Techno Mathematical Co., Ltd. (3787) AI Stock Analysis

• Market Cap: ¥1.82B
• Dividend Yield: N/A
• Average Volume (3M): 4.80K
• Price to Earnings (P/E): 69.3
• Beta (1Y): 0.38
• Revenue Growth: -1.34%
• EPS Growth: 17.01%
• Country: JP
• Employees: 56
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 46.64
• Shares Outstanding: 2,593,100
• 10 Day Avg. Volume: 3,720
• 30 Day Avg. Volume: 4,796
• PEG Ratio: -0.05
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 3.27
• P/FCF Ratio: -6.61
• 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: 50 Neutral
• Price Target: ¥665.00 ▲(13.10% Upside)
• Action: Upgraded Date: 12/30/25
• Date: Action: Upgraded 12/30/25

The score is held down primarily by weak financial performance (recurring losses, deteriorating margins, and renewed cash burn), despite a debt-free balance sheet. Technicals provide moderate support with the stock trading above major moving averages and neutral momentum. Valuation is constrained by negative earnings (negative P/E) and no stated dividend yield.

Positive Factors

Very high gross margins

Gross margins near 90% indicate the company’s services have low direct costs and pricing power. This structural margin advantage provides room to absorb cyclical revenue swings or invest in sales and product development, supporting a faster recovery if operating costs are reined in.

Debt-free balance sheet

A zero-debt capital structure materially reduces refinancing and interest-rate risk and gives flexibility to fund operations or strategic moves while losses persist. Over a 2–6 month horizon this conservatism extends runway and supports optionality for M&A or investment without immediate external financing.

Recurring service-based revenue streams

The business mix includes systems development plus recurring operation/maintenance and staffed engineering services, creating stable, repeatable revenue and client lock-in. These durable service contracts improve revenue visibility and provide a base to upsell higher-margin projects over time.

Negative Factors

Persistent net losses & collapsing margins

Continuous net losses and a steep margin decline to roughly -68% in FY2025 show operating costs vastly outstrip high gross margins. This structural lack of profitability erodes capital and threatens long-term viability unless cost structure or revenue mix is materially corrected.

Recent negative operating and free cash flow

Consecutive years of negative operating and free cash flow indicate the company is burning cash despite service revenues. Persistent cash deficits limit the ability to invest in delivery capacity or sales, and increase the likelihood of needing external funding if the trend continues.

Eroding shareholder equity & weak ROE

Falling equity and sustained negative ROE reflect cumulative losses that shrink the capital buffer. This erosion reduces financial flexibility to pursue growth or weather shocks, and increases structural risk for funding operations or strategic initiatives without dilution or external support.

Techno Mathematical Co., Ltd. Business Overview & Revenue Model

Company Description

Techno Mathematical Co., Ltd. develops software and hardware IPs in Japan. It develops and licenses image, audio, and voice related software IPs for various types of digital equipment; hardware IPs used for design data for silicon chips. The company develops video devices, FPGA design kits, and codec chips. It serves electronic device, entertainment, service, media, security, medical, construction, telecommunication, machine, automobile, agriculture, forestry, fisheries, and transportation industries. Techno Mathematical Co., Ltd. was incorporated in 2000 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Techno Mathematical Co., Ltd. makes money through the sale of its proprietary software products and licensing of its advanced mathematical algorithms. The company generates revenue by offering software libraries and development tools that are essential for enhancing the performance of digital imaging and video processing technologies. Additionally, Techno Mathematical Co., Ltd. may enter into strategic partnerships with technology firms and device manufacturers, which utilize its software solutions to improve their product offerings. These collaborations often result in licensing agreements and service contracts that contribute to the company's earnings.

Techno Mathematical Co., Ltd. Financial Statement Overview

Summary

Financials are pressured by recurring net losses with sharply worsening net margin in FY2025 (about -68%) and a recent revenue decline (about -5% FY2025). Cash flow is also weak, with operating and free cash flow negative again in FY2024–FY2025. The key offset is a conservative, debt-free balance sheet and very high gross margins (roughly 90%+), but operating costs are overwhelming this advantage.

Income Statement

Profitability is the clear weak spot: the company has reported net losses every year shown, with margins deteriorating sharply in the most recent period (FY2025 net margin about -68% vs. about -27% in FY2024 and about -8% in FY2023). Revenue has also been inconsistent and recently declined (about -5% in FY2025 after a modest decline in FY2024). A positive is the very high gross margin profile (roughly 90%+), indicating strong pricing/low direct cost structure, but operating costs are overwhelming that advantage.

Balance Sheet

The balance sheet is conservatively positioned with no debt across all periods provided, which materially reduces financial risk and refinancing pressure. However, ongoing losses are weighing on shareholder value, reflected in persistently negative returns on equity (roughly -2% to -16%) and equity trending down from earlier years (about ¥2.57B in FY2020 to about ¥1.76B in FY2025). Overall: strong leverage profile, but profitability-related erosion is a key concern.

Cash Flow

Cash generation is volatile and has recently been weak: operating cash flow and free cash flow turned negative again in FY2024 and FY2025 after a positive year in FY2023. While free cash flow has generally tracked net income closely (free cash flow to net income near ~1x in most years), the underlying issue is that earnings are negative and recent cash burn raises execution risk if it persists.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	443.30M	416.59M	527.77M	599.39M	569.31M	416.34M
Gross Profit	392.43M	376.85M	491.82M	559.04M	549.50M	372.26M
EBITDA	-243.97M	-273.93M	-150.00M	-48.00M	-71.00M	-246.00M
Net Income	-273.89M	-285.00M	-144.56M	-46.29M	-70.94M	-245.81M
Balance Sheet
Total Assets	1.78B	1.84B	2.19B	2.30B	2.35B	2.43B
Cash, Cash Equivalents and Short-Term Investments	699.54M	738.37M	946.48M	1.21B	1.13B	1.41B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	76.93M	81.03M	116.64M	94.13M	91.01M	83.61M
Stockholders Equity	1.70B	1.76B	2.07B	2.20B	2.26B	2.35B
Cash Flow
Free Cash Flow	0.00	-205.81M	-277.42M	67.20M	-242.73M	-144.01M
Operating Cash Flow	0.00	-202.85M	-272.94M	70.88M	-230.73M	-143.50M
Investing Cash Flow	0.00	778.00K	-1.41M	-3.08M	-54.54M	1.66M
Financing Cash Flow	0.00	0.00	0.00	0.00	-53.00K	-25.00K

Techno Mathematical Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 588.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3787, the sentiment is Positive. The current price of 588 is below the 20-day moving average (MA) of 637.60, below the 50-day MA of 612.04, and above the 200-day MA of 577.04, indicating a bullish trend. The MACD of 20.42 indicates Negative momentum. The RSI at 55.11 is Neutral, neither overbought nor oversold. The STOCH value of 50.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3787.

Techno Mathematical Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4491	82 Outperform	¥6.08B	13.76	―	1.87%	6.18%	29.79%
3771	77 Outperform	¥31.38B	12.82	―	2.93%	11.53%	23.23%
3826	70 Outperform	¥5.64B	7.44	―	2.28%	―	―
4826	70 Outperform	¥32.96B	16.65	―	2.83%	4.51%	75.35%
4075	67 Neutral	¥4.93B	29.16	―	―	28.63%	551.37%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3787	50 Neutral	¥1.82B	69.33	―	―	-1.34%	17.01%

Techno Mathematical Co., Ltd. Corporate Events

Techno Mathematical Swings Back to Profit on Nearly Doubled Sales

Techno Mathematical Co., Ltd. reported a sharp recovery in its third quarter ended December 2025, with net sales rising 94.4% year on year to 544 million yen and net profit turning positive at 67 million yen, compared with a loss in the previous year. Operating and ordinary profits also moved back into the black, lifting basic earnings per share to 25.95 yen from a significant loss.

The company’s financial position remained solid, with total assets increasing to 1,950 million yen and a high capital adequacy ratio of 94.2%, while net assets per share rose to 709 yen. Despite the earnings recovery and strong balance sheet, the firm maintained a conservative stance on shareholder returns, keeping its interim and year-end dividend per share at zero for the current fiscal year.

The most recent analyst rating on (JP:3787) stock is a Hold with a Yen574.00 price target. To see the full list of analyst forecasts on Techno Mathematical Co., Ltd. stock, see the JP:3787 Stock Forecast page.