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

• Market Cap: ¥25.27B
• Dividend Yield: N/A
• Average Volume (3M): 99.90K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.51
• 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: 61 Neutral
• Price Target: ¥2,600.00 ▼(-17.85% Downside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is driven primarily by strong operating performance and a significantly strengthened balance sheet, tempered by a sharp deterioration in 2025 operating/free cash flow. Technicals are weak (below key moving averages with negative MACD), and valuation inputs are not supportive due to a negative P/E and no dividend yield data.

Positive Factors

Revenue acceleration

Sustained top-line acceleration reflects stronger product-market fit and expanding customer adoption, enabling durable scale benefits. Over a 2–6 month horizon this supports continued investment in product and sales capacity and increases the likelihood of sustained operating leverage if growth persists.

Very high gross margins

Exceptionally high gross margins are indicative of a capital-light, software-infrastructure model with low variable costs. This structural margin advantage provides long-term buffer for SG&A, enables reinvestment, and supports cash generation potential even if revenue growth normalizes.

Material deleveraging / stronger balance sheet

A much lower debt burden materially reduces refinancing and solvency risk, improving financial flexibility. This durable capital-structure improvement gives management room to weather cash-flow volatility, fund strategic initiatives, or pursue opportunistic M&A without immediate funding stress.

Negative Factors

Operating & free cash flow turned negative

A shift from strong cash conversion to negative operating and free cash flow signals working-capital or investment timing issues and raises near-term funding and execution risk. If cash-generation does not normalize, the company may need external financing or to curtail investments, affecting growth durability.

EBIT margin compression

A meaningful decline in operating margin indicates rising cost pressure or adverse mix that can erode the firm's ability to self-fund expansion. Persistent margin compression would reduce free cash generation and weaken the structural profitability that supports reinvestment and ROE.

Volatile profitability metrics (ROE swings)

Large year-to-year ROE swings suggest earnings and capital base have uneven drivers, possibly from nonrecurring items or capital changes. Such volatility complicates forecasting and raises the risk that recent strong returns may not be durable without stabilizing cash conversion and margin trends.

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.

VRAIN Solution,Inc. Financial Statement Overview

Summary

Strong revenue acceleration and high margins support fundamentals, and the balance sheet has de-risked sharply with near-zero leverage and solid ROE. The key offset is cash-flow reliability: 2025 operating and free cash flow turned negative despite healthy earnings, raising execution and cash-conversion risk.

Income Statement

Revenue accelerated sharply in 2025 (up ~37.6% versus ~1.3% in 2024), and the company maintains very high gross profitability (roughly 78%–89% gross margin across the period). Operating profitability is strong with 2025 EBIT margin near 28% (down from ~35% in 2024), indicating some margin compression despite higher scale. Net margin remains healthy (~20% in 2025, ~23% in 2024) and net income has grown meaningfully since 2022, but the step-down in margins in 2025 is a key watch item.

Balance Sheet

The balance sheet strengthened materially: leverage has been reduced dramatically, with debt-to-equity improving from very high levels in 2022–2023 (about 2.94x and 1.34x) to very low levels in 2024–2025 (~0.07x and ~0.00x). Equity and total assets expanded substantially over time, supporting a much more resilient capital structure. Return on equity remains elevated (~30% in 2025 and ~33% in 2024), though it was exceptionally high in 2023, which can be volatile and not always sustainable.

Cash Flow

Cash generation is volatile and weakened in 2025: operating cash flow swung to a loss (about -¥161m) from strong inflow in 2024 (about +¥436m), and free cash flow also turned negative (about -¥239m) after being solidly positive in 2024 (about +¥418m). This suggests working-capital or investment-related cash usage that did not track earnings in the latest year. The prior-year cash performance demonstrates the model can generate cash, but the latest reversal increases near-term execution and funding-risk considerations despite the improved leverage profile.

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 2503.00, above the 50-day MA of 2613.74, and above the 200-day MA of 2772.28, indicating a bearish trend. The MACD of -17.29 indicates Negative momentum. The RSI at 44.97 is Neutral, neither overbought nor oversold. The STOCH value of 31.27 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
4847	74 Outperform	¥25.05B	13.43	―	3.62%	6.02%	-11.83%
3915	68 Neutral	¥19.68B	9.96	―	―	17.93%	91.21%
3694	68 Neutral	¥21.80B	119.61	―	―	6.33%	14.82%
4475	68 Neutral	¥30.32B	27.58	―	0.39%	30.59%	65.14%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
135A	61 Neutral	¥25.27B	-764.28	―	―	―	―
4434	61 Neutral	¥15.36B	8.71	―	―	―	―