Scigineer Inc. (6031) AI Stock Analysis

• Market Cap: ¥5.39B
• Dividend Yield: 2.3%
• Average Volume (3M): 108.91K
• Price to Earnings (P/E): 23.2
• Beta (1Y): 0.73
• Revenue Growth: -11.33%
• EPS Growth: 26.97%
• Country: JP
• Employees: 73
• Sector: Technology
• Sector Strength: 88
• Industry: Advertising Agencies
• EPS (TTM): N/A
• Shares Outstanding: 25,768,600
• 10 Day Avg. Volume: 107,510
• 30 Day Avg. Volume: 108,906
• PEG Ratio: 0.34
• Price to Book (P/B): 10.85
• Price to Sales (P/S): 3.84
• P/FCF Ratio: 24.98
• 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: 55 Neutral
• Price Target: ¥280.00 ▼(-5.72% Downside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is primarily supported by strong revenue growth and healthy cash flow generation, but is held back by margin compression and higher leverage. Technicals are notably weak with the stock trading below major moving averages and bearish momentum, while valuation looks only moderately supportive given the P/E and modest dividend yield.

Positive Factors

Revenue Growth

Sustained high top-line growth (36% reported) demonstrates durable demand expansion and successful client acquisition in the core advertising business. Over 2-6 months this supports reinvestment, scale benefits, and revenue resilience even if margins fluctuate.

Cash Conversion / Free Cash Flow

Robust cash generation and efficient conversion of earnings into cash (OCF/Net Income 2.22) provide durable financial flexibility: funds capex, deleveraging, or shareholder returns and cushions operations against cyclical ad spending variability.

High Gross Profit Margin

A 77.9% gross margin indicates structural pricing power or low direct costs in service delivery. This long-term buffer helps absorb SG&A or client mix shifts, supporting operating leverage potential as revenue scales further.

Negative Factors

Net Margin Compression

A sharp fall in net margin to 7.82% signals persistent profitability pressures from higher operating costs or pricing erosion. Over months this erodes retained earnings, limits reinvestment capacity and magnifies sensitivity to revenue slowdowns.

High Leverage

Debt-to-equity of 2.04 denotes substantial reliance on borrowing. Structurally, elevated leverage raises refinancing and interest risks, constrains strategic flexibility, and intensifies downside if margins or cash flows weaken.

Reduced Return on Equity

Declining ROE to 22.06% reflects lower efficiency converting capital into profits, likely tied to margin compression and higher financial costs. Persisting this trend would weaken shareholder returns and signal operational or capital structure issues.

Scigineer Inc. Business Overview & Revenue Model

Company Description

Scigineer Inc. engages in the Internet media and Internet advertising agency businesses in Japan. It is involved in the planning and development of computer systems, and Internet and Web; sale and maintenance of information systems; research and development in the fields of computer science and artificial intelligence; and provision of consulting and management services. Scigineer Inc.was incorporated in 2005 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Scigineer Inc. generates revenue primarily through the sale of its software solutions, which are offered via both one-time licensing fees and subscription-based models. Key revenue streams include direct software sales to pharmaceutical companies, research institutions, and biotech firms, as well as ongoing maintenance and support services for existing clients. Additionally, the company may earn income through partnerships with research organizations and collaborations for custom software development projects. These strategic partnerships enhance Scigineer's market presence and contribute to a steady stream of recurring revenue, as clients often require ongoing updates and enhancements to their software systems.

Scigineer Inc. Financial Statement Overview

Summary

Strong revenue growth and solid cash conversion support the score, but sharply lower net/operating margins and higher leverage (debt-to-equity 2.04) materially increase risk and cap the upside.

Income Statement

Scigineer Inc. has shown a strong revenue growth rate of 29.44% in the latest year, indicating a positive trajectory in sales. However, the net profit margin has decreased significantly from 17.95% to 7.82%, suggesting challenges in maintaining profitability. The gross profit margin remains healthy at 77.91%, but the decline in EBIT and EBITDA margins indicates increased operational costs or inefficiencies.

Balance Sheet

The company's debt-to-equity ratio has increased to 2.04, indicating a higher reliance on debt financing, which could pose a risk if not managed properly. Return on equity has decreased to 22.06%, reflecting reduced profitability relative to shareholder investments. The equity ratio stands at 30.30%, suggesting moderate financial stability but with room for improvement.

Cash Flow

Scigineer Inc. has demonstrated strong free cash flow growth, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 2.22, showing efficient conversion of earnings into cash. However, the free cash flow to net income ratio of 1.97 suggests that while cash flow is strong, there might be some discrepancies in cash management or capital expenditures.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	1.82B	2.36B	1.74B	2.44B	2.60B	1.39B
Gross Profit	1.44B	1.84B	1.39B	1.21B	1.04B	257.73M
EBITDA	108.50M	475.63M	584.77M	273.42M	-990.06M	-53.86M
Net Income	615.18M	184.34M	312.36M	260.57M	-1.15B	-55.20M
Balance Sheet
Total Assets	2.76B	2.76B	2.64B	2.60B	3.09B	515.44M
Cash, Cash Equivalents and Short-Term Investments	1.49B	1.49B	1.14B	1.17B	1.75B	245.62M
Total Debt	1.70B	1.70B	1.02B	1.22B	889.35M	25.00M
Total Liabilities	1.92B	1.92B	1.52B	1.79B	1.57B	235.25M
Stockholders Equity	834.00M	835.59M	1.12B	801.42M	1.52B	280.19M
Cash Flow
Free Cash Flow	0.00	362.84M	158.40M	79.62M	259.89M	-100.13M
Operating Cash Flow	0.00	409.86M	178.02M	94.71M	283.26M	-89.75M
Investing Cash Flow	0.00	-61.88M	-11.90M	-14.87M	-22.37M	-13.18M
Financing Cash Flow	0.00	-527.14M	-188.66M	-662.27M	114.62M	25.00M

Scigineer Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 297.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6031, the sentiment is Negative. The current price of 297 is above the 20-day moving average (MA) of 289.55, below the 50-day MA of 305.31, and below the 200-day MA of 347.52, indicating a bearish trend. The MACD of -13.64 indicates Positive momentum. The RSI at 34.13 is Neutral, neither overbought nor oversold. The STOCH value of 18.85 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6031.

Scigineer Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6069	72 Outperform	¥5.77B	18.25	―	2.65%	12.66%	-36.71%
7095	66 Neutral	¥20.16B	7.57	―	2.01%	15.43%	12.47%
4196	63 Neutral	¥3.40B	77.27	―	―	9.93%	-81.98%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6031	55 Neutral	¥5.39B	23.18	―	2.30%	-11.33%	26.97%
4170	55 Neutral	¥2.82B	94.75	―	―	-3.17%	-535.65%
9235	43 Neutral	¥4.32B	-9.17	―	―	49.01%	-21.56%