NexTone Inc (7094) AI Stock Analysis

• Market Cap: ¥19.11B
• Dividend Yield: N/A
• Average Volume (3M): 178.57K
• Price to Earnings (P/E): 25.5
• Beta (1Y): 0.62
• Revenue Growth: 24.57%
• EPS Growth: 33.59%
• Country: JP
• Employees: 298
• Sector: Industrials
• Sector Strength: 70
• Industry: Specialty Business Services
• EPS (TTM): 21.55
• Shares Outstanding: 9,940,800
• 10 Day Avg. Volume: 121,700
• 30 Day Avg. Volume: 178,573
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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

• Rating: 74 Outperform
• Price Target: ―

NexTone Inc demonstrates strong financial performance with robust revenue growth and a debt-free balance sheet, which are significant strengths. However, the decrease in free cash flow presents a risk that needs to be addressed. The technical indicators suggest a bearish trend, which may concern some investors, while the valuation indicates fair pricing. Overall, NexTone Inc is well-positioned in its industry but must manage cash flow effectively to maintain its growth trajectory.

Positive Factors

Revenue Growth

The company's robust revenue growth indicates its ability to expand market reach and capitalize on opportunities, ensuring long-term business sustainability.

Debt-Free Balance Sheet

A debt-free balance sheet enhances financial stability, providing flexibility for strategic investments and growth without the burden of interest obligations.

Market Position

Strong sales growth underscores NexTone's competitive market position, reflecting effective strategies in capturing market share and driving long-term success.

Negative Factors

Free Cash Flow Challenges

Decreasing free cash flow may hinder the company's ability to fund operations and investments, posing a risk to sustaining growth and financial health.

Decline in Comprehensive Income

The decline in comprehensive income could indicate underlying cost pressures or inefficiencies, potentially impacting profitability and long-term financial performance.

Zero Dividend Payments

Zero dividend payments may deter income-focused investors and suggest a focus on reinvestment, which could affect investor sentiment and stock attractiveness.

NexTone Inc Business Overview & Revenue Model

Company Description

NexTone Inc (7094) is a Japanese company specializing in music copyright management and digital content distribution. The company operates within the entertainment and technology sectors, offering services that enable efficient licensing and monetization of music and related digital content. NexTone provides comprehensive rights management solutions catering to artists, composers, and publishers, ensuring their creative works are properly licensed and monetized across various platforms.

How the Company Makes Money

NexTone Inc generates revenue through its core services of music copyright management and digital content distribution. The company earns money primarily via the collection and distribution of royalties on behalf of artists, composers, and publishers. By providing licensing solutions, NexTone facilitates the use of music in digital and physical formats, ensuring that creators receive proper compensation for their works. Additionally, the company may engage in strategic partnerships with digital platforms and other entities in the entertainment industry to expand its reach and increase revenue opportunities. These partnerships often involve revenue-sharing agreements that further contribute to NexTone's earnings.

NexTone Inc Financial Statement Overview

Summary

NexTone Inc shows strong financial health with impressive revenue growth, profitability, and a debt-free balance sheet that enhances financial stability. The consistent increase in revenue and profit margins highlights operational efficiency. However, challenges in generating free cash flow in the recent period could signal potential cash management issues. Overall, the company is well-positioned for growth in the Specialty Business Services industry, but attention to cash flow management is necessary.

Income Statement

NexTone Inc has demonstrated strong revenue growth with a TTM revenue of ¥18.94 billion, up from ¥13.43 billion in the previous annual period. The gross profit margin is solid at 24.84%, and the net profit margin is healthy at 2.91%. EBIT and EBITDA margins at 3.81% and 5.95% respectively indicate stable operational efficiency. Consistent revenue and profit growth highlight the company's ability to expand and capitalize on market opportunities.

Balance Sheet

NexTone Inc exhibits a robust balance sheet with no debt, resulting in a debt-to-equity ratio of 0. The equity ratio stands at a strong 33.70%, showcasing financial stability. Return on equity (ROE) is healthy at 12.26%, reflecting effective use of shareholder funds. The company maintains substantial cash reserves, ensuring ample liquidity and financial flexibility.

Cash Flow

Free cash flow has decreased to zero in the TTM period from ¥636.82 million in the previous annual period, indicating potential challenges in generating cash from operations. However, the operating cash flow to net income ratio is not calculable due to zero operating cash flow in the TTM period, which could suggest fluctuations in cash flow management. The company needs to address cash flow generation to sustain operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	19.41B	19.41B	13.43B	8.81B	7.49B	6.12B
Gross Profit	4.83B	4.83B	3.50B	2.41B	2.04B	1.64B
EBITDA	1.56B	1.56B	1.12B	992.86M	846.20M	654.60M
Net Income	693.00M	692.00M	531.13M	631.27M	482.55M	376.98M
Balance Sheet
Total Assets	14.83B	14.83B	13.16B	7.82B	6.55B	5.59B
Cash, Cash Equivalents and Short-Term Investments	9.63B	9.63B	8.05B	6.04B	5.19B	4.44B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	9.12B	9.12B	8.01B	4.25B	3.63B	3.02B
Stockholders Equity	4.76B	4.76B	4.05B	3.57B	2.92B	2.58B
Cash Flow
Free Cash Flow	0.00	2.05B	636.82M	898.74M	893.63M	1.05B
Operating Cash Flow	0.00	2.15B	1.38B	1.16B	1.12B	1.26B
Investing Cash Flow	0.00	-569.00M	695.96M	-323.78M	-228.02M	-213.22M
Financing Cash Flow	0.00	0.00	-65.68M	12.44M	-140.11M	79.74M

NexTone Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1922.00
• 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:7094, the sentiment is Positive. The current price of 1922 is above the 20-day moving average (MA) of 1917.95, above the 50-day MA of 1900.94, and above the 200-day MA of 1576.22, indicating a bullish trend. The MACD of -1.07 indicates Negative momentum. The RSI at 50.91 is Neutral, neither overbought nor oversold. The STOCH value of 67.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7094.

NexTone Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7373	79 Outperform	¥42.89B	22.89		1.07%	22.71%	84.60%
7094	74 Outperform	¥19.11B	25.45		―	24.57%	33.59%
5845	73 Outperform	¥23.84B	13.33		3.75%	4.03%	10.49%
4809	72 Outperform	¥20.34B	10.15		3.19%	9.52%	17.18%
7814	67 Neutral	¥42.60B	14.42		1.47%	7.37%	15.48%
9216	65 Neutral	¥21.61B	47.64		5.03%	-4.78%	-75.47%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

NexTone Inc Corporate Events

NexTone Inc. Reports Strong Sales Growth Despite Decline in Comprehensive Income

NexTone Inc. has reported its consolidated financial results for the nine months ending December 31, 2024, with a significant increase in net sales of 63% compared to the same period in the previous year. Despite a decrease in comprehensive income by 21.8%, the company forecasts continued growth for the fiscal year ending March 31, 2025, with expected net sales of 20,000 million yen, indicating a nearly 49% increase. This financial performance highlights the company’s strong market position and potential optimistic growth trajectory, although dividend payments remain at zero, reflecting a cautious approach towards shareholder returns.