Softbank (SFTBY) AI Stock Analysis

• Market Cap: $177.64B
• Dividend Yield: 0.16%
• Average Volume (3M): 901.09K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 2.16
• Revenue Growth: 6.31%
• EPS Growth: 3932.00%
• Country: US
• Employees: 65,352
• Sector: Communication Services
• Sector Strength: 96
• Industry: Telecommunications Services
• EPS (TTM): 0.99
• Shares Outstanding: 2,939,990,500
• 10 Day Avg. Volume: 647,002
• 30 Day Avg. Volume: 901,089
• 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: 1.22
• Enterprise Value/Revenue: 0.03
• Enterprise Value/Gross Profit: 0.06
• Enterprise Value/Ebitda: 0.14
• 1Y Price Target: $56.00
• Price Target Upside: -8.42% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 64 Neutral
• Price Target: $56.00 ▼(-8.42% Downside)

Softbank's overall stock score is driven primarily by its financial performance challenges, particularly high leverage and cash flow issues. The strong technical indicators provide a positive outlook, but the overbought conditions warrant caution. Valuation metrics suggest the stock may be undervalued, offering potential upside.

Positive Factors

Investment in Semiconductor Industry

SoftBank's strategic investment in Intel underscores its commitment to the semiconductor sector, a critical industry for technological advancement, ensuring long-term growth potential and alignment with global tech trends.

AI Infrastructure Expansion

The collaboration with Foxconn to build AI hardware in Ohio reflects SoftBank's strategic push into AI infrastructure, positioning it to capitalize on the growing demand for AI technologies and infrastructure.

Improved Profit Margins

The significant improvement in net profit margins indicates enhanced operational efficiency and profitability, providing a solid foundation for sustainable financial health and shareholder value.

Negative Factors

High Leverage

SoftBank's high leverage poses financial risks, potentially limiting its ability to invest in new opportunities and increasing vulnerability to economic downturns, impacting long-term stability.

Cash Flow Challenges

The negative free cash flow growth rate highlights significant cash flow challenges, which could constrain SoftBank's ability to fund operations and investments, affecting long-term growth prospects.

Low Operating Cash Flow to Net Income Ratio

A low operating cash flow to net income ratio suggests potential issues in cash generation relative to reported profits, indicating that profitability may not be translating into actual cash flow, affecting financial flexibility.

Softbank Business Overview & Revenue Model

Company Description

SoftBank Group Corp. provides telecommunication services in Japan and internationally. It operates through five segments: Investment Business of Holding Companies, SoftBank Vision Funds, SoftBank, Arm, and Latin America Funds. The company offers mobile communications, broadband, and fixed-line communications services; and sells mobile devices. It is also involved in the internet advertising marketing, online advertising distribution, and e-book distribution services; planning and operation of fashion e-commerce website; mail-order sale of stationery and services; and design and development of mobile robots. In addition, the company designs microprocessor intellectual property and related technology; sells software tools; and generates, supplies, and sells electricity from renewable energy sources, as well as offers related services. Further, it provides alternative investment management, smartphone payment, PC software downloads, and banking services, as well as solutions and services for online businesses; distributes video, voice, and data content; manufactures, distributes, and sells IT-related products, as well as IT-related services; and manages funds. Additionally, the company operates a professional baseball team; and ITmedia, an IT information site, as well as manages and maintains baseball stadium and other sports facilities. It also plans and operates ZOZOTOWN, ZOZO, and ZOZOBASE websites. The company was formerly known as SoftBank Corp. and changed its name to SoftBank Group Corp. in July 2015. SoftBank Group Corp. was incorporated in 1981 and is headquartered in Tokyo, Japan.

How the Company Makes Money

SoftBank generates revenue through multiple streams. Primarily, it earns income from its telecommunications operations, including mobile and broadband services provided to millions of customers in Japan. Additionally, the company's investment arm, the SoftBank Vision Fund, contributes significantly to its earnings by investing in high-potential startups and established companies in various sectors, particularly technology. The returns from these investments, both through capital appreciation and exits via IPOs or acquisitions, are crucial for SoftBank's revenue. Strategic partnerships with global tech firms and investment in emerging technologies further bolster its earnings potential. Furthermore, the company has stakes in various subsidiaries and associate companies, allowing it to benefit from dividends and profits generated by these entities.

Softbank Financial Statement Overview

Summary

Softbank's financial performance shows a recovery in profitability with improved net profit margins. However, high leverage and significant cash flow challenges, including a negative free cash flow growth rate, weigh heavily on the score.

Income Statement

Softbank's income statement shows a modest revenue growth rate of 2.64% in the latest year, with a strong gross profit margin of 51.83%. The net profit margin improved significantly from a negative position in previous years to 15.92%, indicating a turnaround in profitability. However, the EBIT margin remains relatively low at 10.07%, suggesting room for operational efficiency improvements.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 1.64, indicating significant leverage, which could pose financial risks. The return on equity is 9.98%, showing moderate profitability relative to equity. The equity ratio stands at 25.68%, suggesting a balanced but cautious approach towards asset financing.

Cash Flow

Cash flow analysis reveals challenges, with a negative free cash flow growth rate of -1482.56%, indicating cash outflows exceeding inflows. The operating cash flow to net income ratio is low at 0.016, highlighting potential issues in cash generation relative to reported profits. The free cash flow to net income ratio is negative, reflecting cash flow difficulties.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.24T	7.24T	6.76T	6.57T	6.22T	5.63T
Gross Profit	3.75T	3.75T	3.54T	3.33T	3.27T	2.87T
EBITDA	1.60T	1.60T	1.47T	1.53T	1.57T	6.21T
Net Income	1.15T	1.15T	-227.65B	-970.14B	-1.71T	4.99T
Balance Sheet
Total Assets	45.01T	45.01T	46.72T	43.94T	47.54T	45.75T
Cash, Cash Equivalents and Short-Term Investments	3.71T	3.71T	6.44T	7.30T	6.09T	7.80T
Total Debt	18.91T	18.91T	16.19T	20.32T	22.32T	19.55T
Total Liabilities	31.06T	31.06T	33.49T	33.29T	35.84T	33.79T
Stockholders Equity	11.56T	11.56T	10.97T	9.03T	9.98T	10.21T
Cash Flow
Free Cash Flow	-650.59B	-650.59B	-372.06B	107.53B	1.89T	-89.64B
Operating Cash Flow	203.58B	203.58B	250.55B	741.29B	2.73T	557.25B
Investing Cash Flow	-1.63T	-1.63T	-841.46B	547.58B	-3.02T	-1.47T
Financing Cash Flow	-1.12T	-1.12T	-606.22B	191.52B	602.22B	2.19T

Softbank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 61.15
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 61.15 is above the 20-day moving average (MA) of 53.57, above the 50-day MA of 45.42, and above the 200-day MA of 32.52, indicating a bullish trend. The MACD of 3.43 indicates Negative momentum. The RSI at 69.76 is Neutral, neither overbought nor oversold. The STOCH value of 95.36 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SFTBY.

Softbank Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VZ	83 Outperform	$186.11B	10.25	18.26%	6.16%	2.05%	61.39%
CMCSA	78 Outperform	$123.32B	5.53	25.44%	3.87%	2.54%	60.53%
T	77 Outperform	$210.86B	16.65	12.12%	3.75%	1.46%	0.88%
TMUS	73 Outperform	$271.66B	22.76	19.74%	1.46%	6.27%	31.78%
AMX	68 Neutral	$61.68B	20.89	14.41%	2.57%	-0.64%	56.92%
SFTBY	64 Neutral	$177.64B	13.99	15.53%	0.16%	6.31%	3932.00%
Sector *	60 Neutral	$47.27B	4.55	-11.27%	4.14%	1.88%	-40.90%