Soliton Systems KK (3040) AI Stock Analysis

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Soliton Systems KK

(TSE/TYO:3040)

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Rating:71Outperform

Price Target:JPY 2,880.00▲(10.51% Upside)

Action:reiterated

Date:11/13/26

The score is primarily supported by strong financial fundamentals (improving margins and a very low-debt balance sheet with solid ROE). This is partially offset by weak technical momentum (price below key moving averages with negative MACD and subdued RSI/Stoch). Valuation is moderate with a modest dividend yield, providing some support but not enough to fully counter the current technical weakness.

Positive Factors

Improving ProfitabilityExpanding gross and net margins indicate stronger profitability and potentially better operating leverage in the software business. If maintained, the improvement can support reinvestment, strengthen earnings quality, and provide greater resilience across the next several quarters.

Negative Factors

Uneven Revenue GrowthThe recent revenue pattern is choppy rather than consistently expanding, which makes future growth and operating planning less predictable. Even with improved margins, uneven demand can limit the pace of scale benefits and create greater variability in the company’s earnings trajectory.

Soliton Systems KK (3040) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 54.84B
Dividend Yield: 2.23%
Average Volume (3M): 281.52K
Price to Earnings (P/E): 15.3
Beta (1Y): 1.10
Revenue Growth: 13.07%
EPS Growth: 28.70%
Country: Japan
Employees: 655
Sector: Technology
Sector Strength: 61
Industry: Software - Infrastructure

Soliton Systems KK Business Overview & Revenue Model

Company Description

Operating both within Japan and on an international scale, Soliton Systems K.K. is a technology firm specializing in IT security, remote live broadcasting, and embedded system solutions. Its comprehensive portfolio of cybersecurity offerings includes...

Soliton Systems KK Financial Statement Overview

Summary

Strong financial quality overall: profitability is improving (gross margin ~39% in 2022 to ~47% in 2025; net margin ~11.6% in 2025) and the balance sheet is exceptionally conservative with very low leverage (debt-to-equity ~0.7% in 2025) and rising equity. The main offset is uneven revenue and cash-flow consistency (revenue declines in 2023–2024 before +5.3% in 2025; FCF volatility year-to-year).

Income Statement

78Positive

Balance Sheet

92Very Positive

Cash Flow

76Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	21.07B	19.76B	18.61B	19.06B	19.76B	17.39B
Gross Profit	10.39B	9.24B	8.29B	8.56B	7.63B	7.82B
EBITDA	4.47B	3.26B	2.52B	3.12B	2.77B	2.98B
Net Income	3.17B	2.30B	1.72B	1.94B	1.59B	1.87B
Balance Sheet
Total Assets	26.91B	26.23B	23.29B	22.63B	19.26B	17.32B
Cash, Cash Equivalents and Short-Term Investments	18.14B	16.86B	14.69B	13.39B	10.20B	8.45B
Total Debt	80.00M	97.00M	191.00M	133.00M	157.00M	157.00M
Total Liabilities	12.71B	12.97B	11.00B	11.49B	9.65B	8.84B
Stockholders Equity	14.19B	13.25B	12.27B	11.12B	9.60B	8.46B
Cash Flow
Free Cash Flow	0	3.43B	1.84B	3.55B	2.20B	2.03B
Operating Cash Flow	0	3.60B	2.04B	3.64B	2.30B	2.11B
Investing Cash Flow	0	-10.17B	-237.00M	-57.00M	-309.00M	-495.00M
Financing Cash Flow	0	-1.27B	-507.00M	-397.00M	-252.00M	-481.00M

Soliton Systems KK Technical Analysis

Technical Analysis SentimentNegative

Last Price2606.00

Price Trends

50DMA2785.62Negative

100DMA2431.13Positive

200DMA2166.19Positive

Market Momentum

MACD-28.65Positive

RSI38.84Neutral

STOCH48.29Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3040, the sentiment is Negative. The current price of 2606.00 is below the 20-day moving average (MA) of 3104.20, below the 50-day MA of 2785.62, and above the 200-day MA of 2166.19, indicating a neutral trend. The MACD of -28.65 indicates Positive momentum. The RSI at 38.84 is Neutral, neither overbought nor oversold. The STOCH value of 48.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3040.

Soliton Systems KK Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:3040 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4475	83Outperform	JPY 86.86B	41.89	―	0.46%	17.01%	34.74%
JP:4493	79Outperform	JPY 26.87B	23.33	―	0.19%	22.65%	74.18%
JP:3694	78Outperform	JPY 24.31B	20.98	―	―	21.05%	-2.47%
JP:4417	72Outperform	JPY 129.83B	58.50	―	0.51%	25.18%	85.59%
JP:3040	71Outperform	JPY 54.84B	15.25	23.79%	2.23%	13.07%	28.70%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
JP:147A	59Neutral	JPY 43.16B	63.45	―	―	42.03%	84.36%

* Technology Sector Average

Performance Comparison

JP:3040 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:3040	Soliton Systems KK	2606.00	812.24	45.28%
JP:147A	SORACOM,INC.	965.00	-86.00	-8.18%
JP:3694	OPTiM Corp.	443.00	-112.00	-20.18%
JP:4417	Global Security Experts Inc.	8470.00	4972.97	142.21%
JP:4475	HENNGE K.K.	2391.00	1092.35	84.11%
JP:4493	Cyber Security Cloud, Inc.	2185.00	370.02	20.39%

Soliton Systems KK Corporate Events

Soliton Systems Reports Nine-Month Sales and Profit Growth

Nov 12, 2026

For the nine months ended September 30, 2026, Soliton Systems K.K. reported net sales of ¥15,926 million, up 14.5% year over year, while operating profit increased 56.9% to ¥2,925 million. Ordinary profit rose 59.1% to ¥3,043 million, and profit attr...

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.

Date of analysis: Nov 13, 2026

Soliton Systems KK AI Stock Analysis