Internet Initiative Japan Inc. (3774:JP) (OTC: IIJIY) stock received a Buy rating from Citi on Monday, with a target price of 3,000.00 yen. Despite the recent performance setback, the new report highlights expansion potential following an active investment phase.
Citi’s assessment acknowledges execution risks associated with Internet Initiative Japan’s strategic growth in its systems integration (SI) business. These risks became apparent as the company’s results for the fiscal year ending March 2024 missed consensus estimates, causing the stock’s value to plummet.
Analysts at the company pointed to the gap between actual and estimated numbers compared to consensus as a factor in the recent stock price correction. Nonetheless, Citi remains optimistic about the company’s medium-term prospects, indicating that Internet Initiative Japan’s business lines are expected to grow following the current phase of upfront investment.
Citi’s high-risk rating reflects the challenges the company faces as it expands. The active expansion phase of SI’s business has been identified as a major source of risk that could impact the company’s performance.
While recent financial performance has fallen short of expectations, Citi’s stance signals confidence in Japan Internet Initiative’s ability to recover and expand its business, providing investors with medium-term investment opportunities. The target price of 3,000 yen demonstrates the optimistic forecast for the company’s future.
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