Inspec Inc. (6656) AI Stock Analysis

• Market Cap: ¥2.32B
• Dividend Yield: N/A
• Average Volume (3M): 18.14K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.13
• Revenue Growth: 15.80%
• EPS Growth: 43.81%
• Country: JP
• Employees: 84
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -36.35
• Shares Outstanding: 4,012,800
• 10 Day Avg. Volume: 12,560
• 30 Day Avg. Volume: 18,143
• PEG Ratio: 0.28
• Price to Book (P/B): 2.45
• Price to Sales (P/S): 1.05
• P/FCF Ratio: 4.91
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 49 Neutral
• Price Target: ¥632.00 ▲(4.46% Upside)

Inspec Inc.'s overall stock score reflects its mixed financial performance, with revenue growth but negative profitability and high leverage. Technical analysis indicates a bearish trend, and valuation is weak due to a negative P/E ratio. These factors combined result in a below-average stock score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for Inspec Inc.'s services, enhancing its market position and potential for future expansion.

Cash Flow Generation

Strong cash flow generation supports liquidity and provides flexibility for reinvestment in technology and expansion, bolstering long-term business resilience.

Partnerships and Contracts

These partnerships enhance credibility and lead to long-term contracts, ensuring a steady revenue stream and reinforcing Inspec Inc.'s competitive advantage.

Negative Factors

Profitability Challenges

Ongoing profitability issues highlight operational inefficiencies, which could hinder reinvestment and growth if not addressed, impacting long-term sustainability.

High Leverage

High leverage increases financial risk and limits flexibility, potentially affecting the company's ability to navigate economic downturns or invest in growth opportunities.

Negative Return on Equity

Negative ROE indicates insufficient returns on shareholder investment, which may deter potential investors and affect the company's ability to raise capital.

Inspec Inc. Business Overview & Revenue Model

Company Description

Inspec Inc. (6656) is a leading provider of advanced inspection and quality assurance solutions, specializing in the manufacturing, aerospace, and automotive sectors. The company offers a comprehensive range of products and services, including automated inspection systems, non-destructive testing, and quality management software, aimed at improving operational efficiency and ensuring compliance with industry standards. Inspec Inc. is committed to innovation and leveraging cutting-edge technology to enhance the accuracy and reliability of inspections across various applications.

How the Company Makes Money

Inspec Inc. generates revenue primarily through the sale of inspection equipment and systems, as well as service contracts for maintenance and support. Key revenue streams include direct product sales, subscription fees for software solutions, and consulting services related to quality assurance processes. The company has established significant partnerships with major manufacturers and industry leaders, allowing it to expand its market reach and enhance its product offerings. Additionally, Inspec Inc. benefits from recurring revenue through ongoing service agreements and training programs, which provide a steady income stream while fostering long-term relationships with clients.

Inspec Inc. Financial Statement Overview

Summary

Inspec Inc. shows revenue growth but struggles with profitability, as indicated by negative net and EBIT margins. The balance sheet reveals high leverage, posing financial risks, though cash flow performance is improving with strong free cash flow generation.

Income Statement

Inspec Inc. shows a mixed performance in its income statement. The company has experienced revenue growth of 5.02% in the latest year, indicating a positive trend. However, the net profit margin is negative at -6.36%, reflecting ongoing profitability challenges. The gross profit margin of 40.43% is strong, but the negative EBIT margin of -4.29% highlights operational inefficiencies. Overall, while revenue is growing, profitability remains a concern.

Balance Sheet

The balance sheet of Inspec Inc. presents a moderate risk profile. The debt-to-equity ratio is high at 1.75, indicating significant leverage, which could pose financial risks. The return on equity is negative at -14.84%, suggesting that the company is not generating sufficient returns on shareholders' equity. However, the equity ratio of 31.95% provides some stability, showing a reasonable proportion of equity financing.

Cash Flow

Inspec Inc.'s cash flow statement shows improvement, with a substantial free cash flow growth rate of 52.56%. The operating cash flow to net income ratio is 0.38, indicating that operating cash flows are covering net income to some extent. The free cash flow to net income ratio is high at 87.73%, suggesting that the company is generating significant free cash flow relative to its net income, which is a positive sign for liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.13B	2.24B	1.67B	2.29B	1.76B	1.27B
Gross Profit	801.50M	904.69M	596.71M	845.81M	662.68M	457.16M
EBITDA	172.30M	30.48M	-258.07M	229.42M	236.61M	-1.13B
Net Income	-26.45M	-142.27M	-353.83M	78.84M	155.40M	-1.20B
Balance Sheet
Total Assets	3.44B	3.00B	3.76B	3.98B	3.28B	2.70B
Cash, Cash Equivalents and Short-Term Investments	573.37M	540.33M	738.59M	605.14M	696.78M	781.18M
Total Debt	2.11B	1.67B	2.34B	2.20B	1.77B	1.35B
Total Liabilities	2.39B	2.04B	2.68B	2.57B	2.19B	1.80B
Stockholders Equity	1.05B	958.56M	1.08B	1.41B	1.09B	904.25M
Cash Flow
Free Cash Flow	312.81M	477.22M	905.00K	-722.67M	-475.51M	-300.24M
Operating Cash Flow	312.81M	543.97M	102.82M	-589.11M	-175.68M	-153.72M
Investing Cash Flow	0.00	-66.75M	-77.87M	-163.56M	-329.12M	-174.79M
Financing Cash Flow	0.00	-675.48M	132.40M	630.92M	390.73M	-36.61M

Inspec Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 605.00
• 50DMA: Negative
• 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:6656, the sentiment is Neutral. The current price of 605 is above the 20-day moving average (MA) of 587.20, below the 50-day MA of 620.44, and below the 200-day MA of 670.13, indicating a neutral trend. The MACD of -2.40 indicates Negative momentum. The RSI at 51.21 is Neutral, neither overbought nor oversold. The STOCH value of 40.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:6656.

Inspec Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6627	79 Outperform	¥50.76B	16.33	―	1.85%	3.60%	-17.45%
6337	72 Outperform	¥10.87B	21.23	―	3.58%	-14.79%	-41.15%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6656	49 Neutral	¥2.32B	-14.38	―	―	15.80%	43.81%
6613	46 Neutral	¥15.79B	―	―	―	18.18%	56.08%
6614	46 Neutral	¥3.32B	-68.31	―	2.07%	-2.80%	-129.64%
6616	45 Neutral	¥17.86B	-7.46	―	3.65%	-6.84%	50.71%