Finatext Holdings Ltd. (4419) AI Stock Analysis

• Market Cap: ¥64.07B
• Dividend Yield: N/A
• Average Volume (3M): 466.13K
• Price to Earnings (P/E): 96.0
• Beta (1Y): 1.16
• Revenue Growth: 43.29%
• EPS Growth: N/A
• Country: JP
• Employees: 294
• Sector: Technology
• Sector Strength: 83
• Industry: Software - Infrastructure
• EPS (TTM): 4.83
• Shares Outstanding: 51,300,213
• 10 Day Avg. Volume: 428,900
• 30 Day Avg. Volume: 466,133
• PEG Ratio: -11.25
• Price to Book (P/B): 5.76
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: 72 Outperform
• Price Target: ¥1,439.00 ▲(15.21%Upside)

Finatext Holdings Ltd. receives an overall score of 72. The company's robust financial performance, particularly in revenue growth and profitability improvement, is a major positive. Technical analysis supports a strong upward trend, though short-term corrections may occur due to overbought conditions. However, the stock's valuation is a concern, with a very high P/E ratio suggesting potential overvaluation. Addressing cash flow inefficiencies will be crucial for sustaining growth.

Finatext Holdings Ltd. Business Overview & Revenue Model

Company Description

Finatext Holdings Ltd. is a Japan-based technology company specializing in the development of financial and insurance technology solutions. The company operates primarily in the fintech sector, offering a range of digital financial services and products designed to enhance financial literacy and accessibility. Its core offerings include platforms and applications that enable users to engage with financial markets, insurance products, and personal financial management tools.

How the Company Makes Money

Finatext Holdings Ltd. generates revenue through multiple streams, primarily by providing financial technology solutions to businesses and consumers. The company earns money by licensing its software platforms to financial institutions and insurance companies, who use these platforms to offer their own digital services. Additionally, Finatext partners with these institutions to co-create tailored solutions, sharing in the revenue generated from end-users. The company also derives income from subscription fees charged to users of its consumer-facing applications, as well as transaction fees from any financial services facilitated through its platforms. Strategic partnerships and collaborations with industry leaders further enhance Finatext's revenue potential by expanding its market reach and integrating its technology into broader financial ecosystems.

Finatext Holdings Ltd. Financial Statement Overview

Summary

Finatext Holdings demonstrates strong revenue growth and improved profitability metrics, reflecting successful operational strategies. The balance sheet is robust with low leverage and a strong equity base, minimizing financial risk. However, cash flow management remains a concern, with a reliance on external financing to support liquidity. Addressing cash flow issues will be crucial for sustaining long-term growth and stability.

Income Statement

Finatext Holdings has shown a strong recovery in its revenue, with a significant growth from 2023 to 2024. The gross profit margin is healthy at 64.25% for TTM, indicating efficient cost management relative to revenue. However, the net profit margin for the TTM is 6.87%, which shows improvement but still indicates room for better profitability. The transition from negative to positive EBIT and EBITDA margins reflects operational improvements, contributing to the overall positive income statement performance.

Balance Sheet

The balance sheet of Finatext Holdings is solid with a strong equity base. The debt-to-equity ratio is low at 0.13 for TTM, suggesting low financial leverage and a conservative capital structure. The equity ratio is healthy at 50.68%, indicating that a significant portion of the company is financed by equity, which reduces financial risk. The company's ability to effectively manage its liabilities while maintaining high equity levels is a positive indicator.

Cash Flow

Cash flow analysis reveals challenges, as operating cash flow is absent in the TTM, and previous periods show negative free cash flow, indicating liquidity constraints. The absence of free cash flow suggests that Finatext Holdings may face difficulties in reinvesting in business growth or paying dividends without external financing. The company needs to focus on improving cash flow generation to support its operations and growth.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Dec 2019
Income Statement		Total Revenue
6.93B	5.38B	3.82B	2.72B	2.06B	1.71B
	Gross Profit
4.45B	3.23B	2.10B	1.67B	1.37B	1.28B
	EBIT
667.79M	204.94M	-328.72M	-542.61M	-559.05M	-721.57M
	EBITDA
740.68M	129.42M	-316.11M	-703.40M	-715.85M	-1.43B
	Net Income Common Stockholders
476.34M	-78.45M	-388.02M	-669.94M	-759.42M	-1.57B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.45B	4.77B	8.82B	8.83B	6.56B	6.14B
	Total Assets
17.42B	20.18B	17.71B	15.85B	12.66B	11.03B
	Total Debt
1.13B	666.80M	37.50M	138.00M	363.00M	490.00M
	Net Debt
-4.32B	-4.10B	-5.32B	-5.65B	-3.96B	-5.65B
	Total Liabilities
8.08B	11.45B	8.91B	6.67B	6.17B	3.68B
	Stockholders Equity
8.83B	8.22B	8.29B	8.59B	5.76B	6.49B
Cash Flow		Free Cash Flow
0.00	-1.20B	-402.40M	-1.79B	-1.92B	-2.21B
	Operating Cash Flow
0.00	-938.06M	-179.51M	-1.53B	-1.75B	-2.01B
	Investing Cash Flow
0.00	-343.67M	-233.63M	-279.40M	-26.37M	-313.38M
	Financing Cash Flow
0.00	684.02M	-32.08M	3.27B	-126.75M	1.31B

Finatext Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1249.00
• 50DMA: Positive
• 100DMA: Positive
• 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:4419, the sentiment is Neutral. The current price of 1249 is below the 20-day moving average (MA) of 1272.35, above the 50-day MA of 1030.12, and above the 200-day MA of 959.79, indicating a neutral trend. The MACD of 69.86 indicates Positive momentum. The RSI at 58.05 is Neutral, neither overbought nor oversold. The STOCH value of 29.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4419.

Finatext Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4431	80 Outperform	¥65.73B	41.09		0.45%	31.20%	44.01%
5036	79 Outperform	¥64.15B	15.22		2.13%	24.55%	83.97%
4419	72 Outperform	¥64.07B	96.05		―	43.29%	―
4435	67 Neutral	¥52.12B	172.35		―	24.81%	-58.00%
4475	66 Neutral	¥49.08B	40.54		0.20%	25.42%	36.27%
3854	63 Neutral	¥65.94B	21.26		1.71%	7.54%	3.48%
Sector *	62 Neutral	$11.81B	10.34	-7.44%	2.91%	7.41%	-7.93%