Encourage Technologies Co., Ltd. (3682) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

C&G Systems Inc. (Japan)

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CommSeed Corp.

Encourage Technologies Co., Ltd.

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Ecomott, Inc.

HOUSEI, Inc.

Welby, Inc.

enish, Inc.

Why is Encourage Technologies Co., Ltd. ?

Company has very low debt and has enough cash to service the debt requirements

Poor long term growth as Net Sales has grown by an annual rate of 5.34% and Operating profit at 12.88% over the last 5 years

Flat results in Jun 25

NET PROFIT(Q) At JPY 17.42 MM has Fallen at -68.36%
OPERATING PROFIT(Q) Lowest at JPY 55.49 MM
OPERATING PROFIT MARGIN(Q) Lowest at 8.77 %

With ROE of 6.27%, it has a very attractive valuation with a 1.22 Price to Book Value

The stock is trading at a premium compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 13.13%, its profits have risen by 0.6% ; the PEG ratio of the company is 19.4

Underperformed the market in the last 1 year

The stock has generated a return of 13.13% in the last 1 year, much lower than market (Japan Nikkei 225) returns of 28.54%

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Encourage Technologies 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 Encourage Technologies Co., Ltd. for you?

Low Risk, Low Return

Absolute

Risk Adjusted

Volatility

Encourage Technologies Co., Ltd.

13.13%

0.33

21.63%

Japan Nikkei 225

28.54%

1.11

25.75%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

5.34%

EBIT Growth (5y)

12.88%

EBIT to Interest (avg)

100.00

Debt to EBITDA (avg)

Negative Net Debt

Net Debt to Equity (avg)

-1.06

Sales to Capital Employed (avg)

0.72

Tax Ratio

27.35%

Dividend Payout Ratio

75.60%

Pledged Shares

Institutional Holding

ROCE (avg)

ROE (avg)

6.00%

Valuation

Valuation Scorecard

Valuation grade scale :

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

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.22

EV to EBIT

1.92

EV to EBITDA

0.98

EV to Capital Employed

-2.96

EV to Sales

0.23

PEG Ratio

19.43

Dividend Yield

ROCE (Latest)

Negative Capital Employed

ROE (Latest)

6.27%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Mildly Bearish

Dow Theory

Mildly Bullish

OBV

Mildly Bullish

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

4What is working for the Company

RAW MATERIAL COST(Y)

Fallen by -15.95% (YoY

CASH AND EQV(HY)

Highest at JPY 7,798.16 MM

DEBT-EQUITY RATIO (HY)

Lowest at -121.56 %

DEBTORS TURNOVER RATIO(HY)

Highest at 14.81%

-11What is not working for the Company

NET PROFIT(Q)

At JPY 17.42 MM has Fallen at -68.36%

OPERATING PROFIT(Q)

Lowest at JPY 55.49 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 8.77 %

PRE-TAX PROFIT(Q)

Lowest at JPY 26.71 MM

EPS(Q)

Lowest at JPY 2.62

Here's what is working for Encourage Technologies Co., Ltd.

Cash and Eqv

Highest at JPY 7,798.16 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debt-Equity Ratio

Lowest at -121.56 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Debtors Turnover Ratio

Highest at 14.81%

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its Debtors faster

Debtors Turnover Ratio

Raw Material Cost

Fallen by -15.95% (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 Encourage Technologies Co., Ltd.

Pre-Tax Profit

At JPY 26.71 MM has Fallen at -64.75%

over average net sales of the previous four periods of JPY 75.79 MM

MOJO Watch

Near term Pre-Tax Profit trend is very negative

Pre-Tax Profit (JPY MM)

Net Profit

At JPY 17.42 MM has Fallen at -68.36%

over average net sales of the previous four periods of JPY 55.06 MM

MOJO Watch

Near term Net Profit trend is very negative

Net Profit (JPY MM)

Operating Profit

Lowest at JPY 55.49 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (JPY MM)

Operating Profit Margin

Lowest at 8.77 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Pre-Tax Profit

Lowest at JPY 26.71 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is negative

Pre-Tax Profit (JPY MM)

Net Profit

Lowest at JPY 17.42 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is negative

Net Profit (JPY MM)

EPS

Lowest at JPY 2.62

in the last five periods

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (JPY)