System Location Co Ltd

System Location Co Ltd maintains a strong liquidity position, with a current ratio of 7.64 and no long-term debt, indicating a robust balance sheet and minimal leverage. The company's price-to-book ratio of 1.67 and price-to-tangible-book ratio of 1.67 suggest that the market values the company's equity at a moderate premium relative to its book value. The absence of long-term debt further supports the company's financial flexibility and low liquidity risk.

In terms of profitability, the company's return on equity (ROE) of 4.01% and return on assets (ROA) of 3.31% are below the typical thresholds for high-performing IT services firms, indicating that the company may not be generating returns as efficiently as its peers. The operating margin, calculated as operating income of 111,972,000 JPY on revenue of 4,181,400,000 JPY, is 2.68%, which is relatively low for the industry. This suggests that the company may be facing cost pressures or pricing constraints that are limiting its profitability.

The company's revenue is concentrated in a single business segment, as disclosed in its financial statements, with no material geographic diversification reported. This lack of diversification could expose the company to regional economic downturns or regulatory changes that may impact its operations. The absence of detailed segment reporting in the input data limits the ability to assess the performance of individual business lines.

Looking ahead, the company's revenue is expected to grow, with the most recent actual revenue of 1,733,470,000 JPY reported in the latest quarter. However, the full-year revenue of 4,181,400,000 JPY suggests that the company may be experiencing seasonal fluctuations or project-based revenue recognition patterns. The company's price-to-earnings ratio of 41.76 and enterprise value-to-EBITDA ratio of 36.85 indicate that the stock is currently trading at a premium to earnings and cash flow, which may reflect investor optimism about future growth prospects.

The company's risk profile is characterized by low liquidity and dilution risk, with no immediate filing-based flags detected. The absence of long-term debt and the high cash balance of 1,871,679,000 JPY provide a strong buffer against financial distress. However, the company's high price-to-earnings ratio may make it vulnerable to earnings disappointments or changes in investor sentiment. The risk assessment also notes no dilution potential in the near term, as the company has not issued additional shares recently.

Recent events, as reflected in the financial data, include the reporting of the last actual EPS of 84.19 JPY and the last actual revenue of 1,733,470,000 JPY. These figures suggest that the company has met or exceeded analyst expectations in the most recent quarter, which may have contributed to the current valuation multiples. The absence of recent filings or transcripts limits the ability to assess the company's strategic direction or operational performance in more detail.

Zero long-term debt provides a strong balance sheet, ranking above the 75th percentile of the cohort.

Revenue grew at a 7.4% CAGR over four years, demonstrating consistent top-line expansion.

Low dilution, liquidity, and credit risk flags suggest a stable operational environment for investors.

Return on equity of 4.0% trails the 4.3% cohort median, indicating below-average capital efficiency.

Revenue declined 4.3% year-over-year in the latest fiscal year, breaking the growth trend.

Revenue ¥436.3M, +5,8% YoY; Operating income −108,4% YoY.

• ▍Revenue ¥436.3M, +5,8% YoY
• ▍Operating income −108,4% YoY
• ▍Net income −158,3% YoY
• ▍Net margin -7.2%

Revenue ¥434.8M, +6,1% YoY; Operating income +18,3% YoY.

• ▍Revenue ¥434.8M, +6,1% YoY
• ▍Operating income +18,3% YoY
• ▍Net income +21,4% YoY
• ▍Net margin 24.1%

Revenue ¥433.3M, +1,6% YoY; Operating income +81,7% YoY.

• ▍Revenue ¥433.3M, +1,6% YoY
• ▍Operating income +81,7% YoY
• ▍Net income +132,3% YoY
• ▍Net margin 24.9%

Revenue ¥429.0M, +2,6% YoY; Operating income +43,1% YoY.

• ▍Revenue ¥429.0M, +2,6% YoY
• ▍Operating income +43,1% YoY
• ▍Net income −19,5% YoY
• ▍Net margin 27.0%

Revenue ¥412.2M; Operating income ¥111.2M.

• ▍Revenue ¥412.2M
• ▍Operating income ¥111.2M
• ▍Net margin 13.2%

Revenue ¥409.9M; Operating income ¥132.3M.

• ▍Revenue ¥409.9M
• ▍Operating income ¥132.3M
• ▍Net margin 21.1%

Revenue ¥426.6M; Operating income ¥88.8M.

• ▍Revenue ¥426.6M
• ▍Operating income ¥88.8M
• ▍Net margin 10.9%

Revenue ¥418.1M; Operating income ¥112.0M.

• ▍Revenue ¥418.1M
• ▍Operating income ¥112.0M
• ▍Net margin 34.4%

Revenue ¥1.73B, +4,0% YoY; Operating income +5,5% YoY.

• ▍Revenue ¥1.73B, +4,0% YoY
• ▍Operating income +5,5% YoY
• ▍Net income −10,2% YoY
• ▍Free cash flow −14,7% YoY
• ▍Net margin 17.1%

Revenue ¥1.67B, −4,3% YoY; Operating income −16,7% YoY.

• ▍Revenue ¥1.67B, −4,3% YoY
• ▍Operating income −16,7% YoY
• ▍Net income −11,5% YoY
• ▍Free cash flow +14,2% YoY
• ▍Net margin 19.8%

Revenue ¥1.74B, +2,7% YoY; Operating income −1,6% YoY.

• ▍Revenue ¥1.74B, +2,7% YoY
• ▍Operating income −1,6% YoY
• ▍Net income +1,2% YoY
• ▍Free cash flow +9,0% YoY
• ▍Net margin 21.5%

Revenue ¥1.70B, +30,2% YoY; Operating income −2,0% YoY.

• ▍Revenue ¥1.70B, +30,2% YoY
• ▍Operating income −2,0% YoY
• ▍Net income −12,6% YoY
• ▍Free cash flow −20,8% YoY
• ▍Net margin 21.8%