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

• Market Cap: ¥3.96B
• Dividend Yield: 3.54%
• Average Volume (3M): 1.51K
• Price to Earnings (P/E): 13.4
• Beta (1Y): 0.33
• Revenue Growth: 13.81%
• EPS Growth: 64.18%
• Country: JP
• Employees: 231
• Sector: General
• Sector Strength: N/A
• Industry: Consulting Services
• EPS (TTM): 7.43
• Shares Outstanding: 3,148,100
• 10 Day Avg. Volume: 1,440
• 30 Day Avg. Volume: 1,510
• PEG Ratio: 0.09
• Price to Book (P/B): 2.18
• Price to Sales (P/S): 1.11
• P/FCF Ratio: 8.87
• 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: 71 Outperform
• Price Target: ¥1,398.00 ▲(6.88% Upside)

The overall stock score of 71 reflects ES Networks Co., Ltd.'s strong financial performance, characterized by robust profitability and a solid balance sheet. However, technical indicators suggest a bearish trend, which tempers the overall outlook. The reasonable valuation and attractive dividend yield provide additional support to the score.

Positive Factors

Strong Financial Health

Low leverage and a robust equity position indicate financial stability, allowing for strategic investments and resilience against economic downturns.

Cash Generation Ability

Strong cash flow generation enhances financial flexibility, enabling the company to fund growth initiatives and return capital to shareholders.

Revenue Growth

Consistent revenue growth reflects effective market positioning and demand for services, supporting long-term business expansion.

Negative Factors

Profit Margin Improvement Needed

While profitability is strong, further margin improvements could enhance competitiveness and shareholder returns.

Technical Indicators

Short-term bearish trends may affect investor sentiment and capital raising efforts, though fundamental impacts are limited.

Market Sentiment

Negative market sentiment could hinder stock performance, impacting investor confidence despite strong fundamentals.

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

Company Description

ES Networks Co., Ltd. (5867) is a leading company in the telecommunications and IT services sector, specializing in providing advanced network solutions and infrastructure development. The company focuses on delivering high-quality services in areas such as network design, installation, and maintenance, as well as offering cloud services and data management solutions to a diverse range of clients, including businesses and government entities.

How the Company Makes Money

ES Networks Co., Ltd. generates revenue primarily through its core services, which include network infrastructure projects, ongoing maintenance contracts, and cloud service subscriptions. The company earns money by charging clients for the design and implementation of telecommunications networks, as well as through long-term service agreements that ensure continuous support and system upgrades. Additionally, ES Networks might have strategic partnerships with technology providers, enabling them to enhance service offerings and reach new markets. These alliances can contribute significantly to the company's revenue by expanding its customer base and creating bundled service offerings.

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	3.05B	2.95B	2.71B	2.65B	2.33B
Gross Profit	1.40B	1.34B	1.26B	1.24B	989.71M
EBITDA	319.03M	445.24M	223.78M	243.81M	221.58M
Net Income	313.99M	301.66M	136.80M	143.15M	122.64M
Balance Sheet
Total Assets	2.07B	2.28B	2.22B	2.38B	2.40B
Cash, Cash Equivalents and Short-Term Investments	1.17B	1.39B	1.21B	1.38B	1.67B
Total Debt	126.00M	277.06M	538.00M	770.18M	866.03M
Total Liabilities	475.76M	710.00M	823.00M	1.12B	1.21B
Stockholders Equity	1.52B	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: Neutral
• Last Price: 1308.00
• 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:5867, the sentiment is Neutral. The current price of 1308 is above the 20-day moving average (MA) of 1292.90, above the 50-day MA of 1307.32, and above the 200-day MA of 1159.66, indicating a neutral trend. The MACD of -6.38 indicates Positive momentum. The RSI at 48.01 is Neutral, neither overbought nor oversold. The STOCH value of 50.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
6578	76 Outperform	¥2.78B	413.97	―	2.07%	49.99%	142.46%
2449	75 Outperform	¥4.47B	10.51	―	3.70%	7.31%	109.18%
5867	71 Outperform	¥3.96B	13.42	―	3.54%	13.81%	64.18%
7034	71 Outperform	¥6.71B	32.15	―	―	283.85%	-35.61%
9237	70 Outperform	¥3.45B	39.76	―	―	43.89%	-50.27%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
3768	55 Neutral	¥3.88B	3.01	―	2.93%	1.61%	―