Softbank (SFTBY) AI Stock Analysis

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Softbank

(OTC:SFTBY)

Rating:58Neutral

Price Target:―

Softbank's stock score reflects significant financial challenges, particularly in profitability and cash flow, which weigh heavily on its performance. The technical analysis suggests ongoing positive momentum, but with a cautionary note on short-term overbought conditions. Valuation metrics hint at potential undervaluation, adding some support to the stock's outlook. However, without recent earnings call insights or notable corporate events, these factors form the primary basis for the current assessment.

Softbank (SFTBY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$80.33B

Dividend Yield0.36%

Average Volume (3M)592.18K

Price to Earnings (P/E)10.7

Beta (1Y)1.95

Revenue Growth-2.23%

EPS GrowthN/A

CountryUS

Employees65,352

SectorCommunication Services

Sector Strength90

IndustryTelecommunications Services

Share Statistics

EPS (TTM)1.21

Shares Outstanding2,939,990,500

10 Day Avg. Volume656,262

30 Day Avg. Volume592,184

Financial Highlights & Ratios

PEG Ratio0.11

Price to Book (P/B)0.45

Price to Sales (P/S)0.00

P/FCF Ratio37.41

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$32.20

Price Target Upside16.58% Upside

Rating ConsensusHold

Number of Analyst Covering0

Softbank Business Overview & Revenue Model

Company DescriptionSoftBank Group Corp. is a multinational conglomerate holding company headquartered in Tokyo, Japan. The company operates in various sectors including telecommunications, internet services, AI, smart robotics, IoT, and investment management. SoftBank is known for its significant investments in technology companies globally, often through its Vision Fund, which targets emerging businesses in areas like AI, robotics, and other innovative technologies. The company also provides mobile and broadband services, primarily in Japan, under its telecommunications division.

How the Company Makes MoneySoftBank makes money through a diverse range of revenue streams primarily from its telecommunications business, investment management, and strategic partnerships. The telecommunications sector, which includes mobile and broadband services in Japan, is a major source of revenue, generating income from subscriber fees and related services. Another significant revenue stream comes from SoftBank's investments, particularly through its Vision Fund, which holds stakes in numerous tech companies worldwide. Profits are realized through capital gains when these investments appreciate in value or are divested profitably. Additionally, SoftBank benefits from strategic partnerships and joint ventures with other companies, which can include revenue-sharing agreements and collaborative business ventures that enhance its overall earnings.

Softbank Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q2-2024)

% Change Since: 3.80%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a mixed outlook for SoftBank Group. While there were significant achievements such as the successful ARM IPO and improved Vision Fund performance, challenges like the negative net income, WeWork's bankruptcy, and the persistent SoftBank discount were notable issues. The company's focus on AI investments suggests a strategic direction towards future growth.

Q2-2024 Updates

Positive Updates

Successful ARM IPO

ARM's IPO was a major event, with a market cap of $52 billion upon listing. The share price has exceeded the listing price, and ARM is seen as a core strategic company for SoftBank, expected to lead AI-related services.

Improved Vision Fund Performance

Vision Fund's loss reduced to JPY 583 billion from JPY 4.3 trillion a year ago, indicating significant improvement in investment performance.

Increased Net Asset Value

Net asset value increased by JPY 1 trillion compared to the end of June, reaching JPY 16.4 trillion, reflecting a positive trend.

Strong Cash Position

The cash position is strong at JPY 5.1 trillion, providing a safety net for future investments and operations.

Positive AI Investment Outlook

SoftBank is actively investing in AI, with significant investments in companies like ByteDance and Swiggy, indicating a strategic focus on AI-driven growth.

Negative Updates

Negative Net Income

The company reported a negative net income of JPY 1.4 trillion, continuing the negative trend from the previous year.

WeWork Bankruptcy Impact

WeWork's bankruptcy filing under Chapter 11 was acknowledged, with SoftBank taking a significant hit due to its investment decisions.

SoftBank Discount Persisting

The gap between the net asset value per share and the actual share price remains wide, raising concerns about market perception and valuation.

Company Guidance

During the Q2 2024 earnings call for SoftBank Group Corp, the executive team, including Yoshimitsu Goto and Kazuko Kimiwada, provided several key metrics and updates. The IPO of ARM was highlighted as a significant event, with a market capitalization upon listing of $52 billion, and SoftBank Group's investment in ARM yielding a MOIC of 3.2x. The group's net income was reported as negative JPY 1.4 trillion, with Vision Fund investments showing improvement, posting a negative JPY 583 billion compared to the previous year's JPY 4.3 trillion loss. The net asset value increased by JPY 1 trillion to JPY 16.4 trillion, while the cash position stood at JPY 5.1 trillion. Additionally, SoftBank Group's loan-to-value ratio remained at a safe level of 10%, well below the policy cap of 25%. The call also delved into ARM's future prospects, highlighting its strong market share in mobile, cloud, automotive, and IoT sectors, with quarterly revenue reaching a record high and non-GAAP operating profit up by 92% year-on-year.

Softbank Financial Statement Overview

Summary

Softbank's financials reflect a company facing profitability and liquidity challenges, with high leverage adding risk. While revenue and operational efficiencies are present, consistent losses and cash flow issues undermine financial health. The significant asset base provides a cushion, but strategic improvements are necessary for sustainable growth and stability.

Income Statement

Negative

Softbank's income statement shows a mixed performance. The gross profit margin is healthy, but the net profit margin is negative, indicating ongoing issues with profitability. The revenue growth rate is volatile, with recent declines. The EBIT and EBITDA margins are positive, reflecting some operational efficiency, but the negative net income is a concern.

Balance Sheet

Neutral

The balance sheet reveals a high debt-to-equity ratio, suggesting significant leverage and potential financial risk. The equity ratio is moderate, and return on equity is negative due to net losses, further highlighting profitability challenges. However, the company maintains substantial assets and cash reserves, providing some stability.

Cash Flow

Neutral

Cash flow analysis shows negative free cash flow growth, indicating cash outflow issues. The operating cash flow to net income ratio is positive, suggesting cash generation despite losses. However, the free cash flow to net income ratio is concerning, with free cash flow also negative, pointing to liquidity pressures.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
6.90T	6.76T	6.57T	6.22T	5.63T	6.19T
	Gross Profit
3.63T	3.54T	3.33T	3.27T	2.87T	2.70T
	EBIT
-25.01B	560.01B	632.71B	713.85B	603.43B	-1.36T
	EBITDA
869.71B	1.47T	1.53T	-47.75B	6.21T	109.78B
	Net Income Common Stockholders
75.69B	-227.65B	-970.14B	-1.71T	4.99T	-961.58B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.50T	6.19T	7.30T	6.09T	7.80T	3.68T
	Total Assets
47.83T	46.72T	43.94T	47.54T	45.75T	37.26T
	Total Debt
21.60T	21.36T	20.32T	22.32T	19.55T	14.27T
	Net Debt
16.10T	15.18T	13.39T	17.15T	14.89T	10.90T
	Total Liabilities
33.63T	33.49T	33.29T	35.84T	33.79T	29.88T
	Stockholders Equity
12.12T	10.97T	9.03T	9.98T	10.21T	5.91T
Cash Flow		Free Cash Flow
209.71B	-372.06B	107.53B	1.89T	-89.64B	-114.67B
	Operating Cash Flow
840.86B	250.55B	741.29B	2.73T	557.25B	1.12T
	Investing Cash Flow
-1.72T	-841.46B	547.58B	-3.02T	-1.47T	-4.29T
	Financing Cash Flow
-907.70B	-606.22B	191.52B	602.22B	2.19T	2.92T

Softbank Technical Analysis

Technical Analysis Sentiment

Positive

Last Price27.62

Price Trends

50DMA

25.28

Positive

100DMA

27.17

Positive

200DMA

28.32

Negative

Market Momentum

MACD

0.31

Negative

RSI

62.31

Neutral

STOCH

85.07

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SFTBY, the sentiment is Positive. The current price of 27.62 is above the 20-day moving average (MA) of 26.52, above the 50-day MA of 25.28, and below the 200-day MA of 28.32, indicating a neutral trend. The MACD of 0.31 indicates Negative momentum. The RSI at 62.31 is Neutral, neither overbought nor oversold. The STOCH value of 85.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SFTBY.

Softbank Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHT	76 Outperform	$34.49B	29.61	9.59%	2.56%	-0.19%	-0.79%
VZ	76 Outperform	$186.06B	10.48	18.23%	6.14%	0.93%	56.97%
TMUS	75 Outperform	$269.08B	23.10	19.35%	1.49%	5.31%	38.46%
AMX	71 Outperform	$52.40B	31.20	8.54%	2.87%	0.19%	-49.68%
T	69 Neutral	$204.50B	17.45	11.38%	3.91%	0.50%	-12.66%
Sector *	61 Neutral	$14.79B	5.90	-3.99%	6.20%	2.67%	-30.30%
SFTBY	58 Neutral	$80.33B	10.73	10.28%	0.36%	-2.23%	―

* Communication Services Sector Average

Performance Comparison

SFTBY

Softbank

27.62

-3.55

-11.39%

AMX

America Movil

17.09

0.75

4.59%

AT&T

28.34

11.54

68.69%

CHT

Chunghwa Telecom Co

44.39

6.16

16.11%

Verizon

43.74

6.47

17.36%

TMUS

T Mobile US

230.94

58.24

33.72%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.