WHY HOW DO COMPANY,Inc. (3823) AI Stock Analysis

• Market Cap: ¥7.75B
• Dividend Yield: N/A
• Average Volume (3M): 3.17M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.72
• Revenue Growth: 134.28%
• EPS Growth: 94.74%
• Country: JP
• Employees: 31
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -1.23
• Shares Outstanding: 131,420,700
• 10 Day Avg. Volume: 1,873,480
• 30 Day Avg. Volume: 3,166,339
• PEG Ratio: 1.13
• Price to Book (P/B): 4.85
• Price to Sales (P/S): 4.28
• P/FCF Ratio: -66.22
• 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: 49 Neutral
• Price Target: ¥59.00 ▲(15.69% Upside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 02/11/26

The score is held back primarily by weak profitability and negative operating/free cash flow despite solid revenue growth and manageable leverage. Technicals are supportive in the short term (price above key moving averages, positive MACD) but look stretched due to overbought RSI. Valuation remains unattractive because earnings are negative and no dividend support is available.

Positive Factors

Strong revenue growth

Consistent double-digit revenue growth indicates durable demand for the company’s software, cloud and consulting offerings. Over the medium term this growth supports scale benefits, deeper enterprise relationships, and the potential to leverage recurring subscription revenue into steadier cash flows.

Healthy gross margin

A ~51% gross margin points to strong product pricing, differentiation, and scalable delivery for software/cloud services. Sustained high gross margins provide room to invest in R&D and sales while absorbing SG&A, improving the path to operating profitability as revenue scales.

Manageable leverage

Low leverage and a stable equity ratio give the company financial flexibility to invest in product development and sales motion without heavy interest burden. This capital structure supports strategic investments and reduces refinancing risk over the next several quarters.

Negative Factors

Ongoing losses

Persistent negative net, EBIT and EBITDA margins show the company has not yet converted revenue growth into operating profitability. Continued losses constrain retained earnings, limit reinvestment capacity, and increase reliance on external funding absent a clear path to break-even.

Negative cash generation

Negative operating and free cash flows indicate the business is not yet self-funding and may require financing to sustain growth. Weak cash generation raises execution risk for product expansion and contracting cycles and can dilute shareholders if capital raises are needed.

Negative return on equity

A negative ROE signals the company is not producing returns from shareholders’ capital. Over time this undermines investor confidence and suggests inefficiencies in capital allocation or scaling; improving ROE is necessary to justify future equity financing and durable growth.

WHY HOW DO COMPANY,Inc. Business Overview & Revenue Model

Company Description

THE WHY HOW DO COMPANY, Inc. provides services and solutions for smartphones in Japan. The company offers IoT services, including i ball technical shot, I ball technical pitch, and IoT system for intercoms; games, such as Boku-J, Soccer Japan National Team Heroes, and Nade-Saka; Kiskae Touch, a service to change themes on android smartphones; demo device management system for mobile operator retail outlets; and Rakuobi application for real estate agencies, as well as develops Digital Copel and others. It also provides platform services for smartphones and IoT related solutions; social game and application related development services; contracted game development; IT services for research and development; and system for bingo games, a Guam government-approved gaming system. In addition, the company engages in real estate subleases, trademark management, food and beverage, and hospitality businesses. Further, it develops variety stores under the Niku Yokochu brand name; and operates Interplan IT school, which provides IT seminars for job seekers and training services. The company was formerly known as Acrodea, Inc. and changed its name to THE WHY HOW DO COMPANY, Inc. in January 2022. The company, Inc. was incorporated in 2004 and is headquartered in Tokyo, Japan.

How the Company Makes Money

WHY HOW DO COMPANY generates revenue primarily through a diversified model that includes fees for consulting services, software licensing, and subscription-based digital solutions. Key revenue streams include project-based consulting contracts with businesses seeking to improve their operational frameworks, ongoing support and maintenance agreements for their developed software products, and recurring revenue from subscriptions to their digital training platforms. Additionally, strategic partnerships with technology providers and educational institutions bolster the company's offerings, allowing for co-developed solutions that can be marketed to a broader audience, thus enhancing overall profitability.

WHY HOW DO COMPANY,Inc. Financial Statement Overview

Summary

Revenue grew strongly (+18%) and gross margin is healthy (51.4%), but the company is still loss-making (negative net margin, EBIT/EBITDA). Cash generation is weak with negative operating and free cash flows, outweighing the benefit of a moderately leveraged balance sheet (debt-to-equity 0.22).

Income Statement

The company has shown a significant improvement in revenue growth, with an 18% increase in the latest year. However, profitability remains a concern as the net profit margin is negative, indicating ongoing losses. The gross profit margin is relatively healthy at 51.4%, but negative EBIT and EBITDA margins suggest operational inefficiencies.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.22, indicating manageable leverage. However, the return on equity is negative, reflecting the company's inability to generate profits from shareholders' equity. The equity ratio is stable, suggesting a solid capital structure.

Cash Flow

Cash flow analysis reveals challenges, with negative operating and free cash flows. The free cash flow to net income ratio is high, indicating that cash flow issues are impacting profitability. The company needs to improve its cash generation capabilities to support operations.

Breakdown	Aug 2025	Aug 2024	Aug 2023	Aug 2022	Aug 2021
Income Statement
Total Revenue	1.75B	747.64M	941.14M	919.08M	901.53M
Gross Profit	900.27M	354.64M	319.08M	368.82M	53.58M
EBITDA	44.74M	-934.40M	-298.24M	-324.29M	-367.55M
Net Income	-69.04M	-961.64M	-347.53M	-403.28M	-581.02M
Balance Sheet
Total Assets	2.47B	1.53B	1.35B	1.67B	1.41B
Cash, Cash Equivalents and Short-Term Investments	1.25B	595.68M	520.03M	1.10B	736.31M
Total Debt	335.41M	460.83M	337.21M	416.48M	519.24M
Total Liabilities	895.31M	757.41M	541.28M	567.15M	657.62M
Stockholders Equity	1.55B	760.00M	758.60M	1.10B	748.00M
Cash Flow
Free Cash Flow	-113.30M	-785.10M	-421.58M	-171.90M	-336.38M
Operating Cash Flow	-64.48M	-54.45M	-370.73M	-139.30M	-315.09M
Investing Cash Flow	-24.15M	-772.05M	-80.66M	-135.18M	46.05M
Financing Cash Flow	740.41M	902.01M	-136.98M	616.20M	409.36M

WHY HOW DO COMPANY,Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.00
• 50DMA: Positive
• 100DMA: Positive
• 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:3823, the sentiment is Positive. The current price of 51 is below the 20-day moving average (MA) of 59.90, below the 50-day MA of 54.80, and below the 200-day MA of 74.95, indicating a neutral trend. The MACD of 0.50 indicates Positive momentum. The RSI at 51.05 is Neutral, neither overbought nor oversold. The STOCH value of 19.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3823.

WHY HOW DO COMPANY,Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9698	76 Outperform	¥9.81B	11.97	―	4.24%	2.08%	25.42%
3826	70 Outperform	¥5.64B	7.44	―	2.28%	―	―
4168	67 Neutral	¥9.81B	10.50	―	0.70%	9.78%	-23.98%
3804	65 Neutral	¥10.27B	16.38	―	1.51%	8.65%	12.86%
5244	65 Neutral	¥10.26B	8.26	―	1.20%	12.21%	6.86%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3823	49 Neutral	¥7.75B	-39.57	―	―	134.28%	94.74%