Softfront Holdings (2321) AI Stock Analysis

• Market Cap: ¥10.29B
• Dividend Yield: N/A
• Average Volume (3M): 4.03M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.87
• Revenue Growth: -1.68%
• EPS Growth: 85.30%
• Country: JP
• Employees: 52
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.31
• Shares Outstanding: 51,970,898
• 10 Day Avg. Volume: 1,289,600
• 30 Day Avg. Volume: 4,032,320
• 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: 47 Neutral
• Price Target: ―

Softfront Holdings exhibits challenges with profitability and cash flow, overshadowing its revenue growth and stable balance sheet. The technical analysis suggests bearish momentum, and the valuation metrics are unattractive due to negative earnings. Improved operational efficiency and cost management are crucial for future performance.

Softfront Holdings Business Overview & Revenue Model

Company Description

Softfront Holdings provides communication software and services in Japan. It is involved in the development and sale of products and services related to real-time communication using voice, video, messaging, and related commissioned development, as well as brokerage sale of IT solutions. The company offers commubo, a natural conversation AI platform that uses voice robots instead of humans; telmee, a cloud-based telephone business automation service; and SITE PUBLIS, a content management system for website management. In addition, it engages in the planning, development, and sale of web-based products and services; website construction; and the provision of utilization support services. The company was formerly known as Softfront Co., Ltd. and changed its name to Softfront Holdings in August 2016. Softfront Holdings was incorporated in 1997 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Softfront Holdings generates revenue through the sale and licensing of its communication software solutions. Key revenue streams include the licensing of VoIP software and platforms to telecommunications companies and enterprises looking to integrate advanced communication solutions into their operations. The company also earns money from providing ongoing support and maintenance services for its software products. Significant partnerships with telecom operators and technology companies enhance its market reach and contribute to its earnings by enabling joint development and distribution of communication technologies.

Softfront Holdings Financial Statement Overview

Summary

Softfront Holdings shows revenue growth and a stable balance sheet, but faces significant profitability and cash flow challenges. Improving operational efficiencies and cost management are crucial to enhance financial stability and shareholder value.

Income Statement

The income statement shows a mixed performance for Softfront Holdings. The gross profit margin remains positive, indicating some ability to cover costs of goods sold, but persistent negative net income and EBIT margins highlight ongoing challenges with profitability. Revenue has shown growth over the years, but negative EBIT and EBITDA margins in TTM signal operational inefficiencies. The company must address these cost concerns to improve its financial health.

Balance Sheet

Softfront Holdings displays a relatively stable balance sheet with a low debt-to-equity ratio and positive equity ratio, indicating a cautious approach to leveraging. However, a decrease in stockholders' equity over recent periods suggests possible erosion of value. The company's ability to maintain cash reserves provides some buffer, but improving profitability is crucial for maintaining equity strength.

Cash Flow

The cash flow analysis reveals some concerns, with free cash flow fluctuating significantly and turning negative in some periods. The operating cash flow to net income ratio is unavailable in TTM, suggesting issues with cash generation relative to accounting profits. Despite previous periods showing some improvement, consistent positive cash flow generation is essential for future stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	823.31M	823.60M	889.51M	763.83M	377.80M	310.10M
Gross Profit	407.16M	408.24M	285.62M	364.70M	205.85M	198.31M
EBITDA	-27.01M	-27.01M	-32.17M	35.80M	7.23M	58.67M
Net Income	-81.95M	-81.17M	-317.02M	-59.41M	-29.06M	54.30M
Balance Sheet
Total Assets	1.71B	1.71B	515.45M	772.92M	819.70M	418.14M
Cash, Cash Equivalents and Short-Term Investments	1.42B	1.42B	206.03M	157.00M	292.52M	217.17M
Total Debt	0.00	0.00	9.98M	20.38M	32.49M	0.00
Total Liabilities	417.83M	417.83M	343.75M	277.50M	264.11M	212.96M
Stockholders Equity	1.23B	1.23B	132.35M	424.97M	484.16M	205.18M
Cash Flow
Free Cash Flow	0.00	60.68M	33.37M	-123.80M	-44.30M	2.54M
Operating Cash Flow	0.00	60.68M	64.94M	-44.86M	9.16M	47.24M
Investing Cash Flow	0.00	-14.41M	-29.91M	-78.46M	39.82M	-24.35M
Financing Cash Flow	0.00	1.17B	14.00M	-12.19M	26.36M	12.60M

Softfront Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 198.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2321, the sentiment is Positive. The current price of 198 is above the 20-day moving average (MA) of 196.05, above the 50-day MA of 169.24, and above the 200-day MA of 122.88, indicating a bullish trend. The MACD of 6.23 indicates Positive momentum. The RSI at 53.37 is Neutral, neither overbought nor oversold. The STOCH value of 30.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2321.

Softfront Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3963	81 Outperform	17.67B	29.08	0.00%	2.45%	3.09%	-28.59%
4686	73 Outperform	313.09B	23.98	0.00%	0.41%	11.66%	9.96%
3844	73 Outperform	53.30B	16.51	17.11%	2.90%	4.89%	4.85%
3778	56 Neutral	142.92B	55.61	9.77%	0.11%	45.51%	292.77%
2321	47 Neutral	¥10.29B	―		―	-1.68%	85.30%
4813	41 Neutral	24.09B	-3.02	-53.56%	―	0.37%	-414.70%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%