Earlyworks Co., Ltd. Sponsored ADR (ELWS) AI Stock Analysis

• Market Cap: $11.52M
• Dividend Yield: N/A
• Average Volume (3M): 1.22M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.12
• Revenue Growth: 136.36%
• EPS Growth: 28.66%
• Country: US
• Employees: 15
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.57
• Shares Outstanding: 3,015,380
• 10 Day Avg. Volume: 3,315,928
• 30 Day Avg. Volume: 1,220,972
• PEG Ratio: 0.58
• Price to Book (P/B): 5.52
• Price to Sales (P/S): 10.18
• P/FCF Ratio: -4.63
• Enterprise Value/Market Cap: 0.53
• Enterprise Value/Revenue: 0.03
• Enterprise Value/Gross Profit: 0.04
• Enterprise Value/Ebitda: -0.02
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 44 Neutral
• Price Target: $3.50 ▼(-10.26% Downside)

The overall stock score is primarily impacted by financial performance, which is weak due to profitability and cash flow issues despite strong revenue growth. Technical analysis provides a moderate boost with positive short-term trends, but valuation concerns due to negative earnings and lack of dividends weigh heavily on the score.

Earlyworks Co., Ltd. Sponsored ADR Business Overview & Revenue Model

Company Description

Earlyworks Co., Ltd. Sponsored ADR (ELWS) is a company focused on the development and commercialization of innovative educational technologies and learning solutions. Operating primarily in the EdTech sector, Earlyworks aims to enhance early childhood education through digital platforms that foster interactive learning experiences. The company's core products include educational software and mobile applications designed for young learners, as well as tools and resources for educators to facilitate and track student progress.

How the Company Makes Money

Earlyworks generates revenue through a multi-faceted business model that includes subscription fees for its software and applications, licensing agreements with educational institutions, and partnerships with content providers. The primary revenue stream comes from subscriptions, where schools and parents pay for access to the platform's educational resources and tools. Additionally, Earlyworks benefits from strategic partnerships with educational organizations and technology companies, enabling them to expand their reach and enhance their product offerings. These collaborations often lead to co-branded products or bundled services, contributing further to the company's earnings.

Earlyworks Co., Ltd. Sponsored ADR Financial Statement Overview

Summary

Earlyworks Co., Ltd. shows strong revenue growth, but profitability and cash flow issues persist. The company faces high leverage and negative returns on equity, which could impact financial stability. While revenue growth is promising, the company needs to address operational inefficiencies and improve cash flow management to enhance financial health.

Income Statement

The company has experienced significant revenue growth, particularly in the most recent year with a 136.37% increase. However, profitability remains a concern with consistently negative net profit margins and EBIT margins, indicating ongoing operational challenges. The gross profit margin has decreased over time, suggesting rising costs or pricing pressures.

Balance Sheet

The debt-to-equity ratio has increased, indicating a rising leverage which could pose financial risks. The return on equity is negative, reflecting the company's inability to generate profits from shareholders' equity. However, the equity ratio remains relatively stable, suggesting some level of balance in asset financing.

Cash Flow

The company is facing challenges with negative operating and free cash flows, which have worsened over time. The free cash flow to net income ratio is positive, indicating that cash flow is somewhat aligned with accounting profits, but the overall cash flow situation remains concerning due to negative growth rates.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	186.30M	440.36M	46.57M	179.36M	463.72M	216.21M
Gross Profit	135.46M	227.10M	16.07M	141.77M	355.34M	182.67M
EBITDA	-347.11M	-252.97M	-388.05M	-333.67M	-571.96M	-84.62M
Net Income	-474.19M	-256.70M	-382.31M	-336.15M	-602.47M	-70.52M
Balance Sheet
Total Assets	575.57M	190.50M	453.04M	575.57M	752.05M	437.23M
Cash, Cash Equivalents and Short-Term Investments	437.91M	104.38M	177.89M	437.91M	657.42M	364.26M
Total Debt	179.27M	51.84M	195.54M	179.27M	69.79M	74.73M
Total Liabilities	244.84M	116.47M	244.52M	244.84M	161.23M	114.07M
Stockholders Equity	330.72M	74.03M	208.51M	330.72M	590.82M	323.16M
Cash Flow
Free Cash Flow	-404.32M	-223.97M	-401.36M	-394.20M	99.28M	33.91M
Operating Cash Flow	-403.98M	-191.73M	-399.74M	-393.86M	100.27M	34.52M
Investing Cash Flow	-103.70M	87.76M	-1.63M	-100.34M	3.76M	-611.15K
Financing Cash Flow	651.82M	-119.31M	-78.41M	644.85M	189.13M	91.52M

Earlyworks Co., Ltd. Sponsored ADR Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ELWS, the sentiment is Neutral. The current price of 3.9 is below the 20-day moving average (MA) of 4.16, above the 50-day MA of 3.16, and above the 200-day MA of 2.69, indicating a neutral trend. The MACD of 0.19 indicates Positive momentum. The RSI at 51.62 is Neutral, neither overbought nor oversold. The STOCH value of 12.47 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ELWS.

Earlyworks Co., Ltd. Sponsored ADR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ELWS	44 Neutral	$11.52M	-6.85	-127.37%	―	136.36%	28.66%
NVNI	40 Underperform	$11.13M	-0.90	―	―	―	―
AIXI	38 Underperform	$8.85M	-0.45	―	―	19.01%	44.24%
BNZI	25 Underperform	$8.14M	-0.03	―	―	107.94%	85.99%

Earlyworks Co., Ltd. Sponsored ADR Corporate Events

Earlyworks Co., Ltd. Plans Extraordinary Meeting to Discuss PrimeDelta Acquisition

Earlyworks Co., Ltd. has announced an Extraordinary General Meeting of Shareholders scheduled for November 14, 2025, in Tokyo, Japan. The meeting will address several agenda items, including the issuance of shares and share options for subscription, and the election of two directors. Notably, the agenda includes potential share issuances related to a future acquisition of PrimeDelta Corp., contingent upon due diligence and a definitive agreement. This strategic move aims to acquire PrimeDelta, a company specializing in blockchain-based financial infrastructure, which could enhance Earlyworks’ market position and growth strategy by integrating blockchain technology and expanding into international markets.

Earlyworks Co., Ltd. Completes $4.33 Million Private Placement for Strategic Acquisition

On October 15, 2025, Earlyworks Co., Ltd. completed a private placement offering, raising approximately $4.33 million after expenses. The proceeds are intended for acquiring Prime Delta Corp. The offering involved the sale of pre-funded warrants and ordinary warrants to investors, with specific exercise price conditions and beneficial ownership limitations. The company also entered into agreements to ensure investor participation in future placements and committed to holding a shareholder meeting by November 14, 2025, to approve key proposals, including the acquisition of Prime Delta Corp. This strategic move could enhance Earlyworks’ market position and operational capabilities.

Earlyworks Co., Ltd. Granted Final Nasdaq Compliance Extension

On September 23, 2025, Earlyworks Co., Ltd. announced that it received a final extension from the Nasdaq Hearings Panel to comply with Nasdaq’s listing standards by October 29, 2025. The company had previously been notified on May 2, 2025, about its non-compliance with the Nasdaq Listing Rule 5550(b)(2) regarding the minimum market value of listed securities. Earlyworks is working on equity financing initiatives to meet the alternative compliance standard of a minimum stockholders’ equity of $2.5 million. If compliance is not achieved by the deadline, the company’s securities will be delisted from Nasdaq. During this extension period, Earlyworks’ American Depositary Shares will remain listed and eligible for trading on the Nasdaq Capital Market.

Earlyworks Co., Ltd. Secures Investment Through Private Placement

Earlyworks Co., Ltd., a company based in Tokyo, Japan, entered into an Investment Agreement with a non-U.S. investor on August 27, 2025. The agreement involved a private placement offering of 175,952 ordinary shares at JPY84 per share, generating gross proceeds of JPY 14,779,968 (approximately US$100,000). The transaction closed on September 16, 2025, with the funds intended for working capital and general corporate purposes. This strategic move is expected to bolster the company’s financial standing and operational capabilities.