Encourage Technologies Co., Ltd. (3682) AI Stock Analysis

• Market Cap: ¥4.06B
• Dividend Yield: 3.28%
• Average Volume (3M): 5.37K
• Price to Earnings (P/E): 18.5
• Beta (1Y): 0.41
• Revenue Growth: 2.04%
• EPS Growth: -3.43%
• Country: JP
• Employees: 138
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 2.62
• Shares Outstanding: 6,924,200
• 10 Day Avg. Volume: 4,160
• 30 Day Avg. Volume: 5,370
• 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: 63 Neutral
• Price Target: ―

Encourage Technologies Co., Ltd. shows strong financial performance with robust revenue growth and a solid, debt-free balance sheet. However, the stock's technical indicators suggest a bearish trend, and the lack of momentum metrics adds uncertainty. The valuation is reasonable with a good dividend yield, but overall market sentiment needs monitoring due to current price trends.

Encourage Technologies Co., Ltd. Business Overview & Revenue Model

Company Description

Encourage Technologies Co., Ltd. (3682) is a Japanese company that specializes in providing IT solutions and software development services. The company's core products and services include enterprise resource planning (ERP) software, IT management solutions, and various software development services tailored to meet the specific needs of businesses across different sectors. Encourage Technologies focuses on enhancing business productivity and efficiency through innovative technology solutions.

How the Company Makes Money

Encourage Technologies Co., Ltd. generates revenue primarily through the sale and licensing of its software products and IT solutions. The company offers its ERP software and IT management solutions to a wide range of industries, thus ensuring a steady stream of licensing fees and subscription-based revenues. Additionally, Encourage Technologies provides custom software development services, which contribute to its earnings through project-based contracts with clients. The company may also benefit from strategic partnerships and collaborations with other technology firms and business entities, which can enhance its market reach and customer base.

Encourage Technologies Co., Ltd. Financial Statement Overview

Summary

Encourage Technologies Co., Ltd. demonstrates strong financial health with robust revenue growth, excellent profitability margins, and a debt-free balance sheet. While cash flow performance is improving significantly, historical volatility suggests a need for strategic management. The company is well-positioned in the Information Technology Services industry, supported by solid financial metrics and growth potential.

Income Statement

The income statement shows strong performance with a Gross Profit Margin of 50.54% and a significant improvement in Net Profit Margin at 8.76% in the latest period. Revenue growth is robust at 17.8% from the previous year, indicating a healthy demand for services. The EBIT Margin of 12.76% and EBITDA Margin of 27.72% point to effective cost control and operational efficiency. Overall, profitability metrics demonstrate a positive trajectory.

Balance Sheet

The balance sheet is solid with a Debt-to-Equity Ratio of 0, reflecting no leverage and a strong equity position. Return on Equity (ROE) stands at 6.39%, showing a stable return for shareholders. The Equity Ratio is high at 70.19%, indicating financial stability and low risk. Overall, the company maintains a strong and stable financial position with ample liquidity and no debt burden.

Cash Flow

Cash flow analysis reveals impressive Free Cash Flow growth, recovering from negative to positive territory, reflecting improved cash management. The Operating Cash Flow to Net Income Ratio of 3.94 indicates strong cash generation relative to net income, supporting operational activities. However, prior volatility in cash flow metrics suggests potential risks in cash management strategies. Overall, cash flow performance is strengthening but requires careful monitoring.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.35B	2.50B	2.50B	2.12B	2.07B	1.80B
Gross Profit	1.31B	1.29B	1.26B	1.40B	1.30B	1.18B
EBITDA	513.61M	587.04M	692.53M	350.04M	432.48M	255.38M
Net Income	221.15M	220.24M	218.86M	174.76M	248.59M	138.67M
Balance Sheet
Total Assets	4.66B	4.66B	4.88B	4.21B	4.44B	3.90B
Cash, Cash Equivalents and Short-Term Investments	3.76B	3.71B	3.76B	3.39B	3.74B	3.28B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	1.32B	1.15B	1.46B	866.14M	1.15B	729.67M
Stockholders Equity	3.34B	3.51B	3.43B	3.34B	3.29B	3.17B
Cash Flow
Free Cash Flow	506.20M	312.97M	503.05M	-216.51M	567.06M	348.06M
Operating Cash Flow	506.20M	345.94M	862.64M	3.88M	741.15M	436.93M
Investing Cash Flow	0.00	-261.88M	-364.19M	-226.66M	-164.49M	59.37M
Financing Cash Flow	0.00	-134.29M	-134.29M	-120.86M	-120.86M	-235.52M

Encourage Technologies Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 609.00
• 50DMA: Negative
• 100DMA: Negative
• 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:3682, the sentiment is Negative. The current price of 609 is below the 20-day moving average (MA) of 610.45, below the 50-day MA of 609.08, and above the 200-day MA of 593.90, indicating a neutral trend. The MACD of -0.16 indicates Positive momentum. The RSI at 48.53 is Neutral, neither overbought nor oversold. The STOCH value of 43.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3682.

Encourage Technologies Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9629	78 Outperform	37.68B	24.33	9.08%	4.36%	5.29%	-9.32%
4776	72 Outperform	157.82B	30.08	0.00%	0.87%	22.97%	107.52%
9719	70 Neutral	1.42T	30.87	16.96%	1.56%	33.00%	21.00%
4684	69 Neutral	2.61T	35.03	0.00%	0.71%	10.25%	12.61%
3682	63 Neutral	¥4.06B	18.48		3.28%	2.04%	-3.43%
4316	58 Neutral	4.80B	-24.67	-36.81%	―	3.40%	-409.49%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%