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2158

FRONTEO TSE:2158 Stock Report

Last Price

JP¥995.00

Market Cap

JP¥39.1b

7D

1.7%

1Y

-14.0%

Updated

26 Jun, 2022

Data

Company Financials +
2158 fundamental analysis
Snowflake Score
Valuation2/6
Future Growth5/6
Past Performance6/6
Financial Health6/6
Dividends0/6

2158 Stock Overview

FRONTEO, Inc. provides Asian-language eDiscovery solutions and services primarily in Japan, the United States, Korea, and internationally.

Rewards

Trading at 18.2% below our estimate of its fair value

Earnings are forecast to grow 21.19% per year

Earnings grew by 264.3% over the past year

Risk Analysis

Highly volatile share price over the past 3 months


FRONTEO Competitors

 

 

 

 

 

 

 

 

 

 

 

 

Price History & Performance

Summary of all time highs, changes and price drops for FRONTEO
Historical stock prices
Current Share PriceJP¥995.00
52 Week HighJP¥5,300.00
52 Week LowJP¥921.00
Beta1.79
1 Month Change-15.03%
3 Month Change-46.33%
1 Year Change-14.00%
3 Year Change182.67%
5 Year Change17.06%
Change since IPO132.75%

Recent News & Updates

Shareholder Returns

2158JP ITJP Market
7D1.7%3.7%1.9%
1Y-14.0%-10.3%-6.2%

Return vs Industry: 2158 underperformed the JP IT industry which returned -10.3% over the past year.

Return vs Market: 2158 underperformed the JP Market which returned -6.2% over the past year.

Price Volatility

Is 2158's price volatile compared to industry and market?
2158 volatility
2158 Average Weekly Movement11.1%
IT Industry Average Movement5.5%
Market Average Movement4.2%
10% most volatile stocks in JP Market8.5%
10% least volatile stocks in JP Market2.3%

Stable Share Price: 2158 is more volatile than 90% of JP stocks over the past 3 months, typically moving +/- 11% a week.

Volatility Over Time: 2158's weekly volatility (11%) has been stable over the past year, but is still higher than 75% of JP stocks.

About the Company

FoundedEmployeesCEOWebsite
2003315Masahiro Morimotohttps://www.fronteo.com

FRONTEO, Inc. provides Asian-language eDiscovery solutions and services primarily in Japan, the United States, Korea, and internationally. The company operates through LegalTech AI Business and AI Solution Business segments. It has eDiscovery and forensic information documented in Japanese, Korean, Chinese, and English.

FRONTEO Fundamentals Summary

How do FRONTEO's earnings and revenue compare to its market cap?
2158 fundamental statistics
Market CapJP¥39.12b
Earnings (TTM)JP¥1.31b
Revenue (TTM)JP¥10.93b

29.9x

P/E Ratio

3.6x

P/S Ratio

Is 2158 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
2158 income statement (TTM)
RevenueJP¥10.93b
Cost of RevenueJP¥5.36b
Gross ProfitJP¥5.57b
Other ExpensesJP¥4.27b
EarningsJP¥1.31b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)33.27
Gross Margin50.98%
Net Profit Margin11.96%
Debt/Equity Ratio49.6%

How did 2158 perform over the long term?

See historical performance and comparison

Dividends

0.3%

Current Dividend Yield

21%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is 2158 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • 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 2158?

Other financial metrics that can be useful for relative valuation.

2158 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/Revenue3.6x
Enterprise Value/EBITDA14.4x
PEG Ratio1.4x

Price to Earnings Ratio vs Peers

How does 2158's PE Ratio compare to its peers?

2158 PE Ratio vs Peers
The above table shows the PE ratio for 2158 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average37.7x

Price-To-Earnings vs Peers: 2158 is good value based on its Price-To-Earnings Ratio (29.9x) compared to the peer average (37.7x).

Price to Earnings Ratio vs Industry

How does 2158's PE Ratio compare vs other companies in the Japanese IT Industry?

Price-To-Earnings vs Industry: 2158 is expensive based on its Price-To-Earnings Ratio (29.9x) compared to the JP IT industry average (17.4x)

Price to Earnings Ratio vs Fair Ratio

What is 2158'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.

2158 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio29.9x
Fair PE Ratio27.4x

Price-To-Earnings vs Fair Ratio: 2158 is expensive based on its Price-To-Earnings Ratio (29.9x) compared to the estimated Fair Price-To-Earnings Ratio (27.4x).

Share Price vs Fair Value

What is the Fair Price of 2158 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 2158 (¥995) is trading below our estimate of fair value (¥1215.81)

Significantly Below Fair Value: 2158 is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: 2158 is poor value based on its PEG Ratio (1.4x)

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Future Growth

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

Future Growth Score

5/6

Future Growth Score 5/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE

21.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2158's forecast earnings growth (21.2% per year) is above the savings rate (0.02%).

Earnings vs Market: 2158's earnings (21.2% per year) are forecast to grow faster than the JP market (9% per year).

High Growth Earnings: 2158's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 2158's revenue (14.5% per year) is forecast to grow faster than the JP market (4.4% per year).

High Growth Revenue: 2158's revenue (14.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 2158's Return on Equity is forecast to be high in 3 years time (25.8%)

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Past Performance

How has FRONTEO performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE

53.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 2158 has high quality earnings.

Growing Profit Margin: 2158's current net profit margins (12%) are higher than last year (3.5%).

Past Earnings Growth Analysis

Earnings Trend: 2158 has become profitable over the past 5 years, growing earnings by 53.6% per year.

Accelerating Growth: 2158's earnings growth over the past year (264.3%) exceeds its 5-year average (53.6% per year).

Earnings vs Industry: 2158 earnings growth over the past year (264.3%) exceeded the IT industry 20.9%.

Return on Equity

High ROE: 2158's Return on Equity (20.3%) is considered high.

Discover strong past performing companies

Financial Health

How is FRONTEO's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: 2158's short term assets (¥5.9B) exceed its short term liabilities (¥2.6B).

Long Term Liabilities: 2158's short term assets (¥5.9B) exceed its long term liabilities (¥2.8B).

Debt to Equity History and Analysis

Debt Level: 2158 has more cash than its total debt.

Reducing Debt: 2158's debt to equity ratio has reduced from 157.1% to 49.6% over the past 5 years.

Debt Coverage: 2158's debt is well covered by operating cash flow (74.3%).

Interest Coverage: 2158 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is FRONTEO current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage

0.30%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 2158's dividend (0.3%) isn’t notable compared to the bottom 25% of dividend payers in the JP market (1.68%).

High Dividend: 2158's dividend (0.3%) is low compared to the top 25% of dividend payers in the JP market (3.74%).

Stability and Growth of Payments

Stable Dividend: 2158 is not paying a notable dividend for the JP market, therefore no need to check if payments are stable.

Growing Dividend: 2158 is not paying a notable dividend for the JP market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: 2158 is not paying a notable dividend for the JP market.

Cash Payout to Shareholders

Cash Flow Coverage: 2158 is not paying a notable dividend for the JP market.

Discover strong dividend paying companies

Management

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

2.9yrs

Average management tenure

CEO

Masahiro Morimoto (55 yo)

18.83yrs

Tenure

Mr. Masahiro Morimoto founded FRONTEO, Inc. since August 2003 and has been its Chairman of the Board and Chief Executive Officer since August 2003. Mr. Morimoto has been Executive Chairman at FRONTEO Healt...

Leadership Team

Experienced Management: 2158's management team is considered experienced (2.9 years average tenure).

Board Members

Experienced Board: 2158's board of directors are not considered experienced ( 2.4 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.

Top Shareholders

Company Information

FRONTEO, Inc.'s employee growth, exchange listings and data sources

Key Information

  • Name: FRONTEO, Inc.
  • Ticker: 2158
  • Exchange: TSE
  • Founded: 2003
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Implied Market Cap: JP¥39.117b
  • Shares outstanding: 39.31m
  • Website: https://www.fronteo.com

Number of Employees

Location

  • FRONTEO, Inc.
  • Meishan Takahama Building
  • 8th floor
  • Tokyo
  • 108-0075
  • Japan

Listings

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/06/26 00:00
End of Day Share Price2022/06/24 00:00
Earnings2022/03/31
Annual Earnings2022/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.