Reported Earnings • May 20
Full year 2026 earnings released: EPS: JP¥13.85 (vs JP¥14.10 in FY 2025) Full year 2026 results: EPS: JP¥13.85 (down from JP¥14.10 in FY 2025). Revenue: JP¥7.64b (up 25% from FY 2025). Net income: JP¥544.0m (down 2.0% from FY 2025). Profit margin: 7.1% (down from 9.1% in FY 2025). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 71% per year but the company’s share price has fallen by 1% per year, which means it is significantly lagging earnings. New Risk • May 18
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 8.1% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk Debt is not well covered by operating cash flow (7.4% operating cash flow to total debt). Minor Risks Share price has been volatile over the past 3 months (8.1% average weekly change). Large one-off items impacting financial results. Valuation Update With 7 Day Price Move • May 18
Investor sentiment deteriorates as stock falls 21% After last week's 21% share price decline to JP¥639, the stock trades at a trailing P/E ratio of 50.8x. Average trailing P/E is 14x in the IT industry in Japan. Total returns to shareholders of 3.2% over the past three years. Announcement • May 17
FRONTEO, Inc. to Report Q1, 2027 Results on Aug 14, 2026 FRONTEO, Inc. announced that they will report Q1, 2027 results on Aug 14, 2026 Announcement • May 15
FRONTEO, Inc., Annual General Meeting, Jun 25, 2026 FRONTEO, Inc., Annual General Meeting, Jun 25, 2026. Announcement • May 09
FRONTEO, Inc. to Report Fiscal Year 2026 Results on May 15, 2026 FRONTEO, Inc. announced that they will report fiscal year 2026 results on May 15, 2026 Board Change • May 01
High number of new and inexperienced directors There are 5 new directors who have joined the board in the last 3 years. The company's board is composed of: 5 new directors. 2 experienced directors. 5 highly experienced directors. Founder, Chairman of the Board, President & CEO Masahiro Morimoto is the most experienced director on the board, commencing their role in 2003. The following issues are considered to be risks according to the Simply Wall St Risk Model: Lack of board continuity. Lack of experienced directors. Reported Earnings • Feb 18
Third quarter 2026 earnings released: EPS: JP¥7.52 (vs JP¥1.98 in 3Q 2025) Third quarter 2026 results: EPS: JP¥7.52 (up from JP¥1.98 in 3Q 2025). Revenue: JP¥2.05b (up 29% from 3Q 2025). Net income: JP¥295.0m (up 278% from 3Q 2025). Profit margin: 14% (up from 4.9% in 3Q 2025). Revenue is forecast to grow 20% p.a. on average during the next 3 years, compared to a 5.2% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has increased by 50% per year but the company’s share price has only increased by 11% per year, which means it is significantly lagging earnings growth. Buy Or Sell Opportunity • Jan 26
Now 23% undervalued after recent price drop Over the last 90 days, the stock has fallen 9.6% to JP¥850. The fair value is estimated to be JP¥1,106, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 9.0% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 56% in 2 years. Earnings are forecast to grow by 264% in the next 2 years. Announcement • Dec 26
FRONTEO, Inc. to Report Q3, 2026 Results on Feb 16, 2026 FRONTEO, Inc. announced that they will report Q3, 2026 results on Feb 16, 2026 Buy Or Sell Opportunity • Dec 22
Now 21% undervalued after recent price drop Over the last 90 days, the stock has fallen 8.2% to JP¥855. The fair value is estimated to be JP¥1,081, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 9.0% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 56% in 2 years. Earnings are forecast to grow by 264% in the next 2 years. Price Target Changed • Dec 13
Price target increased by 39% to JP¥850 Up from JP¥610, the current price target is provided by 1 analyst. New target price is approximately in line with last closing price of JP¥825. Stock is up 30% over the past year. The company is forecast to post earnings per share of JP¥15.00 for next year compared to JP¥14.10 last year. New Risk • Nov 21
New major risk - Financial position The company's debt is not well covered by operating cash flow. Operating cash flow to total debt ratio: 8.8% This is considered a major risk. If the company's operating cash flows are too small relative to the size of their debt, it increases their balance sheet risk. The company has less cash from operations to cover its expenses from servicing large debt and it increases the risk of liquidity issues. It also extends the time it would take for the company to pay back the debt in full, meaning it may not be able to easily pay it all off in a distress scenario. Currently, the following risks have been identified for the company: Major Risks Debt is not well covered by operating cash flow (8.8% operating cash flow to total debt). Share price has been highly volatile over the past 3 months (10% average weekly change). Minor Risk Large one-off items impacting financial results. Buy Or Sell Opportunity • Nov 20
Now 21% overvalued after recent price rise Over the last 90 days, the stock has risen 13% to JP¥923. The fair value is estimated to be JP¥765, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has declined by 9.0% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 33% in 2 years. Earnings are forecast to grow by 210% in the next 2 years. New Risk • Nov 18
New minor risk - Financial position The company has a high level of debt. Net debt to equity ratio: 41% This is considered a minor risk. Having a high level of debt increases the company's balance sheet risk. The company has a higher interest repayment burden, leading to the need to allocate a greater amount of its earnings towards servicing the debt, potentially limiting growth options or shareholder distributions. It can also increase the risk of bankruptcy if business conditions deteriorate enough that the company can no longer meet its debt obligations. Currently, the following risks have been identified for the company: Major Risk Share price has been highly volatile over the past 3 months (10% average weekly change). Minor Risks High level of debt (41% net debt to equity). Large one-off items impacting financial results. Announcement • Nov 14
FRONTEO, Inc. (TSE:2158) announces an Equity Buyback for 200,000 shares, representing 0.51% for ¥100 million. FRONTEO, Inc. (TSE:2158) announces a share repurchase program. Under the program, the company will repurchase up to 200,000 shares, representing 0.51% of its issued share capital, for ¥100 million. The purpose of the program is to implement flexible capital policies that can respond to changes in the business environment and returning profits to shareholders to increase shareholder value. The program will run until January 16, 2026. As of September 30, 2025, the company had 39,241,403 shares outstanding (excluding treasury shares) and 123,459 shares in treasury. Buy Or Sell Opportunity • Nov 05
Now 24% overvalued Over the last 90 days, the stock has fallen 3.5% to JP¥941. The fair value is estimated to be JP¥756, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has declined by 12% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 35% in 2 years. Earnings are forecast to grow by 205% in the next 2 years. Buy Or Sell Opportunity • Oct 20
Now 20% overvalued after recent price rise Over the last 90 days, the stock has risen 67% to JP¥906. The fair value is estimated to be JP¥753, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has declined by 12% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 35% in 2 years. Earnings are forecast to grow by 205% in the next 2 years. Buy Or Sell Opportunity • Sep 04
Now 23% overvalued after recent price rise Over the last 90 days, the stock has risen 55% to JP¥938. The fair value is estimated to be JP¥763, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has declined by 12% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 35% in 2 years. Earnings are forecast to grow by 205% in the next 2 years. Reported Earnings • Aug 15
First quarter 2026 earnings released: JP¥4.27 loss per share (vs JP¥3.15 profit in 1Q 2025) First quarter 2026 results: JP¥4.27 loss per share (down from JP¥3.15 profit in 1Q 2025). Revenue: JP¥1.55b (down 2.2% from 1Q 2025). Net loss: JP¥168.0m (down 236% from profit in 1Q 2025). Revenue is forecast to grow 14% p.a. on average during the next 3 years, compared to a 5.4% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has fallen by 10% per year but the company’s share price has increased by 2% per year, which means it is well ahead of earnings. Buy Or Sell Opportunity • Jul 28
Now 31% overvalued after recent price rise Over the last 90 days, the stock has risen 74% to JP¥1,044. The fair value is estimated to be JP¥795, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has declined by 15% over the last 3 years. Meanwhile, the company has become profitable. For the next 3 years, revenue is forecast to grow by 13% per annum. Earnings are also forecast to grow by 19% per annum over the same time period. Reported Earnings • Jun 29
Full year 2025 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2025 results: EPS: JP¥14.10 (up from JP¥72.25 loss in FY 2024). Revenue: JP¥6.10b (down 17% from FY 2024). Net income: JP¥555.0m (up JP¥3.40b from FY 2024). Profit margin: 9.1% (up from net loss in FY 2024). Revenue missed analyst estimates by 3.2%. Earnings per share (EPS) exceeded analyst estimates by 11%. Revenue is forecast to grow 13% p.a. on average during the next 3 years, compared to a 5.4% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has fallen by 47% per year but the company’s share price has only fallen by 12% per year, which means it has not declined as severely as earnings. Buy Or Sell Opportunity • Jun 23
Now 21% undervalued Over the last 90 days, the stock has risen 3.7% to JP¥610. The fair value is estimated to be JP¥774, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 15% over the last 3 years. Meanwhile, the company has become profitable. For the next 3 years, revenue is forecast to grow by 13% per annum. Earnings are also forecast to grow by 19% per annum over the same time period. Reported Earnings • May 20
Full year 2025 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2025 results: EPS: JP¥14.10 (up from JP¥72.25 loss in FY 2024). Revenue: JP¥6.10b (down 17% from FY 2024). Net income: JP¥555.0m (up JP¥3.40b from FY 2024). Profit margin: 9.1% (up from net loss in FY 2024). Revenue missed analyst estimates by 3.2%. Earnings per share (EPS) exceeded analyst estimates by 11%. Revenue is forecast to grow 11% p.a. on average during the next 2 years, compared to a 5.8% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has fallen by 47% per year but the company’s share price has only fallen by 16% per year, which means it has not declined as severely as earnings. Announcement • May 18
FRONTEO, Inc. to Report Q1, 2026 Results on Aug 14, 2025 FRONTEO, Inc. announced that they will report Q1, 2026 results on Aug 14, 2025 Announcement • May 15
FRONTEO, Inc., Annual General Meeting, Jun 26, 2025 FRONTEO, Inc., Annual General Meeting, Jun 26, 2025. Announcement • May 01
FRONTEO, Inc. (TSE:2158) acquired Alnetz Co., Ltd. from group of shareholders. FRONTEO, Inc. (TSE:2158) agreed to acquire Alnetz Co., Ltd. from group of shareholders for ¥1.6 billion on April 24, 2025. A cash consideration of ¥1.55 billion will be paid by FRONTEO, Inc. As part of consideration, ¥1.55 billion is paid towards common equity of Alnetz Co., Ltd. The transaction will be financed through senior debt of ¥1 billion.
For the period ending October 31, 2024, Alnetz Co., Ltd. reported total revenue of ¥2.15 billion, EBIT of ¥75 million and net income of ¥64 million. As of October 31, 2024, Alnetz Co., Ltd. reported total assets of ¥1.07 billion and total common equity of ¥371 million.
The expected completion of the transaction is April 30, 2025.
FRONTEO, Inc. (TSE:2158) completed the acquisition of Alnetz Co., Ltd. from group of shareholders on April 30, 2025. Announcement • Apr 24
FRONTEO, Inc. (TSE:2158) agreed to acquire Alnetz Co., Ltd. from group of shareholders for ¥1.6 billion. FRONTEO, Inc. (TSE:2158) agreed to acquire Alnetz Co., Ltd. from group of shareholders for ¥1.6 billion on April 24, 2025. A cash consideration of ¥1.55 billion will be paid by FRONTEO, Inc. As part of consideration, ¥1.55 billion is paid towards common equity of Alnetz Co., Ltd. The transaction will be financed through senior debt of ¥1 billion.
For the period ending October 31, 2024, Alnetz Co., Ltd. reported total revenue of ¥2.15 billion, EBIT of ¥75 million and net income of ¥64 million. As of October 31, 2024, Alnetz Co., Ltd. reported total assets of ¥1.07 billion and total common equity of ¥371 million.
The expected completion of the transaction is April 30, 2025. Buy Or Sell Opportunity • Apr 14
Now 20% overvalued Over the last 90 days, the stock has fallen 12% to JP¥528. The fair value is estimated to be JP¥440, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has declined by 18% over the last 3 years. Meanwhile, the company became loss making. Reported Earnings • Feb 16
Third quarter 2025 earnings released: EPS: JP¥1.98 (vs JP¥3.71 loss in 3Q 2024) Third quarter 2025 results: EPS: JP¥1.98 (up from JP¥3.71 loss in 3Q 2024). Revenue: JP¥1.59b (down 8.4% from 3Q 2024). Net income: JP¥78.0m (up JP¥224.0m from 3Q 2024). Profit margin: 4.9% (up from net loss in 3Q 2024). Revenue is forecast to grow 11% p.a. on average during the next 3 years, compared to a 5.5% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 56 percentage points per year, which is a significant difference in performance. Announcement • Nov 15
FRONTEO, Inc. to Report Q3, 2025 Results on Feb 14, 2025 FRONTEO, Inc. announced that they will report Q3, 2025 results on Feb 14, 2025 Announcement • Sep 26
FRONTEO, Inc. to Report Q2, 2025 Results on Nov 14, 2024 FRONTEO, Inc. announced that they will report Q2, 2025 results on Nov 14, 2024 Price Target Changed • Sep 21
Price target increased by 24% to JP¥720 Up from JP¥580, the current price target is provided by 1 analyst. New target price is approximately in line with last closing price of JP¥717. Stock is up 13% over the past year. The company is forecast to post earnings per share of JP¥8.10 next year compared to a net loss per share of JP¥72.25 last year. Buy Or Sell Opportunity • Sep 03
Now 24% overvalued after recent price rise Over the last 90 days, the stock has risen 29% to JP¥778. The fair value is estimated to be JP¥626, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has declined by 20% over the last 3 years. Meanwhile, the company became loss making. Reported Earnings • Aug 19
First quarter 2025 earnings released: EPS: JP¥3.15 (vs JP¥11.52 loss in 1Q 2024) First quarter 2025 results: EPS: JP¥3.15 (up from JP¥11.52 loss in 1Q 2024). Revenue: JP¥1.58b (up 7.3% from 1Q 2024). Net income: JP¥124.0m (up JP¥577.0m from 1Q 2024). Profit margin: 7.8% (up from net loss in 1Q 2024). Revenue is forecast to grow 4.8% p.a. on average during the next 3 years, compared to a 4.9% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 83 percentage points per year, which is a significant difference in performance. Buy Or Sell Opportunity • Aug 07
Now 22% overvalued Over the last 90 days, the stock has fallen 19% to JP¥507. The fair value is estimated to be JP¥415, however this is not to be taken as a sell recommendation but rather should be used as a guide only. Revenue has declined by 20% over the last 3 years. Meanwhile, the company became loss making. New Risk • Aug 05
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 6.1% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. This is currently the only risk that has been identified for the company. Price Target Changed • Jul 26
Price target decreased by 21% to JP¥580 Down from JP¥730, the current price target is provided by 1 analyst. New target price is approximately in line with last closing price of JP¥606. Stock is down 17% over the past year. The company is forecast to post earnings per share of JP¥6.10 next year compared to a net loss per share of JP¥72.25 last year. Announcement • Jun 22
FRONTEO, Inc. to Report Q1, 2025 Results on Aug 15, 2024 FRONTEO, Inc. announced that they will report Q1, 2025 results on Aug 15, 2024 Reported Earnings • May 20
Full year 2024 earnings: Revenues exceed analysts expectations while EPS lags behind Full year 2024 results: JP¥72.25 loss per share (further deteriorated from JP¥43.27 loss in FY 2023). Revenue: JP¥7.38b (up 2.2% from FY 2023). Net loss: JP¥2.84b (loss widened 67% from FY 2023). Revenue exceeded analyst estimates by 3.9%. Earnings per share (EPS) missed analyst estimates significantly. Revenue is forecast to grow 19% p.a. on average during the next 3 years, compared to a 5.0% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 98 percentage points per year, which is a significant difference in performance. Announcement • May 17
FRONTEO, Inc., Annual General Meeting, Jun 27, 2024 FRONTEO, Inc., Annual General Meeting, Jun 27, 2024. New Risk • Mar 26
New major risk - Share price stability The company's share price has been highly volatile over the past 3 months. It is more volatile than 90% of Japanese stocks, typically moving 8.9% a week. This is considered a major risk. Share price volatility increases the risk of potential losses in the short-term as the stock tends to have larger drops in price more frequently than other stocks. It may also indicate the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. This is currently the only risk that has been identified for the company. Announcement • Mar 23
FRONTEO, Inc. to Report Fiscal Year 2024 Results on May 15, 2024 FRONTEO, Inc. announced that they will report fiscal year 2024 results on May 15, 2024 Reported Earnings • Feb 16
Third quarter 2024 earnings released: JP¥3.71 loss per share (vs JP¥10.68 loss in 3Q 2023) Third quarter 2024 results: JP¥3.71 loss per share (improved from JP¥10.68 loss in 3Q 2023). Revenue: JP¥1.73b (up 10% from 3Q 2023). Net loss: JP¥146.0m (loss narrowed 65% from 3Q 2023). Revenue is forecast to grow 20% p.a. on average during the next 3 years, compared to a 5.4% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 97 percentage points per year, which is a significant difference in performance. Announcement • Dec 27
FRONTEO, Inc. to Report Q3, 2024 Results on Feb 14, 2024 FRONTEO, Inc. announced that they will report Q3, 2024 results on Feb 14, 2024 Reported Earnings • Nov 18
Second quarter 2024 earnings released: JP¥1.47 loss per share (vs JP¥7.83 loss in 2Q 2023) Second quarter 2024 results: JP¥1.47 loss per share (improved from JP¥7.83 loss in 2Q 2023). Revenue: JP¥1.98b (down 3.2% from 2Q 2023). Net loss: JP¥58.0m (loss narrowed 81% from 2Q 2023). Revenue is forecast to grow 20% p.a. on average during the next 3 years, compared to a 5.6% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 85 percentage points per year, which is a significant difference in performance. Announcement • Sep 23
FRONTEO, Inc. to Report Q2, 2024 Results on Nov 14, 2023 FRONTEO, Inc. announced that they will report Q2, 2024 results on Nov 14, 2023 Reported Earnings • Aug 15
First quarter 2024 earnings released: JP¥11.52 loss per share (vs JP¥8.78 loss in 1Q 2023) First quarter 2024 results: JP¥11.52 loss per share (further deteriorated from JP¥8.78 loss in 1Q 2023). Revenue: JP¥1.47b (down 30% from 1Q 2023). Net loss: JP¥453.0m (loss widened 31% from 1Q 2023). Revenue is forecast to grow 25% p.a. on average during the next 3 years, compared to a 6.0% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has fallen by 57% per year but the company’s share price has only fallen by 9% per year, which means it has not declined as severely as earnings. Announcement • Jun 24
FRONTEO, Inc. to Report Q1, 2024 Results on Aug 14, 2023 FRONTEO, Inc. announced that they will report Q1, 2024 results on Aug 14, 2023 New Risk • Jun 22
New major risk - Share price stability The company's share price has been highly volatile over the past 3 months. It is more volatile than 90% of Japanese stocks, typically moving 8.3% a week. This is considered a major risk. Share price volatility increases the risk of potential losses in the short-term as the stock tends to have larger drops in price more frequently than other stocks. It may also indicate the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. This is currently the only risk that has been identified for the company. Reported Earnings • May 19
Full year 2023 earnings: EPS and revenues miss analyst expectations Full year 2023 results: JP¥43.27 loss per share (down from JP¥33.33 profit in FY 2022). Revenue: JP¥7.22b (down 34% from FY 2022). Net loss: JP¥1.70b (down 230% from profit in FY 2022). Revenue missed analyst estimates by 3.8%. Earnings per share (EPS) also missed analyst estimates by 3.0%. Revenue is forecast to grow 21% p.a. on average during the next 3 years, compared to a 6.0% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has fallen by 6% per year but the company’s share price has increased by 5% per year, which means it is well ahead of earnings. Reported Earnings • Feb 16
Third quarter 2023 earnings released: JP¥10.68 loss per share (vs JP¥2.98 profit in 3Q 2022) Third quarter 2023 results: JP¥10.68 loss per share (down from JP¥2.98 profit in 3Q 2022). Revenue: JP¥1.57b (down 40% from 3Q 2022). Net loss: JP¥420.0m (down 459% from profit in 3Q 2022). Revenue is forecast to grow 30% p.a. on average during the next 3 years, compared to a 6.6% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has increased by 56% per year but the company’s share price has only increased by 33% per year, which means it is significantly lagging earnings growth. Announcement • Dec 28
FRONTEO, Inc. to Report Q3, 2023 Results on Feb 14, 2023 FRONTEO, Inc. announced that they will report Q3, 2023 results on Feb 14, 2023 Reported Earnings • Nov 16
Second quarter 2023 earnings released: JP¥7.83 loss per share (vs JP¥8.70 profit in 2Q 2022) Second quarter 2023 results: JP¥7.83 loss per share (down from JP¥8.70 profit in 2Q 2022). Revenue: JP¥2.04b (down 29% from 2Q 2022). Net loss: JP¥308.0m (down 190% from profit in 2Q 2022). Revenue is forecast to grow 25% p.a. on average during the next 3 years, compared to a 6.6% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has increased by 94% per year but the company’s share price has only increased by 43% per year, which means it is significantly lagging earnings growth. Board Change • Nov 16
High number of new and inexperienced directors There are 8 new directors who have joined the board in the last 3 years. The company's board is composed of: 8 new directors. 1 experienced director. 3 highly experienced directors. Founder, Chairman of the Board & CEO Masahiro Morimoto is the most experienced director on the board, commencing their role in 2003. The following issues are considered to be risks according to the Simply Wall St Risk Model: Lack of board continuity. Lack of experienced directors. Buying Opportunity • Sep 20
Now 21% undervalued after recent price drop Over the last 90 days, the stock is down 25%. The fair value is estimated to be JP¥923, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 35% in 2 years. Earnings is forecast to grow by 227% in the next 2 years. Announcement • Sep 01
FRONTEO, Inc. to Report Q2, 2023 Results on Nov 14, 2022 FRONTEO, Inc. announced that they will report Q2, 2023 results on Nov 14, 2022 Reported Earnings • Aug 17
First quarter 2023 earnings released: JP¥8.78 loss per share (vs JP¥12.04 profit in 1Q 2022) First quarter 2023 results: JP¥8.78 loss per share (down from JP¥12.04 profit in 1Q 2022). Revenue: JP¥2.11b (down 31% from 1Q 2022). Net loss: JP¥345.0m (down 173% from profit in 1Q 2022). Over the next year, revenue is forecast to grow 11%, compared to a 12% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has increased by 108% per year but the company’s share price has only increased by 51% per year, which means it is significantly lagging earnings growth. Valuation Update With 7 Day Price Move • Aug 16
Investor sentiment deteriorated over the past week After last week's 16% share price decline to JP¥828, the stock trades at a forward P/E ratio of 42x. Average forward P/E is 18x in the IT industry in Japan. Total returns to shareholders of 227% over the past three years. Buying Opportunity • Aug 10
Now 21% undervalued after recent price drop Over the last 90 days, the stock is down 25%. The fair value is estimated to be JP¥1,205, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Earnings per share has grown by 106%. For the next 3 years, revenue is forecast to grow by 15% per annum. Earnings is also forecast to grow by 21% per annum over the same time period. Valuation Update With 7 Day Price Move • Jul 11
Investor sentiment improved over the past week After last week's 24% share price gain to JP¥1,127, the stock trades at a forward P/E ratio of 58x. Average forward P/E is 18x in the IT industry in Japan. Total returns to shareholders of 207% over the past three years. Announcement • Jul 09
FRONTEO, Inc. to Report Q1, 2023 Results on Aug 15, 2022 FRONTEO, Inc. announced that they will report Q1, 2023 results on Aug 15, 2022 Major Estimate Revision • Jun 23
Consensus revenue estimates fall by 31% The consensus outlook for revenues in 2023 has deteriorated. 2023 revenue forecast decreased from JP¥15.0b to JP¥10.4b. EPS estimate fell from JP¥48.20 to JP¥19.60 per share. Net income forecast to shrink 41% next year vs 13% growth forecast for IT industry in Japan . Consensus price target down from JP¥4,700 to JP¥1,600. Share price fell 4.4% to JP¥955 over the past week. Buying Opportunity • Jun 17
Now 20% undervalued after recent price drop Over the last 90 days, the stock is down 51%. The fair value is estimated to be JP¥1,230, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Earnings per share has grown by 106%. Revenue is forecast to grow by 74% in 2 years. Earnings is forecast to grow by 114% in the next 2 years. Reported Earnings • May 25
Full year 2022 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2022 results: EPS: JP¥33.33 (up from JP¥9.32 in FY 2021). Revenue: JP¥10.9b (up 5.4% from FY 2021). Net income: JP¥1.31b (up 264% from FY 2021). Profit margin: 12% (up from 3.5% in FY 2021). The increase in margin was primarily driven by higher revenue. Revenue missed analyst estimates by 4.9%. Earnings per share (EPS) exceeded analyst estimates by 11%. Over the next year, revenue is forecast to grow 37%, compared to a 8.6% growth forecast for the industry in Japan. Over the last 3 years on average, earnings per share has increased by 106% per year but the company’s share price has only increased by 40% per year, which means it is significantly lagging earnings growth. Valuation Update With 7 Day Price Move • May 23
Investor sentiment deteriorated over the past week After last week's 17% share price decline to JP¥1,069, the stock trades at a forward P/E ratio of 24x. Average forward P/E is 19x in the IT industry in Japan. Total returns to shareholders of 190% over the past three years. Announcement • May 22
FRONTEO, Inc., Annual General Meeting, Jun 29, 2022 FRONTEO, Inc., Annual General Meeting, Jun 29, 2022. Price Target Changed • Apr 27
Price target increased to JP¥4,700 Up from JP¥326, the current price target is provided by 1 analyst. New target price is 207% above last closing price of JP¥1,530. Stock is up 110% over the past year. The company is forecast to post earnings per share of JP¥30.10 for next year compared to JP¥9.32 last year. Board Change • Apr 27
Less than half of directors are independent There are 6 new directors who have joined the board in the last 3 years. Of these new board members, 1 was an independent director. The company's board is composed of: 3 independent directors. 5 non-independent directors. Independent Outside Director Taeko Nagayama was the last independent director to join the board, commencing their role in 2021. The following issues are considered to be risks according to the Simply Wall St Risk Model: Minority of independent directors. Lack of board continuity. Announcement • Apr 07
FRONTEO, Inc. to Report Fiscal Year 2022 Results on May 20, 2022 FRONTEO, Inc. announced that they will report fiscal year 2022 results on May 20, 2022 Reported Earnings • Feb 16
Third quarter 2022 earnings: Revenues and EPS in line with analyst expectations Third quarter 2022 results: EPS: JP¥2.98 (up from JP¥2.68 in 3Q 2021). Revenue: JP¥2.60b (up 3.3% from 3Q 2021). Net income: JP¥117.0m (up 14% from 3Q 2021). Profit margin: 4.5% (up from 4.1% in 3Q 2021). The increase in margin was driven by higher revenue. Revenue was in line with analyst estimates. Over the next year, revenue is forecast to grow 25%, compared to a 7.2% growth forecast for the industry in Japan. Over the last 3 years on average, earnings per share has increased by 71% per year but the company’s share price has only increased by 47% per year, which means it is significantly lagging earnings growth. Valuation Update With 7 Day Price Move • Feb 15
Investor sentiment deteriorated over the past week After last week's 20% share price decline to JP¥2,350, the stock trades at a forward P/E ratio of 58x. Average forward P/E is 18x in the IT industry in Japan. Total returns to shareholders of 274% over the past three years. Board Change • Jan 31
Less than half of directors are independent There are 6 new directors who have joined the board in the last 3 years. Of these new board members, 1 was an independent director. The company's board is composed of: 3 independent directors. 5 non-independent directors. Independent Outside Director Taeko Nagayama was the last independent director to join the board, commencing their role in 2021. The following issues are considered to be risks according to the Simply Wall St Risk Model: Minority of independent directors. Lack of board continuity. Announcement • Mar 04
FRONTEO, Inc. to Report Fiscal Year 2021 Results on May 20, 2021 FRONTEO, Inc. announced that they will report fiscal year 2021 results on May 20, 2021 Announcement • Dec 10
FRONTEO, Inc. to Report Q3, 2021 Results on Feb 15, 2021 FRONTEO, Inc. announced that they will report Q3, 2021 results on Feb 15, 2021 Announcement • Dec 04
FRONTEO, Inc. announced that it has received ¥799.9338 million in funding from Focus Systems Corporation, Gakken Holdings Co., Ltd. On December 2, 2020, FRONTEO, Inc. (TSE:2158) closed the transaction. Announcement • Nov 18
FRONTEO, Inc. announced that it expects to receive ¥799.9338 million in funding from Focus Systems Corporation, Gakken Holdings Co., Ltd. FRONTEO, Inc. (TSE:2158) announced a private placement of 1,044,300 shares at a price of ¥766 per share for gross proceeds of ¥799,933,800 on November 16, 2020. The transaction will include participation from Focus Systems Corporation (TSE:4662) for 652,700 shares and Gakken Holdings Co., Ltd. (TSE:9470) for 391,600 shares. The transaction is expected to close on December 2, 2020. The company will issue securities through third-party allotment method. The securities will have a hold period of one year from date of allocation. The transaction was approved by the board of directors of the company. The company will receive net funds of ¥791,933,800. Announcement • Aug 30
FRONTEO, Inc. to Report Q2, 2021 Results on Nov 16, 2020 FRONTEO, Inc. announced that they will report Q2, 2021 results at 12:00 PM, GMT Standard Time on Nov 16, 2020