Soliton Systems KK (3040) AI Stock Analysis

• Market Cap: $26.99B
• Dividend Yield: 4.39%
• Average Volume (3M): 28.44K
• Price to Earnings (P/E): 15.7
• Beta (1Y): 0.68
• Revenue Growth: -0.14%
• EPS Growth: -4.22%
• Country: JP
• Employees: 678
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 9.50
• Shares Outstanding: 19,738,888
• 10 Day Avg. Volume: 31,270
• 30 Day Avg. Volume: 28,440
• 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: 0.34
• Enterprise Value/Revenue: 0.49
• Enterprise Value/Gross Profit: 1.09
• Enterprise Value/Ebitda: 3.61
• 1Y Price Target: $1,539.72
• Price Target Upside: 5.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 77 Outperform
• Price Target: ¥1,536.00 ▲(5.35% Upside)

Soliton Systems KK is well-positioned with strong financial health, characterized by consistent revenue and profit margins, a robust equity foundation, and healthy cash flow generation. The stock's valuation is attractive with a reasonable P/E ratio and high dividend yield. Technical indicators suggest a positive trend, although operational efficiency challenges are noted in recent margins.

Soliton Systems KK Business Overview & Revenue Model

Company Description

Soliton Systems K.K., a technology company, provides IT security, remote live broadcasting, and embedded solutions in Japan and internationally. The company offers IT security products that include mailzen, soliton secure desktop, NetAttest D3, NetAttest LAP, and cyber space analytics.. It also provides mobile video transmission products comprising smart-telecaster ZAO, smart-telecaster Zao-S, smart-telecaster Zao-SH, ZAO App, HD view decoder/receiver, cloud view, cloud view switcher, and VMS Plus. In addition, the company offers advanced teleoperation products and data analytics. Soliton Systems K.K. was founded in 1979 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Soliton Systems KK generates revenue through the sale of its advanced IT security products, video transmission technologies, and mobile broadcasting services. Its key revenue streams include licensing fees for its proprietary software solutions, sales of hardware products that enable secure data and video communications, and subscription-based services for ongoing product support and updates. The company also benefits from strategic partnerships and collaborations that enhance its market reach and product offerings, contributing to its overall earnings.

Soliton Systems KK Financial Statement Overview

Summary

Soliton Systems KK demonstrates strong financial health with consistent revenue and profit margins, a robust equity foundation, and healthy cash flow generation. While there are signs of operational efficiency challenges, notably in recent EBIT and EBITDA margins, the company remains well-positioned with low leverage and effective capital management.

Income Statement

Soliton Systems KK has shown consistent revenue growth over the years, although there was a slight dip in 2024. The gross profit margin has remained robust, indicating effective cost management, while the net profit margin has been strong, showcasing profitability. However, the recent decline in both EBIT and EBITDA margins suggests potential challenges in operational efficiency.

Balance Sheet

The company maintains a healthy equity position with a strong equity ratio and low debt levels, as evidenced by a favorable debt-to-equity ratio. Return on Equity (ROE) is impressive, indicating effective use of equity capital to generate profits. Overall, the balance sheet reflects financial stability and low leverage risk.

Cash Flow

Operating cash flow has shown resilience, although there has been a decrease in 2024. The company has maintained positive free cash flow, which is a strong indicator of liquidity. However, the decline in free cash flow growth rate indicates potential challenges in generating cash surplus compared to previous years.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	18.62B	18.61B	19.06B	19.76B	17.39B	16.46B
Gross Profit	8.35B	8.29B	8.56B	7.63B	7.82B	7.55B
EBITDA	2.52B	2.52B	3.12B	2.77B	2.98B	1.90B
Net Income	1.73B	1.73B	1.94B	1.59B	1.87B	1.48B
Balance Sheet
Total Assets	22.88B	23.29B	22.62B	19.26B	17.30B	16.01B
Cash, Cash Equivalents and Short-Term Investments	14.71B	14.69B	13.39B	10.22B	8.50B	7.30B
Total Debt	181.00M	191.00M	133.00M	157.00M	157.00M	292.00M
Total Liabilities	10.92B	11.00B	11.49B	9.65B	8.83B	8.98B
Stockholders Equity	11.95B	12.27B	11.12B	9.60B	8.46B	7.01B
Cash Flow
Free Cash Flow	0.00	1.84B	3.14B	2.00B	1.75B	1.53B
Operating Cash Flow	0.00	2.04B	3.64B	2.30B	2.08B	2.62B
Investing Cash Flow	0.00	-237.00M	-57.00M	-305.00M	-464.00M	-1.12B
Financing Cash Flow	0.00	-507.00M	-397.00M	-252.00M	-481.00M	-1.10B

Soliton Systems KK Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1458.00
• 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 JP:3040, the sentiment is Positive. The current price of 1458 is above the 20-day moving average (MA) of 1413.95, above the 50-day MA of 1388.92, and above the 200-day MA of 1243.69, indicating a bullish trend. The MACD of 23.88 indicates Negative momentum. The RSI at 61.68 is Neutral, neither overbought nor oversold. The STOCH value of 90.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3040.

Soliton Systems KK Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3040	77 Outperform	$26.99B	15.74	14.71%	4.39%	-0.14%	-4.22%
3992	75 Outperform	¥24.24B	29.33	19.19%	2.00%	2.06%	-16.53%
4493	73 Outperform	¥17.70B	32.52	33.70%	0.17%	28.56%	-13.56%
4847	73 Outperform	¥28.92B	21.34	14.25%	3.18%	7.42%	-4.90%
3741	68 Neutral	¥24.87B	9.51	14.40%	2.10%	17.22%	10.53%
3695	61 Neutral	¥9.81B	56.48	8.72%	5.15%	14.59%	-71.29%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Soliton Systems KK Corporate Events

Soliton Systems KK Reports Mixed Financial Results for First Half of 2025

Soliton Systems KK reported its consolidated financial results for the first half of 2025, showing a slight increase in net sales by 2% compared to the previous year, reaching ¥8,710 million. Despite the increase in operating profit by 22.5%, ordinary profit decreased by 6.2%, and profit attributable to owners of the parent fell by 1.5%. The company maintained a stable equity-to-asset ratio and announced a dividend payment schedule, reflecting its ongoing commitment to shareholder returns. The exclusion of Soliton Network Systems (Shanghai) Co., Ltd. from consolidation and changes in accounting policies were noted, indicating strategic adjustments in its operations.

Soliton Systems’ Parent Company Reports Strong Financial Results

Soliton Systems KK announced the financial results of its parent company, Yugen Kaisha Zen-Noboks, for the fiscal year ending March 31, 2025. The parent company reported a net profit of 374,423 thousand yen, indicating a strong financial performance despite an operating loss, which could positively impact Soliton Systems’ strategic positioning and stakeholder confidence.

Soliton Systems Completes Treasury Share Disposal for Employee Compensation

Soliton Systems KK has completed the payment procedures for the disposal of 4,500 treasury shares as restricted stock compensation, a decision made by its Board of Directors on May 22, 2025. This move, involving a total disposal amount of 5,760,000 yen, is part of the company’s strategy to incentivize its employees, potentially enhancing their commitment and aligning their interests with the company’s performance.

Soliton Systems Introduces Stock Compensation Plan to Boost Employee Retention

Soliton Systems K.K. has announced a plan to dispose of 4,500 treasury shares as restricted stock compensation to incentivize employees and enhance corporate value. This initiative, aimed at strengthening employee retention, involves granting shares over a three-year period with specific conditions attached, reflecting the company’s strategic focus on sustainable growth and employee engagement.