Sophia Holdingus Co., Ltd. (6942) AI Stock Analysis

• Market Cap: ¥6.25B
• Dividend Yield: N/A
• Average Volume (3M): 2.38K
• Price to Earnings (P/E): 58.8
• Beta (1Y): 0.28
• Revenue Growth: -5.20%
• EPS Growth: 133.74%
• Country: JP
• Employees: 193
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 7.80
• Shares Outstanding: 4,677,720
• 10 Day Avg. Volume: 2,530
• 30 Day Avg. Volume: 2,380
• PEG Ratio: -0.31
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 0.58
• P/FCF Ratio: 27.75
• 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: 56 Neutral
• Price Target: ¥1,380.00 ▲(15.00% Upside)
• Action: Reiterated Date: 10/23/25
• Date: Action: Reiterated 10/23/25

The overall stock score is primarily influenced by moderate financial performance and technical analysis indicators. The company's financial health shows some strengths in equity growth but faces challenges in revenue and profitability. Technical indicators suggest a lack of strong momentum with potential overbought conditions. The high P/E ratio indicates overvaluation, further impacting the score.

Positive Factors

Improving Leverage & Equity Growth

A modest improvement in debt-to-equity alongside rising stockholders' equity indicates strengthening solvency and capital buffer. This durable improvement reduces refinancing risk, supports funding flexibility for capex or R&D, and improves creditor confidence over the medium term.

Positive Free Cash Flow (TTM)

Maintaining positive free cash flow in the trailing period, despite volatility, shows the business can generate internal funds. Persistent FCF provides a durable source for debt servicing, selective reinvestment, and resilience to downturns versus firms that rely heavily on external financing.

Stable Gross Margin & Positive EBITDA

Relatively stable gross margins combined with a positive EBITDA margin point to structural cost controls and core operational efficiency. These fundamentals suggest the company can retain pricing or cost advantages and has underlying profitability that can scale if revenue trends reverse.

Negative Factors

Declining Revenue & Negative EBIT

Sustained revenue decline and a negative EBIT in 2025 signal loss of scale and weakening operating performance. Over months this undermines pricing power and fixed-cost absorption, making recovery harder and increasing dependence on structural fixes to restore profitable growth.

Inconsistent Free Cash Flow Generation

Irregular free cash flow and recent declines limit predictable internal financing, forcing reliance on external capital or cost cuts to fund operations. Over 2–6 months this raises risk around investment pacing and debt servicing and constrains the company’s strategic optionality.

Suboptimal Equity Ratio & Volatile ROE

A non-ideal equity ratio and fluctuating ROE reflect uneven capital structure and returns generation. This structural weakness can elevate financing costs, limit borrowing capacity for growth, and reduce investor confidence unless improvements in profitability and capitalization persist.

Sophia Holdingus Co., Ltd. Business Overview & Revenue Model

Company Description

Sophia Holdingus Co., Ltd. (6942) is a diversified company engaged in multiple sectors, including technology, healthcare, and financial services. It specializes in providing innovative solutions and products that enhance operational efficiency and customer experience. The company's core offerings include software development, healthcare management systems, and financial advisory services, positioning it as a key player in the digital transformation landscape.

How the Company Makes Money

Sophia Holdingus Co., Ltd. generates revenue primarily through its diversified service portfolio. The company earns money by charging clients for software licenses and subscriptions, which provide access to its proprietary technology solutions. Additionally, the healthcare management systems division generates revenue through service contracts with hospitals and clinics, offering ongoing support and updates. The financial services segment contributes to earnings through consulting fees and commissions on transactions facilitated for clients. Strategic partnerships with technology providers and healthcare institutions enhance its market reach and revenue potential, allowing the company to leverage complementary strengths and expand its service offerings.

Sophia Holdingus Co., Ltd. Financial Statement Overview

Summary

Sophia Holdingus Co., Ltd. demonstrates moderate financial health with areas of concern in revenue and profitability. The income statement shows a decline in revenue and negative EBIT, while the balance sheet indicates improved leverage management. Cash flow is inconsistent but remains positive, reflecting some resilience.

Income Statement

The company has experienced a decline in revenue over the past few years, with a notable decrease from 2022 to 2025. Gross profit margin remains relatively stable, but there has been a significant drop in EBIT and net income margins. The company posted a negative EBIT for 2025, indicating operational challenges. Despite these struggles, the EBITDA margin remains positive, suggesting some underlying operational efficiency.

Balance Sheet

The debt-to-equity ratio has improved slightly over the years, indicating better leverage management. Stockholders' equity has shown growth, which is positive for financial health. However, the equity ratio is still not ideal, suggesting moderate risk. The company's return on equity has fluctuated but shows potential for improvement.

Cash Flow

The free cash flow has been inconsistent, with a notable decline in recent years. The operating cash flow to net income ratio indicates some operational cash flow generation issues. However, the company has managed to maintain positive free cash flow in the TTM period, reflecting some resilience.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	8.27B	8.36B	9.03B	9.42B	11.78B	11.38B
Gross Profit	3.06B	3.11B	3.38B	3.46B	4.01B	3.81B
EBITDA	615.64M	523.98M	536.01M	686.88M	1.34B	1.12B
Net Income	-12.28M	95.33M	-100.89M	21.11M	613.33M	501.87M
Balance Sheet
Total Assets	6.94B	7.46B	8.34B	7.40B	8.60B	8.61B
Cash, Cash Equivalents and Short-Term Investments	2.25B	2.75B	2.96B	2.02B	2.34B	2.12B
Total Debt	2.03B	2.43B	3.15B	3.28B	3.97B	4.67B
Total Liabilities	3.90B	4.43B	4.73B	5.38B	6.59B	7.22B
Stockholders Equity	3.04B	3.03B	3.11B	2.03B	2.00B	1.39B
Cash Flow
Free Cash Flow	0.00	175.15M	601.57M	373.63M	929.36M	1.20B
Operating Cash Flow	0.00	261.42M	633.80M	411.10M	1.07B	1.23B
Investing Cash Flow	0.00	377.55M	-27.15M	-38.55M	-150.91M	86.12M
Financing Cash Flow	0.00	-848.06M	332.13M	-693.70M	-696.11M	-793.37M

Sophia Holdingus Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1200.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6942, the sentiment is Positive. The current price of 1200 is below the 20-day moving average (MA) of 1289.95, below the 50-day MA of 1248.16, and above the 200-day MA of 1189.18, indicating a bullish trend. The MACD of 22.37 indicates Negative momentum. The RSI at 90.69 is Negative, neither overbought nor oversold. The STOCH value of 84.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6942.

Sophia Holdingus Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4486	77 Outperform	¥5.26B	12.68	―	1.55%	15.64%	-5.48%
3920	74 Outperform	¥5.31B	14.13	―	1.21%	10.06%	62.77%
3988	68 Neutral	¥5.79B	14.40	―	1.23%	11.62%	-16.59%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
2375	61 Neutral	¥4.62B	16.40	―	0.94%	-12.25%	―
2493	57 Neutral	¥4.45B	30.30	―	0.53%	17.13%	-41.14%
6942	56 Neutral	¥6.25B	58.81	―	―	-5.20%	133.74%