User Local, Inc. (3984) AI Stock Analysis

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User Local, Inc.

(TSE/TYO:3984)

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Rating:75.5Outperform

Price Target:JPY 1,520.00▲(10.14% Upside)

Action:reiterated

Date:11/12/26

The company's outstanding financial performance, marked by high profitability and a pristine, debt-free balance sheet, is the primary strength driving the score. An attractive P/E ratio of 12.88 further supports the investment case. However, the score is significantly weighed down by weak technicals, as the stock is in a sustained downtrend with bearish momentum across all key indicators.

Positive Factors

Durable ProfitabilityConsistently high gross and operating profitability, with net profit around 27%–31%, indicates an efficient business model with meaningful earnings retention. Sustaining these margins can support reinvestment, resilience, and dependable earnings generation over the next several quarters.

Negative Factors

Decelerating Revenue GrowthA slowing revenue trajectory can reduce operating leverage and make it harder to sustain the company’s current earnings pace. If deceleration persists, User Local may have fewer opportunities to expand its profit base and may need stronger execution to maintain long-term growth.

User Local, Inc. (3984) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 21.55B
Dividend Yield: 1.74%
Average Volume (3M): 95.14K
Price to Earnings (P/E): 13.7
Beta (1Y): 0.85
Revenue Growth: 15.59%
EPS Growth: 6.88%
Country: Japan
Employees: 121
Sector: General
Sector Strength: 55
Industry: Information Technology Services

User Local, Inc. Business Overview & Revenue Model

Company Description

Established in Tokyo, Japan, in 2005, User Local, Inc. is a technology company dedicated to developing sophisticated analytical instruments for web developers and marketing specialists. The firm's primary focus lies in the research and development of...

User Local, Inc. Financial Statement Overview

Summary

Exceptional financial health with a debt-free balance sheet, robust cash flow generation (FCF up 42% YoY), and high profitability (net margins ~30%). Revenue growth remains strong at 16.6%, though deceleration from prior peaks is noted.

Income Statement

88Very Positive

Balance Sheet

95Very Positive

Cash Flow

90Very Positive

Financial statement breakdown
Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	5.34B	5.34B	4.58B	3.91B	3.29B	2.68B
Gross Profit	4.76B	4.76B	4.12B	3.57B	3.05B	2.48B
EBITDA	2.27B	2.26B	2.01B	1.76B	1.28B	1.04B
Net Income	1.63B	1.63B	1.43B	1.19B	954.35M	721.89M
Balance Sheet
Total Assets	11.18B	11.18B	9.97B	8.84B	7.21B	6.24B
Cash, Cash Equivalents and Short-Term Investments	9.75B	9.75B	8.55B	7.68B	6.37B	5.32B
Total Debt	0	0	0	0	0	0
Total Liabilities	1.73B	1.73B	1.27B	1.11B	871.51M	700.50M
Stockholders Equity	9.45B	9.45B	8.70B	7.72B	6.34B	5.54B
Cash Flow
Free Cash Flow	0	2.19B	1.55B	1.53B	1.29B	869.30M
Operating Cash Flow	0	2.24B	1.81B	1.55B	1.31B	911.55M
Investing Cash Flow	0	37.16M	-260.31M	-198.80M	-28.03M	-120.50M
Financing Cash Flow	0	-1.07B	-676.70M	-36.68M	-238.22M	-167.26M

User Local, Inc. Technical Analysis

Technical Analysis SentimentNeutral

Last Price1380.00

Price Trends

50DMA1496.44Negative

100DMA1595.91Negative

200DMA1618.18Negative

Market Momentum

MACD-54.59Positive

RSI43.85Neutral

STOCH52.37Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3984, the sentiment is Neutral. The current price of 1380.00 is below the 20-day moving average (MA) of 1430.40, below the 50-day MA of 1496.44, and below the 200-day MA of 1618.18, indicating a bearish trend. The MACD of -54.59 indicates Positive momentum. The RSI at 43.85 is Neutral, neither overbought nor oversold. The STOCH value of 52.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3984.

User Local, Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:3984 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4709	76Outperform	JPY 33.66B	13.34	―	4.69%	2.34%	-2.26%
JP:3984	76Outperform	JPY 21.19B	13.68	―	1.74%	15.59%	6.88%
JP:5574	72Outperform	JPY 20.59B	18.39	―	―	27.68%	126.99%
JP:8275	58Neutral	JPY 25.56B	17.54	―	3.09%	0.42%	-23.67%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:2158	50Neutral	JPY 24.75B	40.48	―	―	27.44%	131.69%

* General Sector Average

Performance Comparison

JP:3984 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:3984	User Local, Inc.	1380.00	-534.86	-27.93%
JP:2158	FRONTEO, Inc.	625.00	-315.00	-33.51%
JP:4709	ID Holdings Corporation	1012.00	33.76	3.45%
JP:5574	ABEJA,Inc.	1970.00	-688.00	-25.88%
JP:8275	Forval Corporation	1003.00	-170.06	-14.50%

User Local, Inc. Corporate Events

User Local Announces Share Buyback and Cancellation Plan

Nov 12, 2026

User Local, Inc. is listed on the Tokyo Stock Exchange Prime Market; the release does not specify an industry or primary products or services.The company’s board resolved on November 12, 2026, to purchase up to 270,000 common shares, approximately 1....

User Local Reports Higher Quarterly Sales and Lower Profits

Nov 11, 2026

User Local, Inc. is listed on the Tokyo Stock Exchange under securities code 3984. The release does not specify its industry, primary products or services, or market focus.For the three months ended September 30, 2026, net sales rose 14.6% year on ye...

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 12, 2026

User Local, Inc. AI Stock Analysis