Scigineer Inc. (6031) AI Stock Analysis

• Market Cap: ¥6.88B
• Dividend Yield: 2.3%
• Average Volume (3M): 108.91K
• Price to Earnings (P/E): 20.3
• Beta (1Y): 0.86
• Revenue Growth: -11.33%
• EPS Growth: 26.97%
• Country: US
• Employees: 73
• Sector: Technology
• Sector Strength: 88
• Industry: Advertising Agencies
• EPS (TTM): -1.06
• 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: 64 Neutral
• Price Target: ¥356.00 ▲(19.87% Upside)

The score is primarily driven by solid financial performance supported by strong revenue growth and cash flow generation, offset by weakening profit margins and elevated leverage. Technicals are mixed (stronger short-term trend but weaker long-term trend), and valuation is moderate with a modest dividend yield.

Positive Factors

Recurring revenue and partnerships

Scigineer's mix of subscription licensing, maintenance contracts and research partnerships creates durable recurring revenue and higher client retention. This model enhances predictability, supports long-term cash flow, and increases lifetime customer value—key for sustained investment in R&D and growth.

High gross margins

A ~78% gross margin reflects strong product economics typical of software and analytics platforms, enabling substantial operating leverage as revenue scales. Sustained high gross margins provide capacity to absorb sales and R&D investment while protecting long-term profitability if cost discipline is maintained.

Strong cash conversion

Operating cash conversion above 2x and demonstrated free cash flow growth indicate efficient cash generation from operations. This durability supports reinvestment, debt servicing, and potential dividends or buybacks, improving financial flexibility and resilience through industry cycles.

Negative Factors

Declining net profit margins

A sharp drop in net margin undercuts long-term earnings power and suggests rising operating costs or pricing pressure. If persistent, lower margins reduce retained earnings for reinvestment and weaken returns to shareholders, forcing reliance on revenue growth rather than margin expansion to sustain profits.

Elevated leverage

High debt relative to equity raises financing risk, increases interest obligations, and constrains strategic flexibility. Over a multi-month horizon, elevated leverage can amplify downside in slower revenue periods, limit capacity for acquisitions or R&D spend, and pressure credit metrics if cash flow weakens.

Reduced return on equity

A declining ROE signals that shareholder capital is generating lower returns, likely tied to margin deterioration and higher leverage. Persistently falling ROE can erode investor confidence and indicates the company must improve operational efficiency or redeploy capital more effectively to sustain long-term shareholder value.

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 (29.44%) and solid cash conversion (operating cash flow to net income of 2.22) support the score, but materially weaker profitability (net margin down from 17.95% to 7.82%) and higher leverage (debt-to-equity 2.04; equity ratio 30.30%) limit it.

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

Scigineer Inc. Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6031, the sentiment is Positive. The current price of 297 is below the 20-day moving average (MA) of 310.93, below the 50-day MA of 302.71, and below the 200-day MA of 348.86, indicating a neutral trend. The MACD of 7.25 indicates Negative momentum. The RSI at 58.08 is Neutral, neither overbought nor oversold. The STOCH value of 47.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6031.

Scigineer Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2491	79 Outperform	¥21.42B	4.76	―	7.85%	-3.20%	34.08%
2411	74 Outperform	¥5.86B	11.35	―	4.65%	5.94%	617.63%
6045	68 Neutral	¥13.32B	20.15	―	2.19%	14.43%	10.99%
6031	64 Neutral	¥6.88B	20.34	―	2.30%	-11.33%	26.97%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
2122	59 Neutral	¥8.56B	38.42	―	2.61%	11.84%	246.10%
6094	46 Neutral	¥9.58B	33.87	―	―	-2.68%	91.68%