SECOM CO (SOMLY) AI Stock Analysis

SECOM CO

(Other OTC:SOMLY)

Select Model

Rating:61Neutral

Price Target:$11.00▲(1.95% Upside)

Action:reiterated

Date:08/17/26

SOMLY scores as a stable, low-risk defensive holding with a strong balance sheet and consistent revenue/earnings growth, but several factors limit the overall score. The most significant positive is the exceptionally conservative capital structure with minimal debt, providing resilience in uncertain markets. However, the stock is held back by declining free cash flow conversion in recent years, modest ROE (~8%), and limited margin expansion. Technically, the stock shows short-term weakness trading below its 20-day and 50-day moving averages, though longer-term trends remain supportive. Valuation at 23.6x earnings is fair but not attractive given the moderate growth profile and low dividend yield of 1.42%. SOMLY is best suited for conservative, income-oriented investors seeking stability rather than aggressive growth.

Positive Factors

Steady Revenue and Net Income GrowthMulti-year revenue and earnings growth indicates durable demand for SECOM’s security services and continued business expansion, providing a foundation for sustained profitability over the next several quarters.

Negative Factors

Inconsistent Cash ConversionUneven conversion of accounting earnings into cash can reduce funding predictability and may reflect working-capital or timing pressures, limiting confidence that reported profits will consistently support shareholder returns.

SECOM CO (SOMLY) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $8.98B
Dividend Yield: 1.58%
Average Volume (3M): 72.03K
Price to Earnings (P/E): 24.7
Beta (1Y): -0.06
Revenue Growth: 1.02%
EPS Growth: 2.31%
Country: US
Employees: 65,094
Sector: Industrials
Sector Strength: 63
Industry: Security & Protection Services

SECOM CO Business Overview & Revenue Model

Company Description

Secom Co., Ltd., established in 1962 and headquartered in Tokyo, Japan, is a global enterprise primarily known for its security services, complemented by a wide array of other offerings. Its Security Services division provides internet-connected secu...

How the Company Makes Money

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SECOM CO Financial Statement Overview

Summary

SECOM demonstrates steady revenue growth (¥1.04T to ¥1.20T over four years with ~9.5% projected growth in FY2026) and consistent profitability improvement. The balance sheet is exceptionally strong with a debt-to-equity ratio of ~0.05-0.06, providing significant financial resilience. However, free cash flow conversion has weakened in recent years (FCF/NI dropping from 68% to 43%), and net profit margins remain modest at ~9% with limited expansion. The conservative capital structure is a clear strength, but ROE of ~8% and declining free cash flow temper the overall financial score.

Income Statement

68Positive

Balance Sheet

82Very Positive

Cash Flow

62Positive

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2026	Mar 2025	Mar 2024	Mar 2023
Income Statement
Total Revenue	1.24T	1.20T	1.33T	1.15T	1.10T	1.05T
Gross Profit	382.79B	371.15B	402.62B	357.28B	342.46B	337.67B
EBITDA	237.16B	253.42B	255.32B	236.61B	223.18B	220.31B
Net Income	107.21B	108.11B	119.46B	101.95B	96.08B	94.27B
Balance Sheet
Total Assets	2.11T	2.15T	2.24T	2.08T	1.99T	1.91T
Cash, Cash Equivalents and Short-Term Investments	583.28B	584.63B	586.09B	599.15B	684.18B	685.86B
Total Debt	61.48B	72.34B	68.80B	68.96B	64.28B	67.63B
Total Liabilities	673.44B	697.84B	733.61B	690.09B	673.02B	651.72B
Stockholders Equity	1.26T	1.27T	1.32T	1.22T	1.16T	1.12T
Cash Flow
Free Cash Flow	40.72B	72.58B	137.83B	71.34B	85.09B	101.24B
Operating Cash Flow	60.73B	167.84B	212.57B	165.76B	146.43B	164.91B
Investing Cash Flow	-13.70B	-100.80B	-93.94B	-162.27B	-70.45B	-55.35B
Financing Cash Flow	-40.80B	-85.25B	-121.98B	-95.49B	-77.84B	-87.39B

SECOM CO Technical Analysis

Technical Analysis SentimentPositive

Last Price10.79

Price Trends

50DMA10.25Positive

100DMA10.25Positive

200DMA9.88Positive

Market Momentum

MACD0.15Negative

RSI63.87Neutral

STOCH28.79Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOMLY, the sentiment is Positive. The current price of 10.79 is above the 20-day moving average (MA) of 10.39, above the 50-day MA of 10.25, and above the 200-day MA of 9.88, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 63.87 is Neutral, neither overbought nor oversold. The STOCH value of 28.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOMLY.

SECOM CO Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

SOMLY against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALLE	82Outperform	$15.72B	23.10	32.68%	1.16%	10.33%	8.70%
ADT	78Outperform	$7.20B	12.80	16.83%	2.23%	2.10%	6.68%
NSSC	78Outperform	$1.41B	32.52	23.59%	1.55%	11.39%	0.75%
BCO	64Neutral	$4.23B	23.56	64.68%	0.99%	8.12%	16.12%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
SOMLY	61Neutral	$19.12B	24.65	8.70%	1.58%	1.02%	2.31%
SNT	50Neutral	$36.40M	74.28	1.16%	―	―	―

* Industrials Sector Average

Performance Comparison

SOMLY and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
SOMLY	SECOM CO	10.80	2.38	28.25%
BCO	Brink's	102.71	-2.48	-2.35%
SNT	Senstar Technologies Ltd.	1.56	-3.26	-67.63%
NSSC	Napco Security	39.35	-1.35	-3.33%
ALLE	Allegion PLC	186.44	23.28	14.27%
ADT	Adt, Inc.	9.86	2.03	25.93%

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: Aug 17, 2026

SECOM CO AI Stock Analysis