Precision System Science (TSE:7707) - Share price, News & Analysis

7707 fundamental analysis
Snowflake Score
Valuation	1/6
Future Growth	4/6
Past Performance	2/6
Financial Health	5/6
Dividends	1/6

7707 Stock Overview

Rewards

Trading at 17.5% below our estimate of its fair value

Earnings are forecast to grow 31.7% per year

Risk Analysis

Volatile share price over the past 3 months

Profit margins (4.2%) are lower than last year (6.4%)

Does not have a meaningful market cap (¥11B)

Precision System Science Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Precision System Science
Historical stock prices
Current Share Price	JP¥463.00
52 Week High	JP¥871.00
52 Week Low	JP¥360.00
Beta	1.29
1 Month Change	23.14%
3 Month Change	11.30%
1 Year Change	-43.19%
3 Year Change	8.43%
5 Year Change	-52.22%
Change since IPO	-80.56%

Shareholder Returns

	7707	JP Life Sciences	JP Market
7D	27.5%	1.8%	1.0%
1Y	-43.2%	-6.4%	-7.1%

Return vs Industry: 7707 underperformed the JP Life Sciences industry which returned -6.4% over the past year.

Return vs Market: 7707 underperformed the JP Market which returned -7.1% over the past year.

Price Volatility

Is 7707's price volatile compared to industry and market?
7707 volatility
7707 Average Weekly Movement	6.2%
Life Sciences Industry Average Movement	5.9%
Market Average Movement	4.2%
10% most volatile stocks in JP Market	8.5%
10% least volatile stocks in JP Market	2.3%

Stable Share Price: 7707 is more volatile than 75% of JP stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: 7707's weekly volatility (6%) has been stable over the past year, but is still higher than 75% of JP stocks.

About the Company

Founded	Employees	CEO	Website
1985	187	Hideji Tajima	https://www.pss.co.jp

Precision System Science Co., Ltd., together with its subsidiaries, develops, manufactures, and sells automated systems/instruments, other physicochemical instruments, software, and other products in Japan and internationally. The company manufactures and sells plastic consumables, which are used in automated systems/instruments, as well as reagents; and automated nucleic acid extraction and veterinary biochemical analysis systems. It also offers geneLEAD, an instrument for molecular testing; and engages in the research and development, and practical application of in vitro diagnosis testing market, including genetic and protein tests.

Precision System Science Fundamentals Summary

How do Precision System Science's earnings and revenue compare to its market cap?
7707 fundamental statistics
Market Cap	JP¥10.58b
Earnings (TTM)	JP¥332.00m
Revenue (TTM)	JP¥7.90b

38.5x

P/E Ratio

1.6x

P/S Ratio

Is 7707 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
7707 income statement (TTM)
Revenue	JP¥7.90b
Cost of Revenue	JP¥5.19b
Gross Profit	JP¥2.71b
Other Expenses	JP¥2.38b
Earnings	JP¥332.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 12, 2022

Earnings per share (EPS)	12.02
Gross Margin	34.29%
Net Profit Margin	4.20%
Debt/Equity Ratio	44.4%

How did 7707 perform over the long term?

See historical performance and comparison

Dividends

1.1%

Current Dividend Yield

42%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 7707 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 7707?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 7707. This is calculated by dividing 7707's market cap by their current preferred multiple.
What is 7707's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	JP¥10.58b

7707 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.4x
Enterprise Value/EBITDA	11.8x
PEG Ratio	1.2x

Price to Earnings Ratio vs Peers

How does 7707's PE Ratio compare to its peers?

7707 PE Ratio vs Peers

The above table shows the PE ratio for 7707 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	15.5x

Forward PE

Price-To-Earnings vs Peers: 7707 is expensive based on its Price-To-Earnings Ratio (38.5x) compared to the peer average (15.5x).

Price to Earnings Ratio vs Industry

How does 7707's PE Ratio compare vs other companies in the Life Sciences Industry?

Price-To-Earnings vs Industry: 7707 is expensive based on its Price-To-Earnings Ratio (38.5x) compared to the JP Life Sciences industry average (17.5x)

Price to Earnings Ratio vs Fair Ratio

What is 7707's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

7707 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	38.5x
Fair PE Ratio	22.7x

Price-To-Earnings vs Fair Ratio: 7707 is expensive based on its Price-To-Earnings Ratio (38.5x) compared to the estimated Fair Price-To-Earnings Ratio (22.7x).

Share Price vs Fair Value

What is the Fair Price of 7707 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 7707 (¥463) is trading below our estimate of fair value (¥560.93)

Significantly Below Fair Value: 7707 is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: 7707 is poor value based on its PEG Ratio (1.2x)

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Future Growth

How is Precision System Science forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

31.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 7707's forecast earnings growth (31.7% per year) is above the savings rate (0.02%).

Earnings vs Market: 7707's earnings (31.7% per year) are forecast to grow faster than the JP market (8.9% per year).

High Growth Earnings: 7707's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 7707's revenue (5.7% per year) is forecast to grow faster than the JP market (4.4% per year).

High Growth Revenue: 7707's revenue (5.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 7707's Return on Equity is forecast to be low in 3 years time (8.4%).

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Past Performance

How has Precision System Science performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

75.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 7707 has high quality earnings.

Growing Profit Margin: 7707's current net profit margins (4.2%) are lower than last year (6.4%).

Past Earnings Growth Analysis

Earnings Trend: 7707 has become profitable over the past 5 years, growing earnings by 75.6% per year.

Accelerating Growth: 7707's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 7707 had negative earnings growth (-38.9%) over the past year, making it difficult to compare to the Life Sciences industry average (73.5%).

Return on Equity

High ROE: 7707's Return on Equity (5.2%) is considered low.

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Financial Health

How is Precision System Science's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 7707's short term assets (¥6.9B) exceed its short term liabilities (¥2.7B).

Long Term Liabilities: 7707's short term assets (¥6.9B) exceed its long term liabilities (¥1.9B).

Debt to Equity History and Analysis

Debt Level: 7707's net debt to equity ratio (3.2%) is considered satisfactory.

Reducing Debt: 7707's debt to equity ratio has reduced from 49.3% to 44.4% over the past 5 years.

Debt Coverage: 7707's debt is not well covered by operating cash flow (14.3%).

Interest Coverage: 7707's interest payments on its debt are well covered by EBIT (10.6x coverage).

Balance Sheet

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Dividend

What is Precision System Science current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.08%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 7707's dividend (1.08%) isn’t notable compared to the bottom 25% of dividend payers in the JP market (1.71%).

High Dividend: 7707's dividend (1.08%) is low compared to the top 25% of dividend payers in the JP market (3.76%).

Stability and Growth of Payments

Stable Dividend: 7707 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 7707 has only been paying a dividend for 9 years, and since then payments have fallen.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (41.6%), 7707's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 7707 is paying a dividend but the company has no free cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

7.7yrs

Average management tenure

CEO

Hideji Tajima (73 yo)

33yrs

Tenure

Mr. Hideji Tajima has been the President and Chief Executive Officer of Precision System Science Co. Ltd. since June 1989. Mr. Tajima been the President of Precision System Science Europe GmbH since June 2...

Leadership Team

Experienced Management: 7707's management team is seasoned and experienced (7.7 years average tenure).

Board Members

Experienced Board: 7707's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/06/30