Drecom Co., Ltd. (3793) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Pro-Ship, Inc.

Japan Data Science Consortium Co., Ltd.

FINDEX, Inc.

Drecom Co., Ltd.

Cybertrust Japan Co. Ltd.

Geniee, Inc.

RPA Holdings, Inc.

gumi, Inc.

BrainPad, Inc.

AI inside, Inc.

T&S, Inc.

Why is Drecom Co., Ltd. ?

High Management Efficiency with a high ROE of 22.36%

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 35.89

Poor long term growth as Net Sales has grown by an annual rate of 4.51% over the last 5 years

With a growth in Net Sales of 34.23%, the company declared Outstanding results in Dec 25

RAW MATERIAL COST(Y) Fallen by -19.86% (YoY)
NET SALES(Q) Highest at JPY 5,062.66 MM
OPERATING PROFIT(Q) Highest at JPY 894.58 MM

Risky -

The stock is trading risky as compared to its average historical valuations
Over the past year, while the stock has generated a return of -35.02%, its profits have fallen by -83.8%

Consistent Underperformance against the benchmark over the last 3 years

Along with generating -35.02% returns in the last 1 year, the stock has also underperformed Japan Nikkei 225 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Drecom Co., Ltd. should be less than 10%
Overall Portfolio exposure to Software Products should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Software Products)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Drecom Co., Ltd. for you?

Medium Risk, Low Return

Absolute

Risk Adjusted

Volatility

Drecom Co., Ltd.

-33.61%

-1.05

42.48%

Japan Nikkei 225

38.94%

1.30

28.24%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

4.51%

EBIT Growth (5y)

-28.91%

EBIT to Interest (avg)

35.89

Debt to EBITDA (avg)

0.35

Net Debt to Equity (avg)

0.17

Sales to Capital Employed (avg)

1.27

Tax Ratio

7.58%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

ROCE (avg)

51.23%

ROE (avg)

22.36%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

113

Industry P/E

Price to Book Value

3.32

EV to EBIT

147.02

EV to EBITDA

25.79

EV to Capital Employed

2.99

EV to Sales

1.30

PEG Ratio

Dividend Yield

ROCE (Latest)

2.03%

ROE (Latest)

2.93%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Bearish

RSI

No Signal

Bollinger Bands

Sideways

Bearish

Moving Averages

Bearish (Daily)

KST

Mildly Bullish

Bearish

Dow Theory

Mildly Bullish

Mildly Bearish

OBV

No Trend

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

26What is working for the Company

RAW MATERIAL COST(Y)

Fallen by -19.86% (YoY

NET SALES(Q)

Highest at JPY 5,062.66 MM

OPERATING PROFIT(Q)

Highest at JPY 894.58 MM

OPERATING PROFIT MARGIN(Q)

Highest at 17.67 %

PRE-TAX PROFIT(Q)

Highest at JPY 657.1 MM

NET PROFIT(Q)

Highest at JPY 618.67 MM

EPS(Q)

Highest at JPY 21.47

-3What is not working for the Company

CASH AND EQV(HY)

Lowest at JPY 6,515.17 MM

DEBT-EQUITY RATIO (HY)

Highest at 19.49 %

Here's what is working for Drecom Co., Ltd.

Pre-Tax Profit

At JPY 657.1 MM has Grown at 1,355.96%

over average net sales of the previous four periods of JPY -52.32 MM

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (JPY MM)

Net Profit

At JPY 618.67 MM has Grown at 1,120.27%

over average net sales of the previous four periods of JPY -60.64 MM

MOJO Watch

Near term Net Profit trend is very positive

Net Profit (JPY MM)

Net Sales

Highest at JPY 5,062.66 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (JPY MM)

Net Sales

At JPY 5,062.66 MM has Grown at 20%

over average net sales of the previous four periods of JPY 4,218.94 MM

MOJO Watch

Near term sales trend is positive

Net Sales (JPY MM)

Operating Profit

Highest at JPY 894.58 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (JPY MM)

Operating Profit Margin

Highest at 17.67 %

in the last five periods

MOJO Watch

Company's profit margin has improved

Operating Profit to Sales

Pre-Tax Profit

Highest at JPY 657.1 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (JPY MM)

Net Profit

Highest at JPY 618.67 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is positive

Net Profit (JPY MM)

EPS

Highest at JPY 21.47

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (JPY)

Raw Material Cost

Fallen by -19.86% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Drecom Co., Ltd.

Cash and Eqv

Lowest at JPY 6,515.17 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Debt-Equity Ratio

Highest at 19.49 %

in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio