Morpho, Inc. (3653) AI Stock Analysis

• Market Cap: ¥4.53B
• Dividend Yield: N/A
• Average Volume (3M): 24.81K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.08
• Revenue Growth: 1.78%
• EPS Growth: -125.35%
• Country: JP
• Employees: 162
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 25.34
• Shares Outstanding: 5,508,500
• 10 Day Avg. Volume: 14,970
• 30 Day Avg. Volume: 24,810
• PEG Ratio: 0.00
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: 54 Neutral
• Price Target: ¥857.00 ▲(1.18% Upside)

The score is primarily driven by solid financial stability from a near debt-free balance sheet, but it is held back by the return to losses and negative free cash flow in 2025. Technically, the stock shows mixed momentum with longer-term trend weakness, and valuation is pressured by a negative P/E and no dividend support.

Positive Factors

Revenue Growth

The substantial revenue growth indicates strong market demand and successful business strategies, positioning Morpho for sustained expansion in the biometric solutions market.

Balance Sheet Health

A strong balance sheet with no debt and high equity ratio provides financial stability and flexibility, allowing Morpho to invest in growth opportunities without leverage risk.

Cash Flow Management

Improved cash flow management enhances Morpho's ability to fund operations and investments internally, supporting long-term growth and financial resilience.

Negative Factors

Earnings Volatility

Negative earnings per share suggest potential volatility in financial performance, which could impact investor confidence and long-term valuation stability.

Profitability Challenges

While profitability has improved, the recent transition from negative margins indicates ongoing challenges in maintaining consistent profit levels, which could affect future financial performance.

Earnings Growth Uncertainty

The significant negative EPS growth highlights uncertainty in earnings expansion, which may hinder Morpho's ability to deliver consistent shareholder returns over time.

Morpho, Inc. Business Overview & Revenue Model

Company Description

Morpho, Inc. engages in the research, development, and licensing of artificial intelligence (AI) and image processing technologies in Japan, the United States, China, South Korea, Europe, and internationally. It offers image processing products, such as image stabilization and noise reduction; video stabilization; video generation; video processing software package; noise reduction in video; HDR image generation; DR-corrected image generation; panorama image generation for selfie photography; motion vector detection; photo effect filters library; image super resolution; frame interpolation; cinemagraph; and smooth camera switching for zooming. The company also provides AI products, that includes fast AI inference engine, image enhancement by AI Based segmentation and pixel filtering, pose estimation, bokeh image generation using dual cameras, image classification, object detection, single camera background blur, image segmentation, object tracking, automatic mask generation, automatic wipe generation, and training data for AI development. Its solutions are used in smart devices, automotives, semiconductors, medical products, digital media, and smart city. The company was incorporated in 2004 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Morpho, Inc. generates revenue through multiple streams primarily centered around the sale of biometric hardware and software solutions. Key revenue streams include direct sales of biometric devices, subscription fees for software services, and maintenance contracts for installed systems. Additionally, the company engages in partnerships with government agencies and large corporations, enabling it to secure long-term contracts that provide steady income. The growing demand for security solutions in various sectors, coupled with the expanding use of biometric technology globally, contributes significantly to Morpho's earnings.

Morpho, Inc. Financial Statement Overview

Summary

Morpho, Inc. has achieved a remarkable financial recovery, shifting from losses to profitability over the last year. The company exhibits strong revenue growth, improved profit margins, and a solid balance sheet with no debt. Cash flow management has also improved significantly, positioning the company for sustainable future growth.

Income Statement

Morpho, Inc. has demonstrated a remarkable turnaround with a significant increase in revenue from ¥2,383 million to ¥3,301 million, representing a 38.3% growth rate. The gross profit margin remains healthy at 57.6%, and the net profit margin has improved from a negative position to 9.13%. The company has successfully transitioned from negative EBIT and EBITDA margins to positive 7.79% and 9.90%, respectively, highlighting improved operational efficiency.

Balance Sheet

The balance sheet of Morpho, Inc. is robust, with no debt and a strong equity position. The equity ratio stands at an impressive 85.43%, indicating financial stability and low leverage risk. The company's return on equity is solid at 8.28%, reflecting effective utilization of equity.

Cash Flow

Morpho, Inc. has shown a positive shift in cash flow management with free cash flow growing from a negative position to ¥65.72 million. The operating cash flow to net income ratio is 0.69, demonstrating efficient cash generation from operations relative to net income. This improvement indicates better cash handling and operational performance.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.28B	3.36B	3.30B	2.38B	2.00B	1.73B
Gross Profit	1.79B	1.84B	1.90B	1.36B	952.07M	866.53M
EBITDA	40.62M	159.15M	326.88M	-226.63M	-473.41M	-734.07M
Net Income	-68.92M	-77.57M	301.48M	-300.18M	-668.39M	-793.42M
Balance Sheet
Total Assets	3.97B	4.15B	4.26B	3.71B	3.86B	4.55B
Cash, Cash Equivalents and Short-Term Investments	2.37B	2.53B	2.94B	2.71B	3.06B	3.39B
Total Debt	2.73M	0.00	23.29M	36.25M	12.84M	21.95M
Total Liabilities	500.00M	526.38M	621.77M	558.59M	460.63M	400.45M
Stockholders Equity	3.47B	3.62B	3.64B	3.15B	3.40B	4.15B
Cash Flow
Free Cash Flow	0.00	-37.01M	65.73M	-365.22M	-477.78M	-694.79M
Operating Cash Flow	0.00	14.06M	207.18M	-267.62M	-415.53M	-653.58M
Investing Cash Flow	0.00	-413.32M	-140.72M	-92.50M	161.38M	-175.87M
Financing Cash Flow	0.00	-9.22M	131.83M	-16.21M	-176.43M	-257.00M

Morpho, Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 847.00
• 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:3653, the sentiment is Neutral. The current price of 847 is above the 20-day moving average (MA) of 805.95, below the 50-day MA of 854.32, and below the 200-day MA of 1075.15, indicating a neutral trend. The MACD of -5.95 indicates Negative momentum. The RSI at 53.12 is Neutral, neither overbought nor oversold. The STOCH value of 73.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3653.

Morpho, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4372	79 Outperform	¥5.50B	12.17	―	1.28%	13.05%	3.18%
3933	75 Outperform	¥5.15B	9.93	―	1.84%	86.36%	116.52%
4446	69 Neutral	¥17.18B	202.47	―	―	14.10%	-53.62%
4379	64 Neutral	¥6.77B	27.80	―	―	11.35%	160.35%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4447	61 Neutral	¥3.16B	35.05	―	4.17%	-15.23%	-65.39%
3653	54 Neutral	¥4.53B	-57.12	―	―	1.78%	-125.35%