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SHIFT
(3697)
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Rating:69Neutral
Price Target:
¥994.00
▲(7.03% Upside)
Action:Downgraded
Date:10/16/26
The score is primarily supported by solid financial performance (strong multi-year growth, improved operating margin, and positive free cash flow) and constructive technical trend/momentum. It is tempered by rising leverage and net-margin softness, plus a relatively high P/E and low dividend yield.
Positive Factors
Strong multi-year revenue expansion
The substantial increase in revenue over several years indicates that SHIFT has expanded its customer and service base within software quality assurance. This scale supports continued investment in delivery capabilities and creates a durable platform for future growth, even as the recent pace moderates.
Negative Factors
Recent revenue growth slowdown
The sharp deceleration in revenue growth indicates that SHIFT’s expansion is becoming less rapid than in earlier years. Slower top-line momentum could limit operating leverage, reduce the pace of market-share gains, and make future profitability increasingly dependent on execution and efficiency.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong multi-year revenue expansion
The substantial increase in revenue over several years indicates that SHIFT has expanded its customer and service base within software quality assurance. This scale supports continued investment in delivery capabilities and creates a durable platform for future growth, even as the recent pace moderates.
Read all positive factors
SHIFT (3697) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥309.00B
Dividend Yield0.39%
Average Volume (3M)5.02M
Price to Earnings (P/E)40.4
Beta (1Y)0.54
Revenue Growth24.48%
EPS Growth-15.74%
CountryJP
Employees11,688
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)28.59
Shares Outstanding267,500,670
10 Day Avg. Volume8,639,630
30 Day Avg. Volume5,018,706
Financial Highlights & Ratios
PEG Ratio-2.17
Price to Book (P/B)5.88
Price to Sales (P/S)1.53
P/FCF Ratio19.59
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥800.00Price Target Upside-13.86% Downside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)55.2
Revenue Forecast (FY)¥192.90B
SHIFT Business Overview & Revenue Model
Company Description
SHIFT Inc. provides software quality assurance and testing solutions in Japan. The company offers CAT, a software test management tool to evaluate software testing aptitude; a quality platform; and software consulting services. The company also en...
How the Company Makes Money
SHIFT primarily makes money by providing fee-based services to corporate customers for software testing and quality assurance. Revenue is generated through contracts where SHIFT supplies testing execution (e.g., test design, test case creation, ma...
SHIFT Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
60
Neutral
Cash Flow
72
Positive
| Breakdown | Aug 2026 | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 161.60B | 129.82B | 110.63B | 88.03B | 64.87B |
| Gross Profit | 54.20B | 45.02B | 35.36B | 29.94B | 20.21B |
| EBITDA | 21.68B | 17.03B | 11.97B | 11.89B | 8.93B |
| Net Income | 7.43B | 8.94B | 5.13B | 6.25B | 4.97B |
Balance Sheet | |||||
| Total Assets | 109.69B | 77.66B | 63.30B | 49.89B | 40.52B |
| Cash, Cash Equivalents and Short-Term Investments | 31.10B | 23.73B | 20.87B | 17.59B | 12.92B |
| Total Debt | 34.71B | 12.22B | 9.58B | 4.91B | 3.57B |
| Total Liabilities | 67.48B | 36.62B | 28.77B | 20.31B | 14.51B |
| Stockholders Equity | 42.05B | 41.04B | 34.04B | 29.13B | 25.65B |
Cash Flow | |||||
| Free Cash Flow | 12.63B | 14.33B | 3.44B | 9.10B | 6.74B |
| Operating Cash Flow | 13.72B | 15.65B | 9.09B | 10.25B | 7.39B |
| Investing Cash Flow | -22.38B | -11.70B | -9.95B | -4.78B | -5.61B |
| Financing Cash Flow | 15.97B | -1.19B | 4.15B | -817.00M | -3.08B |
SHIFT Technical Analysis
Positive
928.70
Price Trends
920.05
Positive
821.16
Positive
767.44
Positive
Market Momentum
64.48
Negative
73.28
Negative
76.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3697, the sentiment is Positive. The current price of 928.7 is below the 20-day moving average (MA) of 948.78, above the 50-day MA of 920.05, and above the 200-day MA of 767.44, indicating a bullish trend. The MACD of 64.48 indicates Negative momentum. The RSI at 73.28 is Negative, neither overbought nor oversold. The STOCH value of 76.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3697.
SHIFT Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | ¥44.22B | 11.71 | 8.44% | 4.60% | 5.27% | 11.84% | |
81 Outperform | ¥98.56B | 24.78 | ― | 2.15% | 12.63% | -0.98% | |
78 Outperform | ¥226.22B | 18.59 | ― | 2.95% | 9.69% | 13.01% | |
76 Outperform | ¥46.78B | 19.33 | ― | 2.60% | 9.28% | -6.81% | |
71 Outperform | ¥18.31B | 9.91 | ― | 3.36% | 12.33% | 13.11% | |
69 Neutral | ¥309.00B | 40.43 | 18.35% | 0.39% | 24.48% | -15.74% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
JP:3697
SHIFT
1,156.00
20.84
1.84%
JP:4719
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3,150.00
-537.12
-14.57%
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AGS Corporation
1,071.00
-383.25
-26.35%
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Plus Alpha Consulting Co. LTD.
2,324.00
-57.43
-2.41%
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Japan System Techniques Co., Ltd.
1,887.00
-373.07
-16.51%
JP:9759
NSD Co., Ltd.
3,255.00
3.41
0.10%
SHIFT Corporate Events
SHIFT to Transfer Nadia and xbs to Hit in Portfolio Optimization Move
Oct 15, 2026
SHIFT Inc. has decided to transfer all equity interests in its second-tier subsidiaries Nadia Inc. and xbs Inc. to Hit Co., Ltd., a company specializing in outdoor advertising media and digital signage. The two design-focused subsidiaries have hel...
SHIFT’s Revenue Surges but Extraordinary Losses Hit Earnings
Oct 15, 2026
SHIFT Inc. reported a strong expansion in its non-consolidated business for the fiscal year ended August 31, 2026, with net sales rising 20.9% year on year to 100,532 million yen, supported by a solid business environment and enhanced sales activi...
SHIFT and Tokyo Gas Launch JPY 15 Billion Fund to Drive AI and DX-Focused M&A
Oct 15, 2026
SHIFT’s investment subsidiary SHIFT Growth Capital Inc. will establish an investment limited partnership that will receive a joint commitment of JPY 15 billion from SHIFT and Tokyo Gas. The fund is designed to support SHIFT’s strategy ...
SHIFT Evaluates Board Effectiveness, Plans Governance Enhancements
Oct 15, 2026
SHIFT Inc. reported that its newly introduced Board of Directors effectiveness evaluation, conducted in FY08/26 under the Tokyo Stock Exchange Corporate Governance Code, found the board generally meets or fully meets expected standards. The evalua...
SHIFT Renames Investment Segment to Clarify Business Focus
Oct 15, 2026
SHIFT Inc. has updated the name of one of its reportable segments, changing the label from “Fund” to “Investment Platform” effective from the fourth quarter of its FY08/26. The renamed segment reflects investment activities...
SHIFT Raises Year-End Dividend as It Balances Growth Investment with Shareholder Returns
Oct 15, 2026
SHIFT Inc., a technology and software services firm listed on the TSE Prime Market, has traditionally focused on reinvesting in long-term growth while gradually broadening its financing tools, such as MA funded with external capital. This shift in...
SHIFT Balances Rapid Sales Growth With Investment-Driven Profit Pressure
Oct 15, 2026
SHIFT, Inc. is a Japan-based provider of software testing and quality assurance services listed on the Tokyo Stock Exchange. The company focuses on helping enterprise clients improve system reliability and operational efficiency, and has been expa...
SHIFT to Absorb Localization Subsidiary DICO to Strengthen AI-Driven LQA Services
Aug 25, 2026
SHIFT Inc. will conduct an absorption-type merger of its wholly owned subsidiary DICO Co., Ltd., which develops localization and game-related businesses, with SHIFT as the surviving entity and DICO to be dissolved. The move follows DICO’s in...
SHIFT Forms Special Subsidiary to Advance Inclusive Employment and Human-Centered Value Creation
Aug 25, 2026
SHIFT Inc. has resolved to establish SHIFT HAP Inc., a wholly owned special subsidiary aimed at advancing its human capital management strategy and employment of people with disabilities. The new entity will seek certification under Japan’s ...
SHIFT Revamps Segment Reporting to Reflect AI-Focused Growth Strategy
Aug 25, 2026
SHIFT Inc. is restructuring its reportable segments starting from the fourth quarter of fiscal 2026 to better align financial reporting with its evolving service mix and management practices. The company is shifting from a structure centered on in...
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.