Gexeed Co., Ltd. (3719) AI Stock Analysis

• Market Cap: ¥7.16B
• Dividend Yield: N/A
• Average Volume (3M): 1.80M
• Price to Earnings (P/E): 38.1
• Beta (1Y): 0.45
• Revenue Growth: 156.37%
• EPS Growth: 495.81%
• Country: JP
• Employees: 35
• Sector: Industrials
• Sector Strength: 72
• Industry: Consulting Services
• EPS (TTM): -0.54
• Shares Outstanding: 27,971,231
• 10 Day Avg. Volume: 1,011,080
• 30 Day Avg. Volume: 1,798,500
• PEG Ratio: 2.52
• Price to Book (P/B): 3.08
• Price to Sales (P/S): 2.39
• P/FCF Ratio: -5.21
• 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: 58 Neutral
• Price Target: ¥302.00 ▼(-17.26% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily held back by weak cash conversion (negative operating/free cash flow) and increased leverage despite strong revenue growth and improving profitability. Technical signals are broadly neutral with modest positive momentum, while valuation remains a headwind due to a high P/E and only a modest dividend yield.

Positive Factors

Revenue growth

An ~87% revenue increase in 2025 reflects a durable scaling of core services and expanding market traction. Sustained top-line momentum provides structural room to invest in product capabilities, absorb fixed costs, and improve long-term profitability if maintained across upcoming quarters.

Profitability turnaround

Move from prior loss-making periods to a positive operating profit and ~10% margin indicates structural improvements in pricing, cost control or service mix. Lasting operating profitability enhances capacity to fund growth internally and supports resilience through modest demand cycles.

Positive return on equity

A positive ROE (~9%) alongside equity growth shows the business is generating returns on invested capital as it scales. This suggests sustainable unit economics and the potential for improving capital efficiency over time if cash conversion and reinvestment are addressed.

Negative Factors

Weak cash generation

Persistent negative operating and free cash flow means reported profits are not converting to cash, forcing reliance on external funding or working capital cycles. Over the medium term this raises financing risk, limits self-funded investment, and can constrain durable margin improvement.

Rising leverage

Material increase in debt and debt-to-equity reduces financial flexibility and elevates refinancing risk. Combined with negative cash flow, higher leverage can force costly financing choices, constrain strategic options, and amplify downside in stress scenarios over the next several quarters.

Margin compression

Net margin contraction from ~10% to ~7% while scaling suggests rising costs or heavy reinvestment that outpaced revenue gains. If sustained, this can weaken cash conversion and long-term return profiles, making recent profit gains more fragile absent structural cost control.

Gexeed Co., Ltd. Business Overview & Revenue Model

Company Description

Gexeed Co., Ltd. (3719) is a Japanese company that specializes in providing comprehensive IT services and solutions. The company operates in sectors such as information technology, consulting, and outsourcing. Its core services include system integration, IT infrastructure management, software development, and business process outsourcing, catering primarily to corporate clients seeking to enhance their operational efficiencies through technological advancements.

How the Company Makes Money

Gexeed Co., Ltd. generates revenue primarily through its IT services and solutions offerings. The company earns money by providing system integration services, where it designs and implements IT systems tailored to meet the specific needs of its clients. Additionally, Gexeed offers IT infrastructure management services, which involve the maintenance and support of clients' IT systems, ensuring optimal performance and reliability. Software development is another key revenue stream, with the company developing customized software applications to address unique business challenges faced by its customers. Business process outsourcing services also contribute to Gexeed's earnings, as the company manages various business functions for its clients, allowing them to focus on their core activities. Significant partnerships with technology providers and corporate clients further bolster Gexeed's revenue, as these collaborations enhance its service offerings and expand its market reach.

Gexeed Co., Ltd. Financial Statement Overview

Summary

Strong revenue and profitability turnaround (2025 revenue up ~87% YoY; positive operating profit with ~10% operating margin), but quality of earnings is pressured by persistently negative operating and free cash flow (key weakness) alongside rising leverage (debt-to-equity up to ~0.61 in 2025).

Income Statement

The income statement shows a strong growth trajectory, with revenue scaling sharply from 2023 to 2025 (2025 revenue up ~87% YoY). Profitability has also improved meaningfully versus the 2020–2023 loss-making period, with 2025 delivering positive operating profit and solid operating margin (~10%) and a positive net margin (~7%). Offsetting this, net margin compressed versus 2024 (~10% to ~7%), suggesting rising costs or investment spending as the business scales.

Balance Sheet

The balance sheet is adequate but trending riskier. Leverage increased materially, with total debt rising sharply and debt-to-equity moving up to ~0.61 in 2025 (from ~0.35 in 2024 and near-zero in 2023). Equity has grown, but the higher debt load reduces flexibility. Returns on equity are positive (~9% in 2025) but down from 2024 (~12%), indicating profitability is improving but not keeping pace with the capital base and incremental leverage.

Cash Flow

Cash flow is the key weakness. Operating cash flow is deeply negative in both 2024 and 2025, and free cash flow is also strongly negative in those periods, indicating profits are not translating into cash and the business may be consuming cash to fund working capital and/or growth. While free cash flow deterioration was modest in 2025 versus 2024, the overall cash generation profile remains fragile and increases financing risk given the higher leverage.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.65B	1.42B	671.20M	642.51M	480.07M
Gross Profit	946.31M	389.27M	155.10M	150.51M	99.19M
EBITDA	352.80M	201.85M	-66.78M	25.56M	-113.04M
Net Income	177.80M	147.53M	-70.56M	14.71M	-129.42M
Balance Sheet
Total Assets	5.06B	2.34B	1.20B	985.88M	1.01B
Cash, Cash Equivalents and Short-Term Investments	388.70M	255.68M	730.58M	748.48M	750.43M
Total Debt	1.26B	408.37M	0.00	22.19M	84.70M
Total Liabilities	3.00B	1.16B	94.88M	129.68M	160.56M
Stockholders Equity	2.06B	1.18B	1.10B	856.20M	850.58M
Cash Flow
Free Cash Flow	-1.22B	-1.20B	-362.51M	44.68M	-81.00M
Operating Cash Flow	-1.04B	-867.76M	-115.55M	44.94M	-73.65M
Investing Cash Flow	-181.22M	114.23M	-188.18M	15.62M	-40.85M
Financing Cash Flow	1.56B	328.33M	285.83M	-62.51M	62.28M

Gexeed Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 365.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3719, the sentiment is Neutral. The current price of 365 is above the 20-day moving average (MA) of 279.95, above the 50-day MA of 267.30, and above the 200-day MA of 290.18, indicating a bearish trend. The MACD of -5.93 indicates Positive momentum. The RSI at 46.21 is Neutral, neither overbought nor oversold. The STOCH value of 19.72 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3719.

Gexeed Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6532	71 Outperform	¥666.07B	19.22	―	1.30%	25.07%	26.47%
2170	69 Neutral	¥57.05B	37.56	―	2.96%	10.63%	7.42%
4763	66 Neutral	¥32.75B	9.46	―	2.71%	4.27%	27.62%
4792	64 Neutral	¥32.30B	14.32	―	4.39%	2.46%	-31.77%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
9556	63 Neutral	¥27.78B	18.38	―	―	16.77%	39.98%
3719	58 Neutral	¥7.16B	38.10	―	―	156.37%	495.81%