Datasection, Inc. (3905) AI Stock Analysis

1 Followers

Datasection, Inc.

(TSE/TYO:3905)

Select Model

Rating:58.6Neutral

Price Target:JPY 1,267.00▲(4.28% Upside)

Action:reiterated

Date:11/11/26

The overall score is constrained by a significant disconnect between reported profitability and actual cash generation. The company's strong balance sheet provides a buffer, but the deeply negative cash flows are a major risk. This is compounded by a persistently bearish technical trend, with the stock trading far below key moving averages. The extremely low P/E ratio could be attractive if the company can resolve its cash flow issues, but for now, it reflects the market's skepticism.

Positive Factors

Revenue ExpansionThe sharp revenue increase indicates materially greater business scale and market activity than in the prior year. If the expanded revenue base can be maintained, it could support stronger operating leverage, broader reinvestment capacity, and a more durable earnings profile over the coming quarters.

Negative Factors

Negative Cash ConversionDeeply negative operating and free cash flow despite positive reported earnings signals that accounting profits are not currently translating into liquidity. If this persists, working-capital or investment demands could increase execution risk and eventually require additional funding.

Datasection, Inc. (3905) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 29.48B
Dividend Yield: ―
Average Volume (3M): 11.24M
Price to Earnings (P/E): 5.0
Beta (1Y): 1.19
Revenue Growth: 1178.31%
EPS Growth: ―
Country: Japan
Employees: 244
Sector: Technology
Sector Strength: 61
Industry: Software - Application

Datasection, Inc. Business Overview & Revenue Model

Company Description

Operating across Japan, Chile, and Colombia, Datasection Inc. specializes in delivering advanced solutions in social media analytics, retail marketing strategies, and artificial intelligence development. Their extensive suite of services encompasses...

Datasection, Inc. Financial Statement Overview

Summary

Financial performance is mixed. The Income Statement shows a dramatic revenue increase and a return to profitability (Score 68), and the Balance Sheet is exceptionally strong with minimal debt (Score 88). However, the Cash Flow Score is very weak at 35 due to deeply negative operating and free cash flow, indicating poor earnings quality. The overall financial picture is weighed down by significant cash burn.

Income Statement

68Positive

Balance Sheet

88Very Positive

Cash Flow

35Negative

Financial statement breakdown
Breakdown	TTM	Mar 2025	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	39.26B	2.94B	33.61B	2.23B	1.92B	1.69B
Gross Profit	11.85B	1.16B	6.28B	654.23M	680.48M	588.13M
EBITDA	9.34B	-222.70M	4.12B	-1.69M	193.59M	291.97M
Net Income	7.05B	-654.99M	2.80B	-1.26B	-530.29M	2.44M
Balance Sheet
Total Assets	32.99B	4.59B	28.58B	3.81B	4.42B	4.43B
Cash, Cash Equivalents and Short-Term Investments	762.75M	526.04M	417.81M	1.69B	1.45B	1.45B
Total Debt	505.74M	1.37B	545.38M	1.24B	1.51B	1.21B
Total Liabilities	6.98B	2.19B	9.17B	1.83B	1.91B	1.62B
Stockholders Equity	25.98B	2.38B	19.37B	1.95B	2.48B	2.80B
Cash Flow
Free Cash Flow	0	-177.43M	-9.54B	-203.17M	-84.27M	63.22M
Operating Cash Flow	0	-83.41M	-4.91B	333.60M	2.42M	113.09M
Investing Cash Flow	0	-1.19B	-8.30B	-569.26M	-255.77M	-304.07M
Financing Cash Flow	0	163.55M	13.12B	382.96M	242.02M	28.31M

Datasection, Inc. Technical Analysis

Technical Analysis SentimentNegative

Last Price1215.00

Price Trends

50DMA1649.44Negative

100DMA2156.95Negative

200DMA2265.98Negative

Market Momentum

MACD-92.86Positive

RSI36.95Neutral

STOCH2.25Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3905, the sentiment is Negative. The current price of 1215.00 is below the 20-day moving average (MA) of 1600.25, below the 50-day MA of 1649.44, and below the 200-day MA of 2265.98, indicating a bearish trend. The MACD of -92.86 indicates Positive momentum. The RSI at 36.95 is Neutral, neither overbought nor oversold. The STOCH value of 2.25 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3905.

Datasection, Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:3905 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4432	82Outperform	JPY 122.69B	16.72	―	2.99%	14.67%	39.11%
JP:5572	81Outperform	JPY 14.29B	34.53	―	―	15.44%	163.64%
JP:5586	68Neutral	JPY 11.22B	39.28	―	―	36.53%	93.50%
JP:4323	66Neutral	JPY 43.70B	19.25	―	2.78%	6.05%	-21.43%
JP:4259	65Neutral	JPY 54.79B	34.53	―	―	34.10%	―
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
JP:3905	59Neutral	JPY 46.51B	4.97	―	―	1178.31%	―

* Technology Sector Average

Performance Comparison

JP:3905 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:3905	Datasection, Inc.	1215.00	-1125.00	-48.08%
JP:4259	ExaWizards Inc.	575.00	-143.00	-19.92%
JP:4323	Japan System Techniques Co., Ltd.	1763.00	-501.95	-22.16%
JP:4432	WingArc1st Inc.	3545.00	102.76	2.99%
JP:5572	Ridge-i Inc.	3290.00	933.00	39.58%
JP:5586	Laboro.AI, Inc.	702.00	-247.00	-26.03%

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 11, 2026

Datasection, Inc. AI Stock Analysis