FRONTEO, Inc. (2158) AI Stock Analysis

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FRONTEO, Inc.

(2158)

Rating:65Neutral

Price Target:

¥651.00

▲(7.43%Upside)

FRONTEO, Inc.'s stock score is primarily influenced by its mixed financial performance, characterized by operational recovery but inconsistent cash flow and profit margins. The technical analysis indicates slight positive momentum, while the high P/E ratio suggests overvaluation, impacting the overall score.

FRONTEO, Inc. (2158) vs. iShares MSCI Japan ETF (EWJ)

Market Cap

¥23.85B

Dividend YieldN/A

Average Volume (3M)170.14K

Price to Earnings (P/E)43.0

Beta (1Y)1.51

Revenue Growth-17.30%

EPS GrowthN/A

CountryJP

Employees225

SectorTechnology

Sector Strength83

IndustryInformation Technology Services

Share Statistics

EPS (TTM)6.87

Shares Outstanding39,356,860

10 Day Avg. Volume218,270

30 Day Avg. Volume170,143

Financial Highlights & Ratios

PEG Ratio-1.20

Price to Book (P/B)7.74

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

FRONTEO, Inc. Business Overview & Revenue Model

Company DescriptionFRONTEO, Inc. (2158) is a technology company specializing in data analysis and artificial intelligence solutions, primarily serving the legal, healthcare, and business sectors. The company offers a range of services that include eDiscovery, digital forensics, and data analytics, leveraging its proprietary AI technology to assist clients in managing large volumes of data effectively and making informed decisions.

How the Company Makes MoneyFRONTEO, Inc. generates revenue through its suite of AI-driven services and solutions tailored to various industries. The company's primary revenue streams include fees from its eDiscovery and digital forensics services, where they assist legal firms and corporate clients in managing and analyzing data for litigation and investigation purposes. Additionally, FRONTEO earns income through its healthcare analytics solutions, offering data-driven insights to improve patient outcomes and operational efficiency in medical institutions. The company often engages in partnerships and collaborations with other technology firms and industry players to enhance its service offerings and expand its market reach, further contributing to its revenue.

FRONTEO, Inc. Financial Statement Overview

Summary

FRONTEO, Inc. faces considerable financial challenges, with declining revenue, negative profitability margins, and cash flow issues. Despite some stability in debt management, the overall financial health shows a downward trajectory. The company needs strategic interventions to enhance revenue growth and improve cash flow management to stabilize its financial position.

Income Statement

Negative

FRONTEO, Inc. has shown a significant decline in revenue from previous years, with the TTM data showing a revenue of ¥6.93 billion compared to ¥10.93 billion in 2022. The net profit margin is negative in the TTM period, indicating losses, and EBIT and EBITDA margins are concerning as well. There is also a significant revenue decline from 2022 to 2023 and continued losses in net income.

Balance Sheet

Neutral

The balance sheet shows a relatively stable financial position with a debt-to-equity ratio of approximately 0.67 in the TTM period, which is manageable. However, the equity ratio has decreased over the years, indicating increased leverage. The company's total liabilities have reduced, providing some stability, but declining equity and assets remain a concern.

Cash Flow

Negative

FRONTEO, Inc. reports zero free cash flow in the TTM period, suggesting cash flow challenges. The operating cash flow to net income ratio is non-calculable due to negative net income and zero operating cash flow. Previous periods show fluctuating cash flows, with significant deterioration from positive cash flow in 2022 to negative in 2023.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
6.93B	7.38B	7.22B	10.93B	10.37B	10.47B
	Gross Profit
4.00B	3.48B	3.26B	5.57B	4.78B	4.04B
	EBIT
944.21M	-185.00M	-1.36B	1.72B	507.22M	-844.44M
	EBITDA
-845.04M	-1.93B	-723.23M	2.69B	1.40B	-102.85M
	Net Income Common Stockholders
-1.90B	-2.84B	-1.70B	1.31B	359.10M	-929.66M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.04B	3.04B	1.48B	3.46B	3.00B	1.57B
	Total Assets
7.63B	7.52B	9.15B	11.83B	11.94B	10.46B
	Total Debt
2.93B	2.93B	3.09B	3.75B	5.63B	5.36B
	Net Debt
-113.19M	-117.38M	1.61B	284.20M	2.62B	3.79B
	Total Liabilities
4.79B	4.68B	4.10B	5.38B	7.30B	7.15B
	Stockholders Equity
2.84B	2.84B	5.05B	6.44B	4.64B	3.24B
Cash Flow		Free Cash Flow
0.00	1.23B	-1.54B	1.72B	1.45B	-1.03B
	Operating Cash Flow
0.00	1.71B	-914.62M	2.38B	2.03B	-229.20M
	Investing Cash Flow
0.00	-181.86M	-625.06M	-618.21M	-347.73M	-784.97M
	Financing Cash Flow
0.00	-32.15M	-606.32M	-1.46B	-53.02M	-1.55B

FRONTEO, Inc. Technical Analysis

Technical Analysis Sentiment

Negative

Last Price606.00

Price Trends

50DMA

579.66

Positive

100DMA

597.96

Positive

200DMA

627.52

Negative

Market Momentum

MACD

8.63

Positive

RSI

50.20

Neutral

STOCH

25.08

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2158, the sentiment is Negative. The current price of 606 is below the 20-day moving average (MA) of 613.65, above the 50-day MA of 579.66, and below the 200-day MA of 627.52, indicating a neutral trend. The MACD of 8.63 indicates Positive momentum. The RSI at 50.20 is Neutral, neither overbought nor oversold. The STOCH value of 25.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:2158.

FRONTEO, Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2359	81 Outperform	¥26.59B	11.95		2.95%	2.50%	-1.48%
3393	81 Outperform	¥27.31B	13.36		4.14%	13.49%	24.76%
2349	77 Outperform	¥26.27B	10.92		1.18%	11.94%	14.10%
4396	76 Outperform	¥25.71B	16.72		1.91%	20.75%	31.02%
3788	69 Neutral	¥23.15B	32.02		1.85%	7.60%	-6.99%
2158	65 Neutral	¥23.85B	42.97		―	-17.30%	―
Sector *	62 Neutral	$11.80B	10.37	-7.29%	2.91%	7.39%	-7.96%

* Technology Sector Average

Performance Comparison

JP:2158

FRONTEO, Inc.

606.00

-20.00

-3.19%

JP:2349

Nippon Information Development Co., Ltd.

2,365.00

57.93

2.51%

JP:2359

Core Corporation

1,866.00

28.50

1.55%

JP:3393

Startia Holdings,Inc.

2,755.00

794.45

40.52%

JP:3788

GMO GlobalSign Holdings K.K.

2,010.00

-924.40

-31.50%

JP:4396

System Support, Inc.

2,466.00

648.86

35.71%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.