N

NEC Networks & System Integration Corp
TSE:1973

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NEC Networks & System Integration Corp
TSE:1973
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Price: 3 315 JPY Market Closed
Market Cap: 493.8B JPY
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Intrinsic Value

The intrinsic value of one NEC Networks & System Integration Corp stock under the Base Case scenario is 2 509.68 JPY. Compared to the current market price of 3 315 JPY, NEC Networks & System Integration Corp is Overvalued by 24%.

The Intrinsic Value is calculated as the average of DCF and Relative values:

Intrinsic Value
2 509.68 JPY
Overvaluation 24%
Intrinsic Value
Price
N
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NEC Networks & System Integration Corp

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Backtest Conclusion
Very Attractive
Current Valuation
+45%
Avg Valuation
-12%
Worst Valuation
-49%
Best Valuation
+45%

Stock is trading at its lowest valuation over the past 5 years.

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Financials
Annual
Quarterly
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TTM

Balance Sheet Decomposition
NEC Networks & System Integration Corp

Current Assets 216.4B
Cash & Short-Term Investments 87.6B
Receivables 99.1B
Other Current Assets 29.7B
Non-Current Assets 48.8B
PP&E 14.6B
Intangibles 3.6B
Other Non-Current Assets 30.6B
Current Liabilities 78.2B
Accounts Payable 37.6B
Accrued Liabilities 29m
Short-Term Debt 5.1B
Other Current Liabilities 35.5B
Non-Current Liabilities 36.4B
Other Non-Current Liabilities 36.4B
Efficiency

Earnings Waterfall
NEC Networks & System Integration Corp

Revenue
366.9B JPY
Cost of Revenue
-294.3B JPY
Gross Profit
72.6B JPY
Operating Expenses
-47.2B JPY
Operating Income
25.5B JPY
Other Expenses
-8.8B JPY
Net Income
16.7B JPY

Free Cash Flow Analysis
NEC Networks & System Integration Corp

Last Value
3-Years Average
FCF Margin
Conversion Rate
Earnings Calls

In SI and Service, orders and net sales saw mixed results, with overall Service orders down 7% mainly due to COVID-related business closures and telecom spending cuts. However, SI/Construction orders grew 20%, and if COVID-related issues are excluded, Service even showed a 2% increase year-over-year. DX Solutions' orders dipped 1% due to call center closures, but strategic growth areas like work-style DX are thriving, leading to a 14% increase in net sales. Network Solutions struggled with an 11% decrease in orders reflecting telecom CapEx cuts. Meanwhile, Environmental and Social Solutions (ESS) performed well, with orders up 31% and promising backlog contributions. Operating income rose meaningfully for both DX Solutions and ESS. Focused on the future, the company is strengthening its consulting approach and growing high-value business sectors. For FY2024, net sales forecasts were revised up to JPY 350 billion, with operating income and net income forecasts holding steady at JPY 24 billion and JPY 14 billion, respectively. The company plans to continue its 17-year trend of dividend growth.

What is Earnings Call?
Fundamental Scores

Profitability Score
Profitability Due Diligence

NEC Networks & System Integration Corp's profitability score is 51/100. The higher the profitability score, the more profitable the company is.

Positive Gross Profit
Positive Free Cash Flow
Positive 1-Year Revenue Growth
Positive 3-Year Average ROIC
51/100
Profitability
Score

NEC Networks & System Integration Corp's profitability score is 51/100. The higher the profitability score, the more profitable the company is.

Solvency Score
Solvency Due Diligence

NEC Networks & System Integration Corp's solvency score is 90/100. The higher the solvency score, the more solvent the company is.

90/100
Solvency
Score

NEC Networks & System Integration Corp's solvency score is 90/100. The higher the solvency score, the more solvent the company is.

Wall St
Price Targets

Price Targets Summary
NEC Networks & System Integration Corp

Wall Street analysts forecast NEC Networks & System Integration Corp stock price to drop over the next 12 months.

According to Wall Street analysts, the average 1-year price target for NEC Networks & System Integration Corp is 2 856 JPY with a low forecast of 2 727 JPY and a high forecast of 3 045 JPY.

Lowest
Price Target
2 727 JPY
18% Downside
Average
Price Target
2 856 JPY
14% Downside
Highest
Price Target
3 045 JPY
8% Downside
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Dividends

Dividend Yield
Lowest
Average
Highest
Dividend Per Share
N/A
Growth 3Y
Growth 5Y
Growth 10Y
Dividend Safety Score
Very
Unsafe
Unsafe
Safe
Very
Safe
0
25
50
75
100
Shareholder Yield

Current shareholder yield for NEC Networks & System Integration Corp is .

Shareholder yield represents the total return a company provides to its shareholders, calculated as the sum of dividend yield, buyback yield, and debt paydown yield. What is shareholder yield?

Shareholder Yield
Dividend Yield
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Buyback Yield
Lowest
Average
Highest
Debt Paydown Yield
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Highest

Profile

NEC Networks & System Integration Corp

Country

Japan

Industry

Technology

Market Cap

493.8B JPY

Dividend Yield

1.58%

Description

NEC Networks & System Integration Corp. engages in the provision of information and communications technology (ICT) services for enterprises, telecommunication carriers, and government agencies. The company is headquartered in Bunkyo-Ku, Tokyo-To and currently employs 7,537 full-time employees. The firm is also involved in the manufacture and sale of network communication equipment. The firm operates through three business segments. Company Network segment is engaged in the provision of ICT solutions related service integration to companies. Career Network segment is engaged in the provision of system integration (SI) service and installation service from ICT infrastructure to telecommunications carriers, as well as the provision of SI service and related operation and monitoring services. Society Infrastructure segment is engaged in the provision of service integration including SI services and installation work related to ICT infrastructure for government offices, local governments and public interest corporations, as well as related services such as operation and monitoring.

Contact

TOKYO-TO
Bunkyo-ku
Iidabashi First Tower, 2-6-1, Koraku
+81366997000.0
www.nesic.co.jp

IPO

1983-12-22

Employees

7 537

Officers

CEO & Chairman
Mr. Yushi Ushijima
President, COO & Representative Director
Mr. Michitaka Ono
Senior VP, CFO & Director
Mr. Junji Ashida
Associate Senior VP & CIO
Norihiko Fujioka
General Manager of Administration Division
Mr. Hiroki Fujii
Senior VP and Executive GM of Marketing & Sales Operations Unit
Tomio Iizuka
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Senior VP & Assistant Executive GM of Network Infrastructures - Business Unit
Mr. Yasuhiro Ito
Senior VP, Assistant Executive GM of Marketing & Sales Operations Unit
Yasushi Ishikawa
SVP and Exec GM of Environmental & Social Solutions Business Unit
Yuuichi Nishida
Chief Digital Officer, Senior VP, Executive GM of DX Solutions Business Unit & Director
Osamu Kikuchi
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What is the Intrinsic Value of one NEC Networks & System Integration Corp stock?

The intrinsic value of one NEC Networks & System Integration Corp stock under the Base Case scenario is 2 509.68 JPY.

Is NEC Networks & System Integration Corp stock undervalued or overvalued?

Compared to the current market price of 3 315 JPY, NEC Networks & System Integration Corp is Overvalued by 24%.

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