VRAIN Solution,Inc. (135A) AI Stock Analysis

• Market Cap: ¥25.13B
• Dividend Yield: N/A
• Average Volume (3M): 99.90K
• Price to Earnings (P/E): 70.7
• Beta (1Y): 1.59
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: JP
• Employees: 97
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -1.18
• Shares Outstanding: 10,256,000
• 10 Day Avg. Volume: 149,710
• 30 Day Avg. Volume: 99,900
• PEG Ratio: 1.92
• Price to Book (P/B): 15.01
• Price to Sales (P/S): 9.95
• P/FCF Ratio: -89.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: ¥2,742.00 ▼(-13.36% Downside)
• Action: Reiterated Date: 01/16/26
• Date: Action: Reiterated 01/16/26

The score is driven primarily by strong reported growth/profitability and a stable balance sheet, tempered by materially weak cash flow trends. Technical indicators point to soft near-term momentum, and the high P/E adds valuation risk.

Positive Factors

High Revenue Growth

Sustained double‑digit revenue expansion reflects strong product-market fit and growing customer adoption in the infrastructure software niche. Durable top-line momentum supports scale economies, reinvestment in R&D and sales, and a larger addressable base for future margin and profit expansion.

Strong Profit Margins

Healthy gross and improving net margins point to effective pricing and cost controls that are likely sustainable as the business scales. Margin strength provides buffer against competitive pressure, funds internal investment, and supports long‑term cash generation if conversion issues are addressed.

Healthy Balance Sheet & Low Leverage

A strong equity base and low leverage give the company financial flexibility to invest, weather cyclicality, and access capital without excessive refinancing risk. Improved ROE indicates productive use of capital, supporting sustainable growth initiatives and strategic optionality over multiple quarters.

Negative Factors

Negative Operating Cash Flow

Operating cash flow falling into negative territory signals that reported profits are not being realized in cash. Over several quarters this can constrain working capital, force reliance on external financing, and impede organic funding of growth initiatives or necessary capex without diluting stakeholders.

Sharply Weakened Free Cash Flow

A material drop in free cash flow reduces the company's ability to self‑fund R&D, product development and scaling costs. Persistently weak FCF increases vulnerability to funding shocks, limits discretionary investment, and may raise long‑term cost of capital if external funding becomes necessary.

Earnings Not Converting to Cash

A negative operating cash flow to net income ratio suggests earnings quality issues driven by accruals or working capital swings. This undermines the reliability of profitability metrics for planning, elevates liquidity risk, and can force management into tradeoffs between growth, capital returns, and balance sheet repair.

VRAIN Solution,Inc. Business Overview & Revenue Model

Company Description

Vrain Solution Inc is engaged in providing AI solutions for the manufacturing industry. It provides AI visual inspection, AI vibration inspection, AI abnormal sound inspection, production planning optimization and Safety management.

How the Company Makes Money

VRAIN Solution, Inc. generates revenue primarily through a subscription-based model for its software products, which allows clients to access its advanced analytics tools and machine learning applications on an ongoing basis. Key revenue streams include licensing fees from its proprietary software, consulting services for customized AI solutions, and training programs for client teams to effectively utilize these technologies. Additionally, VRAIN has established strategic partnerships with industry leaders, enhancing its market reach and enabling collaborative projects that drive further revenue. The company also benefits from government contracts and grants for research initiatives, contributing to its overall earnings.

VRAIN Solution,Inc. Financial Statement Overview

Summary

Strong income statement momentum (revenue growth and improving profitability) and a solid balance sheet with low leverage support the score, but the cash flow profile is a meaningful risk due to negative operating cash flow and sharply weaker free cash flow.

Income Statement

VRAIN Solution, Inc. has demonstrated impressive revenue growth, with a significant increase from 2024 to 2025. The gross profit margin remains strong, indicating efficient cost management. The net profit margin has improved, reflecting enhanced profitability. However, the EBIT and EBITDA margins, while healthy, suggest room for further operational efficiency improvements.

Balance Sheet

The company maintains a robust equity position with a high equity ratio, indicating financial stability. The debt-to-equity ratio is low, reflecting prudent leverage management. Return on equity has improved, showcasing effective use of shareholder funds. However, the decrease in cash and cash equivalents over the period may warrant attention.

Cash Flow

The cash flow statement reveals a concerning decline in operating cash flow, turning negative in 2025, which could impact liquidity. The free cash flow has also decreased significantly, indicating potential challenges in funding operations without external financing. The operating cash flow to net income ratio is negative, highlighting cash flow management issues.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022
Income Statement
Total Revenue	1.97B	2.14B	1.41B	617.40M	344.47M
Gross Profit	1.56B	1.68B	1.14B	547.09M	305.53M
EBITDA	343.95M	631.55M	515.57M	76.91M	19.80M
Net Income	232.48M	425.07M	330.16M	49.93M	11.19M
Balance Sheet
Total Assets	1.55B	1.87B	1.45B	341.12M	242.28M
Cash, Cash Equivalents and Short-Term Investments	380.00M	488.89M	962.10M	18.09M	81.90M
Total Debt	2.00M	5.20M	68.69M	119.66M	102.85M
Total Liabilities	278.00M	451.39M	452.86M	251.90M	207.35M
Stockholders Equity	1.27B	1.42B	997.04M	89.21M	34.93M
Cash Flow
Free Cash Flow	15.74M	-238.74M	417.85M	-87.99M	-8.49M
Operating Cash Flow	70.17M	-161.24M	435.92M	-40.93M	13.29M
Investing Cash Flow	-209.46M	-242.10M	-18.61M	-39.69M	-75.37M
Financing Cash Flow	-45.97M	-69.89M	526.70M	16.80M	93.67M

VRAIN Solution,Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3165.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:135A, the sentiment is Negative. The current price of 3165 is above the 20-day moving average (MA) of 2539.65, above the 50-day MA of 2827.64, and above the 200-day MA of 2763.29, indicating a bearish trend. The MACD of -75.78 indicates Negative momentum. The RSI at 41.50 is Neutral, neither overbought nor oversold. The STOCH value of 25.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:135A.

VRAIN Solution,Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3915	68 Neutral	¥22.02B	15.13	―	―	17.93%	91.21%
3694	68 Neutral	¥25.30B	20.45	―	―	6.33%	14.82%
4475	68 Neutral	¥32.40B	24.33	―	0.39%	30.59%	65.14%
4847	65 Neutral	¥26.21B	19.66	―	3.62%	6.02%	-11.83%
135A	63 Neutral	¥25.13B	70.66	―	―	―	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4434	61 Neutral	¥16.24B	-46.23	―	―	―	―