NEC Stock price
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
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👉 More detailed insights
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Invest better with AI
StocksGuide Unlimited – full access to AI analyses
👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
👉 Clear answers to your questions
Invest better with AI
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👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
👉 Clear answers to your questions
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = ¥6.46t | Revenue (TTM) = ¥3.69t
Market Cap = ¥6.46t | Estimated Revenue = ¥3.87t
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = ¥6.56t | Revenue (TTM) = ¥3.69t
Enterprise Value = ¥6.56t | Forward Revenue = ¥3.87t
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF) | ex SBC
📈 What is it?
EV/FCF compares a company’s enterprise value with its free cash flow. The metric therefore shows the multiple of current free cash flow at which a company is valued. EV/FCF ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted version.
🧮 How is it calculated?
EV/FCF ex SBC = Enterprise Value ÷ (Free Cash Flow (TTM) − SBC)
🏛️ Why is it important?
EV/FCF provides a valuation based on free cash flow and therefore complements earnings-based valuation metrics such as the P/E ratio. The ex SBC version additionally accounts for the economic impact of stock-based compensation and provides a more conservative view from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF means that enterprise value is low relative to current free cash flow. The reasons should always be considered in the context of the company and its industry.
- A high EV/FCF means that enterprise value is high relative to current free cash flow. This can, for example, reflect high growth expectations or temporarily weak cash generation.
- When SBC is positive and adjusted free cash flow remains positive, EV/FCF ex SBC is generally higher than the standard EV/FCF.
- The metric is particularly useful for companies with relatively stable and predictable cash flows.
- If free cash flow is negative or very low, EV/FCF has limited usefulness and should not be interpreted like a standard valuation multiple.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF) | ex SBC
📈 What is it?
Free cash flow shows how much cash remains after a company has covered its operating and capital expenditures. FCF ex SBC additionally deducts stock-based compensation (SBC) to adjust the cash flow for the effect of non-cash SBC.
🧮 How is it calculated?
Free Cash Flow ex SBC = Operating Cash Flow − SBC − Capital Expenditures (CAPEX)
🏛️ Why is it important?
FCF reflects a company’s actual financial strength – independent of reported accounting earnings. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction. FCF ex SBC also deducts stock-based compensation and shows how much cash generation remains after SBC.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow indicates that a company has strong financial strength – independent of reported earnings.
- It is often a solid basis for sustainable dividends and share buybacks.
- Declining FCF can be a warning sign, even if reported earnings remain stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net Margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free Cash Flow Margin | ex SBC
📈 What is it?
The Free Cash Flow Margin shows how much free cash flow a company generates relative to its revenue. In simplified terms, free cash flow is calculated as operating cash flow minus capital expenditures. The Free Cash Flow Margin ex SBC additionally accounts for stock-based compensation (SBC). While SBC does not represent a direct cash outflow, issuing shares as compensation can dilute existing shareholders. Therefore, SBC is deducted from free cash flow in this adjusted metric.
🧮 How is it calculated?
Free Cash Flow Margin ex SBC = (Free Cash Flow − SBC) ÷ Revenue × 100
🏛️ Why is it important?
The Free Cash Flow Margin shows how efficiently a company converts its revenue into free cash flow. Strong free cash flow can provide financial flexibility for dividends, share buybacks, debt repayment, or further investments. The ex SBC version additionally accounts for the economic impact of stock-based compensation and therefore provides a more conservative view of cash generation from a shareholder perspective.
🧮 Calculation
🎯 What does this mean for investors?
- A high Free Cash Flow Margin shows that a company converts a high proportion of its revenue into free cash flow.
- This can provide greater financial flexibility for dividends, share buybacks, debt repayment, or investments.
- The Free Cash Flow Margin ex SBC additionally accounts for potential shareholder dilution from stock-based compensation.
- The long-term trend is particularly important. Declining margins can, for example, result from higher investments, changes in working capital, or weaker operating performance.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Revenue per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
NEC Stock Analysis
Analyst Opinions
19 Analysts have issued a NEC forecast:
Analyst Opinions
19 Analysts have issued a NEC forecast:
NEC Events
Past Events
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DEC
2
Special Call - NEC Corporation
10 months ago
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NOV
12
Analyst/Investor Day - NEC Corporation
11 months ago
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StocksGuide Free
NEC — Special Call - NEC Corporation
1. Management Discussion
Good morning. I'm Nishihara, the CTO. Cutting-edge technology development driving NEC's growth and the expansion of new business domains. So together with myself, Mr. Yamada, the AI Technology Office, will present.
At the beginning, the impact of technology on society is expanding, which you are familiar with. With the AI industrial evolution progressing, AI is evolving from an automation tool into an autonomous actor in economic activities. There are also risks also the cyber space, new threats, fake information also. IT vendor, stable, secure AI provision is important. We need to have a robust infrastructure is important. So NEC security platform, we will be able to provide the social implementation of the AI security and platforms will be required. There are strong technologies at NEC. AI security platform is the area. AI, we start at the core, cotomi, large language model for the industrial. For security, we are able to -- for advanced expertise, we have the basic people and the platform technology network, IT systems and new things, we will be talking about optical computing as well.
We have prepared objective benchmarks. In AI, biometric authentication, video recognition, analysis response to AI, cumulative PCT international patent applications, we are #1. Also, we have been accepted as prestigious international conferences and Chinese and U.S. companies. For the last many years, we have been working with a number of papers, Japanese companies for the last 20 years. NEC is the only one ranking in these prestigious area. Earlier, in terms of personnel, CISSP, professional qualification, internationally 560 personnel, we have the top class domestically platform technology as well. We are submarine cable for the next level, technology, we already have the basic research on this. Also earlier, optical computing, the basic research, nature magazine quoted us on that. So that's the future area.
In any case, our strength, we will continue to provide and deploy as BlueStellar. We are implementing cutting-edge technology, both inside and outside the company. And then the knowledge gained, we would extract, analyze and standardize and promote the large scale to our customers broadly. Today, the BlueStellar, the cutting edge technologies contribution to existing business and creation our new growth business through BlueStellar.
So first, regarding BlueStellar, contributing to existing business through BlueStellar. Mr. Yamada will explain. So Mr. Yamada, please.
2. Question Answer
Good morning, everyone. NEC, I'm in charge of AI. My name is Yamada. Today, in terms of technology, how BlueStellar is being utilized from the AI business, I would like to explain.
First, the progress. NEC AI, we have individually, we don't have a specific disclose. This growth is amazing. NEC business also, we are growing with higher market growth, higher than market growth. So specifically, NEC, what are we doing is what we want to talk about/through BlueStellar, we contribute. Our AI technology is BlueStellar scenario, digital transformation, how can we provide to customer were based on scenario. It's going to be built in. That's how we provide the AI technology. We will provide through the AI agent, how we can transform business process is the perspective that we have for our technology. Also, supporting that is the AI platform technology. Why are we different from others? NEC is focusing our 2, how we can provide governance. The other customization, data pipeline to customization, how can we do that? These are the 3 points that I will be talking about with you.
So starting with the agent, transforming business processes. May, our CEO, Mr. Morita talking about the AI agent will be strengthened bespoke at that time. This is this diagram from that presentation. Agent is a big process automation, not just as a tool. This is how we can automate. We are releasing sequentially marketing, manufacturing, we will have each of those areas, including procurement. So marketing. In May, we announced already best move is the title. What we do, marketing, what kind of things do we need to do, AI can give suggestions. And when we implement what's the benefit we can do a simulation. Marketer can go back and forth and make the definition. It's already cutting over at customer side and 125% for advertising retail is the awareness rate that we have been able to achieve.
Also yesterday, we announced the procurement negotiation agent as part of supply chain management. This area already for the last 10 years, we have technologically developed and have the proof of concept. So starting this month, we will deliver to a customer using AI, procurement negotiations happen automatically, but took a few days, negotiating could be done in a matter of minutes. And then the provider and the supplier demand, supplier can get a benefit on a win-win situation. Also number three, [ sorry ] is in English, NEC document automation for proposal is supporting sales. Sales proposal documents to customer, how we can generate that. AI can create it for you. Using this material and communication should be done with the customer. What are the areas that need to be focused, we can make recommendations.
And today, there are 2 announcements to make. First, cotomi Act is the name of the project. This is a digital project general automation tool. Recently, there are various systems using browser as interface and provided in the form of service. By embedding the tools in the browser, how customers use tools, that is learned autonomously. And as the organizational tool, this can be automatically deployed and executed. We have demonstration to show you today. Another topic is Command Center Agent. That is the name we use. This is an emergency call work that we will support in various countries, Command Center receives all the emergency calls, but the customers are in the state of panic when they make the calls. So how can we appropriately extract the information and take quick action. That will be the key. So from incomplete conversation, the correct situation understanding is necessary. And actions using the resources will be suggested. That is the agent service. And this is supported by the platform technology.
I would like to talk about the governance issue and customization issue. First, on the governance issue, in what way can we use AI in a correct manner. There are various elements. So as a concept, we are providing end-to-end consulting service to be specific in what way should customers use AI and what other risks that need to be considered, and what kind of actions should be implemented and how that can be embedded in the organization. We will provide end-to-end consulting. Yesterday, we introduced 3 consulting menus. And at the same time, consulting alone is not sufficient by using cutting-edge technology, we need to protect them.
I prepared 2 concrete projects. One is to anonymize the sensitive information, how to protect in order to avoid information leakage through a network, what do we need to do? That is anonymization. Another is the concept of guard rail. In addition to global standard guardrails, we need guardrails that matches Japanese culture and matches the rules of organizations. And in AI service, Cotomi, we incorporate them, and this is operated on the customer side. Another topic is cybersecurity, AI agent itself will autonomously operate the system. How to protect this is a very important point. Usually in cyber security, entry is detected and actions are taken and recoveries are made. But in AI, we are improving this process. And also in SiOC, we maximize the use of NEC's intelligence, how to collect intelligence, how to customize and deliver to customers and also the results of the analysis, looking from the customers' management perspective, what are the impacts? We do the simulation and present them. That is the kind of service we provide.
Third point is customization. AI model, there are various developments, but so long as general model is used, it does not contribute to competitive strength of individual companies because peers also use the same. So the important point is the customization incorporate industry knowledge, the company's unique knowledge. That process is extremely important. We have track record of building LLM. So we have strength in customization. This is one example with Tohoku University. This is a medical ALM. And this customization service is the kind of service that we would like to continue to deliver to customers. We cannot achieve this by ourselves. We are working in collaboration with these companies. For example, we are collaborating with Cisco in the area of governance, with Google Cloud in the area of AI agent platforms, we are collaborating with Red Hat, the system-related AI model, we are collaborating in this area. So far was the explanation on the use of AI technology in the form of AI agent and what are the key technologies.
So security, new customization we would like to talk about -- Nishihara will talk about these 2 areas by using the keyword harness and capsid knowledge.
I would like to talk about the future. It's not a way far into the future. But this is something that can be commercialized in the next midterm plan period, how can we achieve such a speed in commercialization that I would like to cover as well. AI security and platform.
Let me start from AI. AI will continuously evolve. And how can we utilize and leverage the evolving AI. This is an easy example in Japan, how horses were utilized. Well, I would like to use this as a comparison. Horses until 5,000 BC, it was just a strong wild power in the prairie, but it was not contributing to human society. But then horse harness was developed. And thanks to the development of horse harness, they are now contributing to cultivating farmland and also other areas in the human society. Same applies to AI. This is a very intelligent tool. Horsepower is very strong. If you have a processor, you can copy. But different than humans, it's a different media. So [indiscernible], a leading authority in AI research says the interactions within a company that will be shut down and that its successor model will be deployed on another server through AI detection. It overwrote its own copy on to successor model. It was to deceive the operations to conceal the copy is a nightmare. AI ASI, once it's released and used them properly, there is a possibility that it may run out of control.
From this stage, kind of highness we should have. NEC has begun research and development of technologies for this, what we need. So allowing humans to inspect and supervise AI. One is transparency. Humans can understand AI's decision-making and intent, then plus AI's future actions. Also, in terms of verification based on human requirements, AI verifies its own decision and guarantees that they are grounded in facts. The other AI behaves in accordance with human ethics, social norms and organizational goals. They can look at the target of the company. They can put that into the priority. Last, controllability is most important so that humans hold the final control function. These 4 pillars, if we can have the technology available, there is a rapid spreading AI that will become usable in human society such as horses became usable within human society. This is something we have to do.
We have this specific for each phase. In generative AI, we prepared offerings. On the left-hand side, the blue are the products. It's Agentic AI era today, as Yamada-san said. So we are the AI Asian platforms. We have the platform. So all the necessary technologies are assembled. Next, ASI. We are preparing offerings aligned. So long as we have this, NEC want to introduce this and provide this to our customers. So we need to have a safe and secure situation, introducing this, giving competitiveness to companies. This should be looked at with data. One is the cyberspace digital data. This is what each company already possesses. They already have that. Manuals, the way they do things and then legal documents. Each company, the strength, there's other things. This is the non-explicit data on people and organization. Each individual organization people. This is culture, and this is the knowledge. This needs to connect to the AI model. Once it does, people can copy, which can become a power.
The third is real-world on-site data, endpoint with customer. Each company, oral data with new data generated daily basis. For instance, the digital data and cyber space. You need to have is raw data for AI. AI model based on the values, we call it knowledge. So even if you just have raw data, it doesn't mean anything. What fits is top data product. Quite a long time ago, we spun out this product using this. We have this business. If we have it outside, it's a very big size that is a big business for us. All these technology assets that we have, AI-ready necessary data extracting is very good. This is the knowledge basis inside knowledge. Then AI model can be created. This part becomes very important for us.
Next, the nonexclusive data area. 90% is nonexplicit. It's nonexplicit. So it's not available, not text and then is not obvious. So what are non-explicit? Middle, implicit means you can make it into text, but we have not done it. Same with yourselves, I'm sure. When you do things, when you make decision or when you make judgment, there are things you have to do. But you don't do it with any sense, you have some rules or grounds or -- but it's not put into text. Embodied, this is what the people can do with the way our [indiscernible] physical expertise. What is emotional and what they are thinking could be different. So that is the nonexplicit. This part also, we think we can put it into AI model. So we are preparing. As Mr. Yamada said, cotomi product was explained, there is a [ demulator ]. So please look at that. What you do office work, IT services, I'm sure you use it.
In terms of the expense reporting, there are many things that IT systems are utilized [indiscernible] browser. It's quite complicated and you need expertise. Not a manual, but it's automatically AI detects and does it for you. Then 1 week later, it's like you have a great secretary assisted. So this is also a nonexplicit. If you want a step further, what we're trying to do, the way we think, the rules you have yourself could be made nonexplicit. GPT, when you start talking and do things as you go along, the repeated conversation is building. How did you make that decision or the workflow is also used in decision-making. And this is a better way of thinking. It's like you're working to a subordinate. This is used as a workflow store, digitalized so you can copy it. This knowledge can be shared within the company. This is an R&D phase today. We can put it into our product very, very soon.
Next, real-world and on-site data. The real-world and on-site data, we have new data coming in every day. So in advance, you cannot learn it. So therefore, it's important to incrementally train AI with new data real time. This is R&D also. Also, the real world is diverse. So social infrastructure, office, retailing, important is the sensing, the information that sense, how could be safely put onto the network. After transfer to network and then to cloud and to in simulation technology, we have a lot of systems that we have experienced. All technologies are available that we can integrate. This is very useful as well. One example later in the demo, you can look at this as well. We have biometric authentication technology. This is the first of its kind. You don't have to stop by a stress free. So you can look at the retina both eyes all at one time. It's 6 kilos. So 3-meter from before, you can look at it.
So in terms of authentication, so 100 million people can be done with this. So these sorts of intensive, something that we have to do for the integration. These are things that can be do a walk through authentication. This is also implementable. AI industry, in terms of the competitiveness, cyber, we want to have the digital into the AI ready data knowledge is how we would extract. Without this, there's some point also right-hand side. In terms of the nonexplicit data on people and organization to be extracted. This is what we are doing with authentication by customer, NEC can provide the secure data that we receive and then cut it out. This combination, there could be a lot of competitiveness and acceleration of knowledge creation. [indiscernible], doctor, there is the knowledge creation cycle that he has mentioned. So the nonexplicit data can be automatically integrated for the next step. This is a direction that they want to evolve.
Next is on the security, IT system attack. For this, we have announced a product called SiOC, and that is demonstrated. So please have a look. AI agent, the attack to AI agent, this is done through partnerships on technology and using harness, the cognitive usage of the people or human perception. Let me talk about this topic. At WEF, the risk of this information has been listed as the highest short-term risk for 2 consecutive years at the time of disaster. And also at the election, this is considered as a very high risk. The checking of the generation of our content or understanding of the content and analysis of such, the tool to analyze was announced in August. As NEC has a patent is #1 in patenting on the image recognition, multimodal and digital technology is our strength. And those technologies are all included.
As the next step, so now there's our content. What is the intention of this content? The narrative intelligence is another area we are doing R&D. I have introduced on the topic of AI. The point is various industries will transform using AI. And at that time, system integrator and service relationship will change. AI services generate new data and NEC understands fully the AI and convert them to new services and develop new service. And then another new data is generated. So it's not completely opening the integration, but we will circulate this cycle. And for our customers by customer, we leverage advanced trends as well. That is also an important point.
On the platform technologies, I would like to cover this topic as well. Right now, the traffic is growing by 40% annually due to AI, we will need bigger traffic in the future. And you see it's one of the top 3 companies, and we succeeded for the first time in the world in the multicore transmission system, 12 core is possible. So we can increase the bandwidth nearly 12x and this was successful. And next is the repeater. If it is -- so it has to be reduced in size, and we also succeeded optical sign processing, that is a very difficult technology. We have been working on LSI, but we succeeded in the use of GPU and do this in software. So the speed is fast and cost is low. So towards next phase, the submarine cable or technology is already ready.
Another is the quantum cryptography. The -- theoretically, it is considered impossible to crack, but NEC has been tackling this. We announced in July that we realized this on optical fiber. When there's a usual signals being transmitted in the same table, the optical transmission is also possible. And there's also Ethernet cable and there's a B2C, which is also secure. So that system is also provided. The optical technology, digital computing, AI content demand, what will become necessary, that is electric power. The power plant is to be placed at the location of data center and neural network and the matrix vector, we succeeded in doing this using optical technology and energy cost will be improved. And in there is a benchmark, the publication called Nature 4 are adopted by nature. And this is unprecedented in this industry for registration. This is quite significant.
My message is that R&D and product, how can we link them quickly? That is the important point. As Yamada-san explained, various technologies were developed through R&D center. R&D and business unit collaboration is very strong internally. So now after 3 months of developing technology under R&D, we can commercialize. In the past, it took 1 to 2 years. Of course, it depends on the area, but AI and security is our strength and also the speed will become NEC's strength.
On the growth business, let me introduce. This is the last topic on the intellectual property in the current midterm fund until FY '25 as intellectual property business are licensed, we have the several JPY 10 billion profit. And there are competitors but partners and we are to receive the license. But we also own licenses like design and other intellectual property. And by combining them, we are to create a new license. This is called the technology license. We have strength in technology, but deployment and mass production can be done by partner. And then expand globally. We already have success cases. So we intend to double through these measures. This is AI drug development businesses. Left-hand side is personalized cancer vaccine. This is in the clinical trial phase. We achieved extension of median recurrence-free status from 24 months to 30 months. We collaborate with the company called Transgene. And thanks to this, they succeeded in a capital increase. So the design technology of the vaccine, thanks to that, the valuation was raised.
And also the basic research, we are collaborating with Taiho Pharmaceutical to develop shared cancer vaccine. We are analyzing whole genome to identify common cancer antigen candidates. Next, this is the advanced technology consulting services that we started from last year. The NEC's R&D staff will join the project on a hands-on basis and then add AI technology in the downstream as well, we provide DX strategy consultant and data scientists. So with this whole package, we provide solution to customers. With Sumitomo Rubber, we made an announcement the other day. And we will provide this expertise to other players within the same industry as well as other industries in the AI industrial revolution era, NEC will lead the creation of social value. Thank you very much.
NEC — Analyst/Investor Day - NEC Corporation
1. Management Discussion
Thank you very much for joining us today. I would like to explain about the progress of BluStellar business. This is the agenda.
Now I would like to explain about the current status and the future of BluStellar and then invite two leaders for the following presentation, Kimura will explain about the growth strategy for BluStellar scenario, and Yamada will talk about the growth strategy for ABeam Consulting.
Now let me explain about the current status and the future of BluStellar. First, I would like to talk about the positioning of the BluStellar. Last year, May, we have announced BluStellar as a DX brand. And as I mentioned at the time, I mentioned that BluStellar is a key driver for our company-wide MTP.
NEC's core business or IT service and social infrastructure, BluStellar will support in all of our company's operations. BluStellar can be described as a culmination of NEC's DX initiatives. Since 2019, we have been driving transformation along three key access: business model, technology and organization and talent.
In the initial phase, we focused on process and the framework development and established a dedicated DX organization. We also launched an internal strategy consulting team, enabling us to establish an end-to-end process that collects strategy, delivery and operations. We also promoted standardization and unification through offerings, which has led to improved gross profit and higher profitability.
By consolidating approximately 10,000 DX product close into 500 categorized product groups, we achieved greater visibility and efficiency management. And in addition, we have developed a comprehensive talent development program and our DX talent pool now numbers, 12,000, and know-how cultivated through this initiative is being utilized by more than 540 client companies through the BluStellar Academy.
Since 2021 in the strengthening phase, we have integrated all DX functions across the company. Consolidating six separate organizations into one cross functional structure of over 30,000 members. Building upon this history of transformation, we have branded BluStellar as a value creation model that leads our customers towards the future.
The business model of BluStellar lies in the BluStellar scenario. As shown on the slide, BluStellar scenario is a framework that starts from our customers' management challenges, systematically organizing our co-creation cases with the clients. And NEC's on practical experience as Client Zero, the structured asset leveraging cutting-edge technologies from NEC's lab.
It consists of approximately 500 products and services about 150 sets of offerings and 30 sets of BluStellar scenarios. By extracting success and failure factors from real cases and optimizing and standardizing our offerings and approaches, we are able to deliver value to customers more safely, reliably and rapidly.
Up until last fiscal year, we communicated our approach at IR like today through two pillars, BluStellar offerings and consultium-led business. From this fiscal year, we are updating these for the next midterm management plan by focusing on two areas, more clearly, scenario offering and product and services, BluStellar offering and AB as a consulting light business. Both approaches aim to drive our customers' transformation starting from the management agendas.
The scenario offering and product and service will deliver solutions to management challenges by combining cutting-edge technologies such as AI and on practical knowledge. Meanwhile, AB, as an independent consulting firm has strong expertise in business consulting. Through the synergy between technology and business consulting, we will continue to realize transformation for our customers.
And here is a summary of the overall BluStellar business. As a whole, the BluStellar business has already achieved the fiscal year 2025 midterm plan target 1 year ahead of schedule. Since the beginning of this fiscal year, we have been steadily progressing towards the revised FY 2025 target of JPY 624 billion, which was raised from last year's midterm plan. Looking ahead, we are steadily advancing along the road map towards a long-term goal of JPY 1 trillion in revenue and 20% operating profit.
Over the last 6 years, we have driven transformation along the access of business model, technology and organization and talent. Looking ahead to the next midterm management plan, BluStellar, will serve as a further growth engine for the entire NEC growth.
Following the presentation are two leaders, Mr. Kimura, and Mr. Yamada will present the specific initiatives. We hope you will gain a clear understanding of both the direction we are aiming for and the measures we are implementing.
Next, is about the presentation on the growth scenario using the BluStellar as a core. Hello. My name is Kimura. I am in charge of the Digital Platform Service business unit. Following the presentation by Yoshizaki, I will now explain our growth strategy centered on the BluStellar scenario.
And this is today's agenda. First, I will explain the strategic framework and the key themes for BluStellar. NEC will focus on the following three points as part of its growth strategy for BluStellar. The first is penetration and expansion of BluStellar scenario. And the second is AI security-driven competitive advantage. Number three is the market expansion strategy. Since 2019, NEC has been continuing its DX transformation efforts in business models, technology, organization and human resources, and we would like to move forward by leveraging these efforts as the BluStellar platform.
The BluStellar seller business model was already explained by Yoshizaki. Our product and service is based on the NEC past asset, and our effort is to digitize, especially AI security, cloud, network managed service are the main product.
Regarding these standardized offerings, so we will expand them by addressing the new customer challenges and adapting to emerging technologies, while also implementing replacement through portfolio management. We will also strengthen the expand our scenarios for each industry by utilizing feedback from our existing clients and expanding our client base.
Now, let me explain about the BluStellar quantitative target and the plan. FY 2025, excluding ABeam Consulting as BluStellar business, we are expecting to hit JPY 457 billion of revenue, of which scenario offering represents JPY 150 billion. Future target will be -- will be JPY 700 billion of revenue, OP margin of 20%. As a growth driver, on top of the high-margin scenario, we would like to shift toward a high-margin scenario offering so that we can further improve OP margin.
Next is about the further penetration and expansion of scenario. Looking at the domestic IT market as a whole, the DX market, in particular, is expected to grow by a CAGR of 14%. In particular, we are seeing the sophistication of cyber attack and we are seeing more use of the data utilization. So the major management agenda is to further utilize cybersecurity, AI strategically.
NEC strengths in AI and security are combined to achieve modernization. We provide scenarios that can be used across industries in areas such as data management and also provide industry-specific scenarios. Through this, we hope to achieve growth at BluStellar that exceeds the market growth rate.
Next, let me explain about the value of our scenario. We take a standardized scenario, and we take consulting perspective and offer them in a speedy manner. So we would like to offer various benefits in terms of reliability, value and speed to our customers. Specifically, the proven track record ensures high reliability peace of mind. Pricing aligned with delivered value offers a strong return on investment and speedy solution to the management agenda. So the scenarios we have presented so far are currently offered as 30 steps. Covering both cross-industry and industry-specific scenarios. Later, I will introduce three example scenarios highlighted here.
Next, I will explain our competitive advantage through AI and security. NEC strength lies in its overwhelming technological capabilities and track record in the field of AI and security. In AI domain, our biometric authentication technology ranked world #1 in this benchmark test. And in the field of security, CISSP, we have over 560 employees who are certified, and we are offering a very advanced and reliable services.
For instance, in the case of leveraging the Client Zero alert pit and leveraging AI, we are reducing the reporting generation and lead time by 96.7%, contributing to the streamlining of the process -- business process. And with that, will be able to contribute to our customers and give them the sense of assurance with the consistent quality and making a better proposal to the customers.
And next, I would like to explain how we plan to deploy and expand these scenarios. First, to enhance the value delivered to our customers, as mentioned earlier, we will execute horizontal deployment and linkage to scenarios. We will then evaluate and analyze the feedback obtained through scenario deployment and manage the scenario portfolio to enable selection and concentration in high-value scenarios.
Furthermore, by capturing customer feedback through operations and maintenance, as well as changes in the market and management challenges, we will continuously improve the scenarios. By running this cycle of improvement and expansion, we aim to strengthen the scenarios and increase their value.
And now we will introduce three examples based on these scenarios. In the slides that follow, the left-hand side shows the customer challenges and the scenario is applied to address them. And on the right, the resulting value delivered to the customer.
First, let me introduce an example in the AI domain. One food manufacture aimed to enhance promotion effectiveness across multiple channels. That faced challenges in the speed of planning and execution initiatives and effective leverage and promotional challenges. Now by applying BluStellar's AI scenario, and combine them with our Gen AI technology with purchase trend analysis data, we were able to generate ideas, such as target customer segments and catch phrases or taglines that would be difficult for humans to conceive, enabling approaches to customer segments that were previously challenging.
For video promotions, we had achieved a 125% increase in views on social media compared to the previous campaign, significantly contributing to sales expansion for them. As such, NEC's unique AI technology and data utilization enable faster marketing activities and improved effectiveness.
Second, I will introduce an example in the network and security domain. One manufacturing company made business expansion on restructuring. Faced a proliferation of system, leading to complex operations and increased system cost. Additionally, different sales and security measures across overseas group companies post management risk. NEC had to address security challenges starting from the management agenda, formulating a security strategy within the security scenario and applied a network scenario to build a network infrastructure, while establishing a global security incident response system.
As a result, the optimized network infrastructure overall enabled operational efficiency system efficiency and system cost optimization and strengthen security governance. Thereby reducing the management risks. In this way, NEC possesses extensive assets and applicable offerings for cybersecurity and network. And we receive consultations from many customers.
The third example is in the area of modernization. One financial institution customer aim to implement DX strategy, including customer experience transformation and process reform. That faces challenges in system architecture and specific -- specifying their plans. In addition, fragmented and lost data, made data aggregation and analysis time-consuming and labor-intensive.
NEC provided architecture consulting based on use cases and data volume, optimizing cost and flexibility and build a data utilization platform, which reduced the data preparation effort required for decision-making and enabled faster decision-making also. So this modernization scenario for financial institutions has been horizontally deployed and is already being offered to multiple customers.
Finally, let me share our market expansion strategy. We consider it critical to determine how to deploy BluStellar into the market as introduced so far. Bringing example, in the enterprise and public sectors, we aim to expand both customer share and market share. Expanding customer share, also known as wallet share expansion involves the increase of NEC's promotion -- proportion of IT investment by top customers find by NEC, including those we have previously engaged with directly in both the enterprise and public sectors, we define clear targets.
In the enterprise customer starting from Client Zero and using the upstream consulting approach we applied various scenarios introducing earlier to deliver value to customers. In public domain, we use scenarios specialized for the public market and approach social issues in coordination with policy, thereby acquiring strategic project.
To expand market share in the enterprise sector, we plan to deploy BluStellar to customer through partners building a new partner model beyond traditional product sales in collaboration with NEC Group companies and partners and spreading success cases and insight from large enterprises, fear scenarios and offerings.
In the public sector, we will focus on offerings for small- and medium-sized municipalities deploying them through an area-based approach. Through these initiatives, we aim to increase the BluStellar ratio in revenue and profit across each business unit, thereby expanding the customers' top line and profit margins.
And that is all for my presentation. Thank you for your attention. Now ABeam growth strategy will be presented by Yamada.
Yes, let me introduce ABeam Consulting's growth strategy. But before that, I would like to talk about the market environment and also the competitive advantage of ABeam Consulting. The business environment surrounding companies have been dynamically changing, as you know, reconstruction of global supply chain and use of AI, cloud and other technology, climate change, sustainability agenda, lowering birth rate, war for talent, change in the consumers' mindset.
We are seeing enhanced diversity and less transparency uncertainties. Customers and clients needs to deal with these diverse issues and they need to pursue the transformation of itself to further brush up their competitive advantage. This is a following for consulting industry, especially strategic consulting market is dramatically growing.
Due to the emergence of digital technology, solution consulting, outsourcing, these businesses have been trending and growing quite strongly. At our company, we work with Japanese global companies. Japanese companies doing the business in Asia. And also, we are supporting international clients who are globalizing and growing their business. We are responding to the transformation needs of the client, and we respond to the diversified nature of the market, and we are committed to the support of the customers' transformation.
We have three major competitive advantage. Number one, client first, people first. So we prioritize on customers and people. We support industry. We support society and we center around the client agenda. We co-create value. The process of the transformation offers opportunity for people to grow and create a social economic impact. Together with the client, we developed a next-generation talent pool. That is the ideal state for us. From the strategy development to the implementation of the technology, we're always running by the customer. We support everyone's development in the growth. This is the source of our sustainable growth, and this is the source of the competitive advantage.
Number two is the competitive advantage in the area of technology. AI-enabled intelligent is put at the core. and we are generating new knowledge by using AI. And we formulate a strategic idea, implement transformation and we also create new value, especially we have particular strengths in technology implementation. We use technology as a source of the business transformation, intelligence implementation capability, transformation capability are our strengths.
Finally, we are headquartered in Japan, yet we are a global consulting firm. We belong to NEC Group, but we always stay neutral to the business management. We offer optimal solution to the customers and make a quick flexible decision. At the same time, we made maximum use of the group-wide asset against the Japanese global company's management agenda, we listen to the management input. And then, we transplant that to the actual action happening in the field. So we offer a well-balanced proposal and promote the transformation.
Now based on such competitive advantage, how are we envisioning our future growth? And let me explain about the outline of our growth strategy. At our company, we have set forth three pillars. Number one is maximization of customer value. From strategy to the actual execution, we offer end-to-end solution. We work with a client as a partner to create value. And we respond to various transformation needs. Strategy solution, outsourcing are all combined together into our integrated service offering. With that, together with our customers and the partners, we will be able to continuously generate the new value and the outcome. And not just a one-shot transformation outcome, we are supporting the sustainable growth.
Next, I would like to talk about the expansion of transformation capabilities for the Japanese global enterprises. It will be more important for creation of the value chain and the structure reform across the enterprises and making the standardization of the global group. And in order to realize this transformation, the Asia, the Europe and U.S. mainly, and the global capability for the transformation in dispensable.
Currently, we are working on the India digital talent development -- talent development, as well as the cutting-edge technology insights used the global capability center and we are enhancing on the organization and the scheme to commit the outcome supporting the transformation seamlessly all across the domain. And in order for us to enable our customers to have both the social value and economic value and challenging into realizing the transformation of the new business models.
At the same time, as consolidating the business strategy and the talent portfolio optimized and through the development of those talents we are enhancing the human-based management. And we are establishing the mechanism for the sustainable growth for quantifying the corporate culture. And based on these three pillars based on the customer transformation and innovation, we are going to support and continue to support the growth of the customer and talent.
And now I would like to specifically explain about the growth plan. On the left, you see our plan this year and for the future growth. We are targeting at the revenue of JPY 300 billion and the operating profit of 20%. When it comes to the revenue improvement, we are promoting the strategic area of the vertical account selection and three measures specifically.
First, is the revenue growth. we are going to have a cross coordination of the customer agenda and solution output and integrated service offering. And with that, we are going to improve the proposal capability and we'll be able to create the high-value-added deal opportunity to increase the orders.
And the second, is the concurrent realization of the revenue growth and the revenue improvement not to be fixated on the human model conventionally. We are going to focus more on the new revenue model based on the outcome starting from the starting of the business. At the same time as building a platform that is common throughout the industry, we are going to multiply product and service, and we will be able to have a reproducible revenue model. And already in power railroad and real estate lease industry, we have the track record, and we are going to expand to the global manufacturing industry.
Third is about the revenue improvement. Leveraging AI, we will use the platform to transform the delivery model. We are going to have an advanced expertise globally and by the region, efficiently leveraging the global capability center. And as such, we are going to offer value to the customers and the productivity taking scalability at the same time and improve their revenue. And with these three pillars in the business, we are going to have both the expansion of the business portfolio, as well as a sustainable revenue increase and add value to the customer proposal.
From here on, I would like to talk about the -- our strategic sales strategy. First is to improve our value for the customer proposal. More specifically, we are going to start with the customer agenda, but moreover, specifically, we are going to -- based on the agenda of the industry management, we are going to create the transformation theme and transformation scenario based the strategic solution, and then implement the outsourcing businesses services and transformation.
As such, we will be able to create the structural reform and business innovation to enable the sustainable value creation. Recently, globally, the management environment has been changing quickly and the use of digital technology and the expectations for the transformation has increased use of Gen AI and agent financial data will be used and redesign the business model and will directly lead to the business value, and that is expanding.
And on the other hand, we need to enhance on the governance and security and modernization of the management platform. And with such background, we will deal with the CxO agenda, strategy, consulting and the business process. And in other words, we will drive the transformation based on the BPX and outsourcing enhanced and try to expand on the value for the customers.
Furthermore, with the collaboration with the partner, NEC, we will be able to strategically focus on the both intelligence asset services and the support scheme that we are going to build.
For instance, the insight and economic security in the age of the risk increase and with the advancement of the cloud and other technologies, we are going to have the global governance and the management and enhancement, IT architecture modernization and ABeam will be able to drive the strategic idea planning and BluStellar of NEC, we are going to collaborate and we'll be able to transform the scheme itself, all of the services for the customers. And with the partnership with NEC Group, we'll be able to differentiate the solutions and contribute to the value improvement for the entire enterprise.
And finally, I would like to introduce our global transformation realization cases. Today, with bailing points and optimum solution, we are currently working on the global consulting scheme establishment, including them, we have the total of 20,000 professionals globally. And each market in the front line of the customers in each region, we are working on the transformation starting from the customer agenda.
In Malaysia and Vietnam, we have the capability centers and leveraging the uniqueness of the regions of the languages, we will be able to offer the regional local talent and technologies. In India in collaboration with Optimum Solution, we had established a global capability center focusing on AI, digital technology, cybersecurity, we have an overwhelming digital competitiveness. So the local -- the Japanese global companies will be able to transform their business as an intelligent COE.
And this global network we'll be able to connect seamlessly the intelligence, digital talent and be able to maximize the capability, transform and the value of the customers. In each market and countries will be aligned to the uniqueness of the region, and we'll be able to support the global management at the same time being local. And we have a competitive capability, as well as the execution capability and the flexibility with such strength at ABeam, we have real-world executable transformation with the global size. And as such, we would like to contribute to the social as well as the economic value improvement for our customers.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]
Financial data from NEC
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 3,686,849 3,686,849 |
7%
7%
100%
|
|
| - Direct Costs | 2,453,378 2,453,378 |
4%
4%
67%
|
|
| Gross Profit | 1,233,471 1,233,471 |
14%
14%
33%
|
|
| - Selling and Administrative Expenses | 830,233 830,233 |
7%
7%
23%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 539,758 539,758 |
22%
22%
15%
|
|
| - Depreciation and Amortization | 156,464 156,464 |
1%
1%
4%
|
|
| EBIT (Operating Income) EBIT | 383,294 383,294 |
33%
33%
10%
|
|
| Net Profit | 300,616 300,616 |
50%
50%
8%
|
|
In millions JPY.
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Company Profile
NEC Corp. engages in the provision of systems, components, services, and integrated solutions for computing and communications applications. It operates through the following segments: Public Business, Enterprise Business, Telecom Carrier Business, System Platform Business, and Others. The Public Business segment provides system integration (system architecture and consulting), support (maintenance), outsourcing and cloud services, and system equipment for public, medical and financial institutions. The Enterprise Business segment offers information technology solutions for manufacturing, retail, and services. The Telecom Carrier Business segment supplies equipment to telecom carriers for network implementation, along with network control platform systems and operating services. The System Platform Business deals with products from business such as from terminals to network and computer equipment, software products, and service platforms. The Others segment includes smart energy solutions, mobile phones, and lighting equipment businesses. The company was founded by Kunihiko Iwadare on July 17, 1899 and is headquartered in Tokyo, Japan.
StocksGuide Premium
| Head office | Japan |
| CEO | Mr. Morita |
| Employees | 104,194 |
| Founded | 1899 |
| Website | jpn.nec.com |


