Nalnet Communications, Inc. (5870) AI Stock Analysis

• Market Cap: ¥4.79B
• Dividend Yield: 1.58%
• Average Volume (3M): 46.39K
• Price to Earnings (P/E): 17.1
• Beta (1Y): 1.07
• Revenue Growth: 18.31%
• EPS Growth: 102.31%
• Country: JP
• Employees: 95
• Sector: Services
• Sector Strength: N/A
• Industry: Personal Products & Services
• EPS (TTM): 31.43
• Shares Outstanding: 5,332,100
• 10 Day Avg. Volume: 49,520
• 30 Day Avg. Volume: 46,390
• PEG Ratio: -0.55
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 0.34
• P/FCF Ratio: 8.25
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 81 Outperform
• Price Target: ¥1,178.00 ▲(13.38% Upside)

Nalnet Communications, Inc. receives a strong overall stock score of 81, driven primarily by its robust financial performance and positive technical indicators. The company's valuation is also favorable, contributing to its attractiveness. While profitability and cash flow management could be improved, the current momentum and reasonable valuation make it a compelling investment opportunity.

Positive Factors

Revenue Growth

The company's consistent revenue growth indicates a strong market position and effective business model, supporting long-term expansion and stability.

Operational Performance

Healthy profit margins reflect efficient cost management and operational effectiveness, which are crucial for sustaining profitability over time.

Balance Sheet Health

A balanced capital structure with moderate leverage enhances financial stability and provides flexibility for future investments and growth.

Negative Factors

Profitability Pressure

Decreasing net profit margins suggest challenges in maintaining profitability, which could impact the company's ability to reinvest and grow.

Free Cash Flow Decline

A significant decline in free cash flow may limit the company's ability to fund operations and investments, potentially affecting long-term growth prospects.

Return on Equity Decline

A declining return on equity indicates reduced efficiency in generating profits from shareholders' investments, which could impact investor confidence.

Nalnet Communications, Inc. Business Overview & Revenue Model

Company Description

Nalnet Communications, Inc. (5870) is a leading provider of innovative telecommunications solutions, specializing in broadband internet services, digital voice, and data services for residential and business customers. The company operates primarily in the telecommunications sector, focusing on delivering high-speed connectivity and advanced communication technologies. Nalnet is committed to enhancing user experience through reliable service and cutting-edge technology, catering to both urban and rural markets.

How the Company Makes Money

Nalnet Communications generates revenue through multiple key streams including subscription fees for its broadband internet and digital voice services, as well as installation and equipment fees for new customers. The company operates on a recurring revenue model where customers pay monthly for their service packages. Additionally, Nalnet may partner with other technology firms to offer bundled services or co-branded products, which can enhance customer acquisition and retention. Strategic collaborations with local governments and businesses to expand infrastructure in underserved areas also contribute to revenue growth, as these initiatives often come with funding or incentives that support expansion efforts.

Nalnet Communications, Inc. Financial Statement Overview

Summary

Nalnet Communications, Inc. demonstrates robust revenue growth and stable operational performance. The balance sheet reflects moderate leverage and a balanced capital structure, although there is room for improvement in profitability and cash flow management. The company should focus on enhancing net profit margins and free cash flow generation to strengthen its financial position further.

Income Statement

Nalnet Communications, Inc. has shown strong revenue growth, with a 11.34% increase from 2024 to 2025. The gross profit margin is healthy at 27.81%, and the net profit margin stands at 2.79%. However, the net profit margin has decreased from the previous year, indicating some pressure on profitability. The EBIT and EBITDA margins are stable, reflecting efficient operational management.

Balance Sheet

The company's balance sheet is solid, with a debt-to-equity ratio of 0.50, indicating moderate leverage. The return on equity is 6.95%, which is reasonable but shows a decline from previous years. The equity ratio is 34.57%, suggesting a balanced capital structure. The company has reduced its total debt, improving its financial stability.

Cash Flow

Nalnet Communications has experienced a decline in free cash flow, with a negative growth rate of -47.95%. The operating cash flow to net income ratio is 1.79, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio has decreased, suggesting potential challenges in maintaining free cash flow levels.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022
Income Statement
Total Revenue	8.54B	7.67B	7.03B	6.42B
Gross Profit	2.38B	1.94B	2.18B	2.10B
EBITDA	874.61M	942.50M	1.11B	793.16M
Net Income	238.33M	305.14M	622.15M	199.23M
Balance Sheet
Total Assets	9.92B	9.57B	9.60B	9.42B
Cash, Cash Equivalents and Short-Term Investments	859.48M	1.03B	602.22M	683.14M
Total Debt	1.72B	2.13B	2.45B	2.80B
Total Liabilities	6.49B	6.46B	6.69B	6.94B
Stockholders Equity	3.43B	3.27B	2.91B	2.48B
Cash Flow
Free Cash Flow	348.94M	670.34M	261.89M	606.55M
Operating Cash Flow	427.58M	827.32M	374.12M	696.99M
Investing Cash Flow	-91.12M	-138.20M	-112.82M	-96.86M
Financing Cash Flow	-503.92M	-264.41M	-342.22M	-311.20M

Nalnet Communications, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1039.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5870, the sentiment is Positive. The current price of 1039 is above the 20-day moving average (MA) of 974.95, above the 50-day MA of 970.14, and above the 200-day MA of 736.87, indicating a bullish trend. The MACD of 32.36 indicates Negative momentum. The RSI at 65.44 is Neutral, neither overbought nor oversold. The STOCH value of 88.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5870.

Nalnet Communications, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6060	82 Outperform	¥5.13B	9.28	―	2.27%	-0.64%	24.31%
5870	81 Outperform	¥4.79B	17.09	―	1.58%	18.31%	102.31%
2424	69 Neutral	¥3.63B	8.28	―	1.22%	6.57%	52.89%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%
6181	41 Neutral	¥3.63B	-3.46	―	―	4.74%	-8577.95%
7074	41 Neutral	¥2.16B	-11.09	―	―	-21.04%	76.41%
2437	40 Neutral	¥3.04B	-7.45	―	―	-24.31%	56.72%