of 1275 is above the 20-day moving average (MA) of 1265.90, above the 50-day MA of 1201.20, and above the 200-day MA of 1071.53, indicating a bullish trend. The MACD of 25.45 indicates Positive momentum. The RSI at 58.02 is Neutral, neither overbought nor oversold. The STOCH value of 33.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5867.

ES Networks Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5867	79 Outperform	¥3.85B	12.30		3.50%	―	―
2449	75 Outperform	¥4.21B	11.73		3.81%	7.42%	98.27%
9237	73 Outperform	¥5.66B	47.04		―	54.00%	6.84%
6578	70 Outperform	¥2.53B	14.64		2.61%	82.83%	―
7034	65 Neutral	¥8.52B	35.49		―	125.74%	-109.66%
Sector *	65 Neutral	$2.69B	14.97	12.10%	3.43%	2.94%	43.39%
3768	61 Neutral	¥3.82B	―		3.02%	3.25%	-114.05%