LTS, Inc. (6560) AI Stock Analysis

• Market Cap: ¥10.32B
• Dividend Yield: 1.34%
• Average Volume (3M): 12.15K
• Price to Earnings (P/E): 13.6
• Beta (1Y): 0.64
• Revenue Growth: 5.97%
• EPS Growth: -5.60%
• Country: JP
• Employees: 1,022
• Sector: Industrials
• Sector Strength: 72
• Industry: Consulting Services
• EPS (TTM): 53.86
• Shares Outstanding: 4,724,785
• 10 Day Avg. Volume: 13,890
• 30 Day Avg. Volume: 12,150
• PEG Ratio: 0.10
• Price to Book (P/B): 2.32
• Price to Sales (P/S): 0.64
• P/FCF Ratio: 18.94
• 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: 73 Outperform
• Price Target: ¥2,636.00 ▲(23.64% Upside)

LTS, Inc. demonstrates strong financial performance with robust revenue and profit growth, supported by a stable balance sheet. The technical analysis suggests a bullish trend, though caution is advised due to overbought indicators. The valuation is reasonable, offering a fair P/E ratio and a modest dividend yield. The absence of earnings call insights and corporate events does not impact the overall assessment.

Positive Factors

Revenue Growth

The significant revenue growth indicates strong demand for LTS's solutions and effective market penetration, supporting long-term business expansion.

Profitability

Improved profit margins reflect enhanced operational efficiency and cost management, which are critical for sustaining long-term profitability.

Balance Sheet Health

A strong balance sheet with manageable leverage and high ROE supports financial stability and growth initiatives, enhancing investor confidence.

Negative Factors

Cash Flow Conversion

The decline in free cash flow conversion indicates potential challenges in converting earnings to cash, which could impact liquidity and investment capacity.

Free Cash Flow to Net Income Ratio

A lower free cash flow to net income ratio suggests inefficiencies in cash management, which may limit the company's ability to fund new projects or return capital to shareholders.

Cash Flow Conversion Efficiency

While positive, the operating cash flow to net income ratio indicates room for improvement in cash conversion efficiency, crucial for sustaining operations and growth.

LTS, Inc. Business Overview & Revenue Model

Company Description

LTS, Inc. provides consulting, business process management, and digital utilization services in Japan. It offers business consulting services in the areas of business development, merger and acquisition, business revitalization, formulation of customer strategies and changes in customer channels, and construction of management foundations; IT consulting services in the areas of IT management support, support for IT implementation for project planning and introduction, new business transitions, IT development and construction of infrastructure, and IT outsourcing, as well as ERP system implementation, operation, and operational support; and HR consulting services related to business process performance measurement, human resource development, e-learning, and human resource development for process management. The company also provides business process management services, including business process modeling, performance measurement, transformation, and outsourcing, as well as outsourcing planning and human resource development for process management. In addition, it offers digital transformation services, such as technology research, advanced technology verification, data analysis, digital marketing, robotic process automation, artificial intelligence, and cloud integration. LTS, Inc. was incorporated in 2002 and is headquartered in Tokyo, Japan.

How the Company Makes Money

LTS, Inc. generates revenue through a multi-faceted business model primarily focused on product sales, subscription services, and consulting solutions. Key revenue streams include the sale of networking hardware and software licenses, which provide a one-time payment and ongoing maintenance contracts. Additionally, the company offers cloud-based services on a subscription basis, creating a steady income flow from recurring revenues. Strategic partnerships with major telecommunications providers and technology firms further enhance LTS's market reach and lead to joint ventures that can yield significant financial returns. The company also engages in consulting services, helping clients optimize their technology investments, which contributes to its overall revenue mix.

LTS, Inc. Financial Statement Overview

Summary

LTS, Inc. exhibits strong financial health with impressive revenue and profit growth, efficient operations, and a stable balance sheet. While cash flow conversion could improve, the company's overall financial position is robust, supporting its growth strategy in the consulting services industry.

Income Statement

LTS, Inc. has demonstrated strong revenue growth with a 35.5% increase from 2023 to 2024. The gross profit margin improved to 35.56%, and the net profit margin increased to 5.86%, indicating enhanced profitability. EBIT and EBITDA margins also show healthy operational efficiency at 6.67% and 11.10%, respectively. These metrics highlight the company's robust growth trajectory and profitability in the consulting services sector.

Balance Sheet

The company's balance sheet reflects a solid financial position with a debt-to-equity ratio of 0.85, indicating manageable leverage. The equity ratio stands at 40.03%, showcasing a strong equity base. Return on equity improved to 21.32%, reflecting efficient utilization of shareholder funds. Overall, LTS, Inc. maintains a stable and healthy balance sheet, supporting its growth initiatives.

Cash Flow

LTS, Inc. shows a positive operating cash flow to net income ratio of 0.80, indicating good cash generation relative to net income. However, free cash flow decreased slightly by 7.28% from 2023 to 2024. The free cash flow to net income ratio is 0.58, suggesting room for improvement in converting earnings to free cash flow. Despite this, the company maintains a strong cash position, supporting its operational needs.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.14B	16.59B	12.24B	9.64B	7.38B	5.56B
Gross Profit	5.97B	5.90B	4.27B	3.21B	2.63B	2.05B
EBITDA	1.76B	1.84B	897.00M	454.47M	636.32M	483.53M
Net Income	841.00M	973.00M	456.00M	232.58M	388.41M	270.33M
Balance Sheet
Total Assets	9.72B	11.40B	11.98B	5.60B	5.08B	4.30B
Cash, Cash Equivalents and Short-Term Investments	3.97B	5.45B	3.85B	2.98B	2.43B	2.68B
Total Debt	2.36B	3.88B	5.19B	682.22M	965.88M	1.19B
Total Liabilities	5.08B	6.84B	8.36B	2.35B	3.00B	2.57B
Stockholders Equity	4.64B	4.56B	3.57B	3.24B	2.08B	1.73B
Cash Flow
Free Cash Flow	0.00	560.00M	604.00M	-33.20M	331.65M	389.35M
Operating Cash Flow	0.00	777.00M	647.00M	255.25M	421.96M	468.93M
Investing Cash Flow	0.00	2.14B	-3.66B	-329.86M	-399.68M	-163.61M
Financing Cash Flow	0.00	-1.35B	4.07B	626.85M	-277.61M	988.73M

LTS, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2132.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6560, the sentiment is Positive. The current price of 2132 is below the 20-day moving average (MA) of 2183.96, below the 50-day MA of 2208.55, and below the 200-day MA of 2157.65, indicating a bullish trend. The MACD of 9.51 indicates Negative momentum. The RSI at 57.39 is Neutral, neither overbought nor oversold. The STOCH value of 78.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6560.

LTS, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7039	76 Outperform	¥7.43B	10.72	―	2.94%	8.00%	3.22%
6560	73 Outperform	¥10.32B	13.58	―	1.34%	5.97%	-5.60%
7034	71 Outperform	¥6.48B	32.41	―	―	283.85%	-35.61%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
4490	61 Neutral	¥4.78B	6.30	―	―	0.36%	―
9246	42 Neutral	¥6.72B	-20.34	―	―	-1.71%	-303.36%