TDSE Inc. (7046) AI Stock Analysis

• Market Cap: ¥3.31B
• Dividend Yield: 0.69%
• Average Volume (3M): 2.85K
• Price to Earnings (P/E): 29.1
• Beta (1Y): 1.10
• Revenue Growth: 12.15%
• EPS Growth: -33.34%
• Country: JP
• Employees: 145
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 13.88
• Shares Outstanding: 2,200,000
• 10 Day Avg. Volume: 3,100
• 30 Day Avg. Volume: 2,846
• PEG Ratio: -0.62
• Price to Book (P/B): 1.22
• Price to Sales (P/S): 1.00
• P/FCF Ratio: 0.00
• 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: 66 Neutral
• Price Target: ¥1,715.00 ▲(10.93% Upside)

The score is primarily supported by strong financial positioning (especially the very low-debt balance sheet) and solid revenue growth, but is held back by margin compression and inconsistent free cash flow. Technicals are mixed (uptrend vs. negative MACD), and valuation looks on the expensive side with a low dividend yield.

Positive Factors

Conservative balance sheet

Extremely low leverage provides durable financial flexibility and resilience to economic shocks. With minimal debt the company can fund growth, R&D, or acquisitions from equity or operating cash, lowering default risk and preserving strategic optionality over the next 2–6 months and beyond.

Multi-year revenue expansion

Sustained revenue growth over multiple years signals persistent market demand and successful commercial execution. This scale increase supports longer-term investments in product development and client relationships, enhancing competitive position and reducing single-period dependence on volatile contracts.

Healthy service gross margins

Maintained gross margin in a services business indicates structural pricing power and cost efficiency at the delivery level. Even with recent margin pressure, a healthy gross margin provides a buffer to absorb SG&A or investment spending while preserving long-term operating profitability potential.

Negative Factors

Margin compression

Declining net and operating margins point to structural headwinds such as rising input costs, pricing pressure, or mix shift. Persistent margin erosion reduces retained earnings and reinvestment capacity, weakening long-term returns on capital and making growth more expensive to finance.

Inconsistent free cash flow

Volatile cash conversion and a reported zero FCF in 2025 undermine earnings quality and constrain strategic choices. Inconsistent FCF complicates dividend policy, capex planning, and acquisitions, and increases reliance on equity issuance or cost cuts to finance growth over the medium term.

Low trading liquidity

Limited average trading volume signals low liquidity, which can deter institutional investors and raise transaction costs for shareholders. Structurally low liquidity can impede equity raises, amplify price swings on news, and restrict the investor base available for long-term support.

TDSE Inc. Business Overview & Revenue Model

Company Description

TDSE Inc. primarily provides consulting services on information processing and computer systems in Japan. The company offers DX and analytics consulting, SNS analysis, analysis base construction, and analysis operation and application development services; and IoT data utilization, learning utilization, and data scientist development support services. It also provides Scorobo, an artificial intelligence engine for use in finance, digital marketing, manufacture, social infrastructure, human resources, and telematics industries; and NetBase, a social listening tool for enterprise social analytics. The company was formerly known as Tecnos Data Science Engineering Incorporated and changed its name to TDSE Inc. in November 2021. TDSE Inc. was incorporated in 2013 and is based in Tokyo, Japan.

How the Company Makes Money

TDSE Inc. Financial Statement Overview

Summary

TDSE Inc. is in a strong financial position with consistent revenue growth and robust profitability metrics. The balance sheet is stable with low leverage, highlighted by a high equity ratio and minimal debt. However, the lack of recent cash flow data introduces some uncertainty, though historical performance suggests resilience.

Income Statement

TDSE Inc. has demonstrated impressive revenue growth, with a CAGR of over 10% from 2020 to TTM. The gross profit margin remains strong at around 34.9% for TTM, showcasing effective cost management. The net profit margin has been healthy, reflecting consistent profitability. However, a slight decline in EBIT margin from the previous year suggests potential operational cost pressures.

Balance Sheet

The balance sheet is robust with a high equity ratio of approximately 86.2% for TTM, indicating strong equity financing and low leverage. The debt-to-equity ratio is minimal, reflecting excellent financial stability. Return on equity remains solid at around 8.4% for TTM, indicating efficient use of equity capital.

Cash Flow

Cash flow analysis shows volatility with zero operating and free cash flow in TTM due to missing data. Historically, cash flow generation has been positive, but the recent lack of data presents uncertainty. The free cash flow to net income ratio was healthy in previous periods, indicating efficient cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.75B	2.70B	2.52B	2.42B	1.72B	1.32B
Gross Profit	950.31M	925.08M	895.36M	850.92M	705.60M	469.28M
EBITDA	195.37M	224.07M	284.20M	275.75M	226.82M	288.61M
Net Income	115.43M	136.56M	200.28M	168.81M	148.33M	190.88M
Balance Sheet
Total Assets	2.65B	2.73B	2.44B	2.34B	2.05B	1.80B
Cash, Cash Equivalents and Short-Term Investments	1.83B	1.96B	1.79B	1.78B	1.61B	1.44B
Total Debt	1.00M	931.00K	2.11M	2.51M	0.00	0.00
Total Liabilities	453.00M	522.82M	365.43M	470.37M	343.24M	213.62M
Stockholders Equity	2.19B	2.21B	2.07B	1.87B	1.71B	1.59B
Cash Flow
Free Cash Flow	0.00	0.00	46.91M	192.86M	215.74M	39.62M
Operating Cash Flow	0.00	197.35M	107.18M	195.39M	224.14M	47.34M
Investing Cash Flow	0.00	-11.70M	-68.65M	-12.80M	-13.13M	1.01B
Financing Cash Flow	0.00	-22.06M	-21.67M	-20.53M	-40.76M	-520.50M

TDSE Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1546.00
• 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:7046, the sentiment is Positive. The current price of 1546 is above the 20-day moving average (MA) of 1471.65, below the 50-day MA of 1562.12, and above the 200-day MA of 1507.91, indicating a bullish trend. The MACD of 12.45 indicates Negative momentum. The RSI at 60.64 is Neutral, neither overbought nor oversold. The STOCH value of 75.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7046.

TDSE Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4421	72 Outperform	¥2.98B	11.04	―	2.86%	5.74%	5.97%
4394	70 Outperform	¥2.45B	19.15	―	2.59%	14.23%	1440.00%
7046	66 Neutral	¥3.31B	29.12	―	0.69%	12.15%	-33.34%
3970	66 Neutral	¥2.55B	-11.08	―	4.29%	15.64%	-268.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5618	46 Neutral	¥2.71B	-9.35	―	―	23.63%	64.65%
4427	39 Underperform	¥2.67B	162.61	―	―	-12.77%	―