Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> s share price has been down 65% YTD as the company’s aggressive investment on HR and system reinforcement led to fall in margins which concerned the market.</li>
<li>However, the company has adopted several measures to improve its margins, and we expect the investment in HR and others to generate results going forward.</li>
<li>Though share price has moved up slightly, valuation multiples are at a steep discount, and we would look for building a position.</li>
</ul>



Shift Inc (3697 JP) s share price has been down 65% YTD as the company’s aggressive investment on HR and system reinforcement led to fall in margins which concerned the market.
However, the company has adopted several measures to improve its margins, and we expect the investment in HR and others to generate results going forward.
Though share price has moved up slightly, valuation multiples are at a steep discount, and we would look for building a position.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> reported 4Q and full-year FY08/2023 results today. 4Q revenue increased 38.2% YoY while OP more than doubled during the quarter. Both revenue and OP beat consensus estimates.</li>
<li>Full-Year revenues and OP increased 35.7% and 67.4% respectively beating consensus estimates by 1.2% and 67.4% respectively. Both revenue and OP were above the company's own guidance.</li>
<li>Shift’s share price has dropped by about 17% since August as market became concerned over the growth prospects, however, share price has started to move up.</li>
</ul>



Shift Inc (3697 JP) reported 4Q and full-year FY08/2023 results today. 4Q revenue increased 38.2% YoY while OP more than doubled during the quarter. Both revenue and OP beat consensus estimates.
Full-Year revenues and OP increased 35.7% and 67.4% respectively beating consensus estimates by 1.2% and 67.4% respectively. Both revenue and OP were above the company's own guidance.
Shift’s share price has dropped by about 17% since August as market became concerned over the growth prospects, however, share price has started to move up.


High Conviction Shift: Another Upbeat Quarter; Wipes Off Concerns Over an Earnings Slowdown

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> ’s share price has been down more than 50% YTD with the release of 1QFY08/2024 results in January 2024 which saw a drop in margins.</li>
<li>The company’s aggressive investment in HR and system reinforcement led to a decline in margins, however, margins saw a QoQ improvement in 2QFY08/2024.</li>
<li>Despite there being an improvement in 2Q and the company expecting the margins to bounce back in 4Q, Shift’s share price has continued to fall.</li>
</ul>



Shift Inc (3697 JP) ’s share price has been down more than 50% YTD with the release of 1QFY08/2024 results in January 2024 which saw a drop in margins.
The company’s aggressive investment in HR and system reinforcement led to a decline in margins, however, margins saw a QoQ improvement in 2QFY08/2024.
Despite there being an improvement in 2Q and the company expecting the margins to bounce back in 4Q, Shift’s share price has continued to fall.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> reported 1QFY08/2024 results last week. Revenue and OP increased 29.5% and 0.4% YoY to ¥25.1bn and ¥1.8bn respectively.</li>
<li>Both revenue and OP were below consensus estimates which triggered a more than 25% drop in Shift’s share price over the last 5 days.</li>
<li>We think the weaknesses in the company’s 1Q earnings were temporary and we expect the company’s earnings to show recovery going forward</li>
</ul>



Shift Inc (3697 JP) reported 1QFY08/2024 results last week. Revenue and OP increased 29.5% and 0.4% YoY to ¥25.1bn and ¥1.8bn respectively.
Both revenue and OP were below consensus estimates which triggered a more than 25% drop in Shift’s share price over the last 5 days.
We think the weaknesses in the company’s 1Q earnings were temporary and we expect the company’s earnings to show recovery going forward


Shift: Market Overreacts to Temporary Dip in Earnings

<ul>
<li>Our conviction long <a href="https://www.smartkarma.com/entities/shift-inc" target="_blank" data-smartkarma-citation="entities:7266:1" rel="noopener">Shift Inc (3697 JP)</a> 's share price went up by more than 50% in 2023 driven by strong growth in top line alongside further improvement in margins.</li>
<li>The company’s margins fell in 2022 due to unprofitable projects, however, as these projects came to an end and the company being careful with projects, margins began to recover.</li>
<li>Shift’s share price has declined over the last few days which we think is temporary and offers an  opportunity to make an entry.  </li>
</ul>


Our conviction long Shift Inc (3697 JP) 's share price went up by more than 50% in 2023 driven by strong growth in top line alongside further improvement in margins.
The company’s margins fell in 2022 due to unprofitable projects, however, as these projects came to an end and the company being careful with projects, margins began to recover.
Shift’s share price has declined over the last few days which we think is temporary and offers an  opportunity to make an entry.  


Japan

SHIFT Inc. offers information technology outsourcing services. The Company provides outsourcing software testing services to corporations and individual clients. SHIFT also provides software solutions and consulting services, as well as educational classes and programs.

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Shift Inc (3697 JP)

Shift: Is It a Good Time to Buy?

Shift shares down 65% YTD as investment in aggressive hiring and system reinforcement dragged down margins. Measures are in place to revive...

Shifara Samsudeen, ACMA, CGMA

High Conviction Shift: Another Upbeat Quarter; Wipes Off Concerns Over an Earnings Slowdown

Shift reported strong 4Q results which beat estimates. Share price has dropped since August due to concerns over earnings growth, however, recent...

Shifara Samsudeen, ACMA, CGMA

Shift: On a Road to Recovery

Shift's share price has been down more than 50% YTD due to a drop in the company's margins in 1QFY08/2024. There has been a notable improvement in...

Shifara Samsudeen, ACMA, CGMA

Shift: Market Overreacts to Temporary Dip in Earnings

Shift's 1QFY08/2024 revenues and operating profit fell below consensus which triggered a more than 25% drop in the company's share price over the...

Shifara Samsudeen, ACMA, CGMA

Shift: High Conviction Review 2023

Our conviction LONG Shift's share price surged over 50% in 2023. As we expected, completion of unprofitable projects and expansion into upstream...

Shifara Samsudeen, ACMA, CGMA

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52-week Range

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Shift: Is It a Good Time to Buy?

​Shift shares down 65% YTD as investment in aggressive hiring and system reinforcement dragged down margins. Measures are in place to revive...

Shifara Samsudeen, ACMA, CGMA

High Conviction Shift: Another Upbeat Quarter; Wipes Off Concerns Over an Earnings Slowdown

​Shift reported strong 4Q results which beat estimates. Share price has dropped since August due to concerns over earnings growth, however, recent...

Shifara Samsudeen, ACMA, CGMA

Shift: On a Road to Recovery

​Shift's share price has been down more than 50% YTD due to a drop in the company's margins in 1QFY08/2024. There has been a notable improvement in...

Shifara Samsudeen, ACMA, CGMA

Shift: Market Overreacts to Temporary Dip in Earnings

​Shift's 1QFY08/2024 revenues and operating profit fell below consensus which triggered a more than 25% drop in the company's share price over the...

Shifara Samsudeen, ACMA, CGMA

Shift: High Conviction Review 2023

Our conviction LONG ​Shift's share price surged over 50% in 2023. As we expected, completion of unprofitable projects and expansion into upstream...

Shifara Samsudeen, ACMA, CGMA

Shift shares down 65% YTD as investment in aggressive hiring and system reinforcement dragged down margins. Measures are in place to revive...

Shift reported strong 4Q results which beat estimates. Share price has dropped since August due to concerns over earnings growth, however, recent...

Shift's share price has been down more than 50% YTD due to a drop in the company's margins in 1QFY08/2024. There has been a notable improvement in...

Shift's 1QFY08/2024 revenues and operating profit fell below consensus which triggered a more than 25% drop in the company's share price over the...

Our conviction LONG Shift's share price surged over 50% in 2023. As we expected, completion of unprofitable projects and expansion into upstream...