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

• Market Cap: ¥6.97B
• Dividend Yield: N/A
• Average Volume (3M): 3.17M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.51
• 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: 43 Neutral
• Price Target: ¥53.00 ▲(3.92% Upside)

The overall stock score is primarily impacted by financial performance challenges, including negative profitability and cash flow issues. Technical analysis indicates a bearish trend with weak momentum. Valuation concerns due to a negative P/E ratio further weigh down the score.

Positive Factors

High reported revenue growth

Reported revenue growth of ~122% signals meaningful top-line momentum tied to product uptake. If sustained via enterprise contracts and subscriptions, this growth supports scaling investments, expands customer footprint, and underpins longer-term revenue durability.

Diverse recurring revenue streams and partnerships

The business model mixes software sales, subscription cloud services, and consulting plus strategic technology partnerships. This blend provides recurring revenue, cross-sell opportunities and partner distribution that improve revenue visibility and reduce single-channel dependency over time.

Low leverage / stable capital structure

A modest debt-to-equity ratio (~0.22) and stable equity ratio imply manageable leverage, leaving capacity to finance growth or weather cyclical stress without heavy refinancing. This balance sheet flexibility supports multi-quarter strategic investments and operational resilience.

Negative Factors

Persistent negative profitability

Despite revenue gains, negative net, EBIT and EBITDA margins indicate the company struggles to convert sales into profits. Ongoing unprofitability erodes retained earnings, limits reinvestment capacity, and raises execution risk until operational efficiencies or pricing improvements restore positive margins.

Weak operating and free cash flow

Negative operating and free cash flows show the business is not generating internal cash to fund operations or growth. This structural cash weakness increases reliance on external financing, constrains capital allocation, and can impede sustainable product development and customer expansion.

Small organizational scale

A headcount of 31 suggests limited internal resources for product development, sales scale, and enterprise delivery. Small scale can slow feature development, constrain customer support for large contracts, and increase execution risk as demand grows or competitive pressure intensifies.

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

The company shows revenue growth but faces profitability and cash flow challenges. Negative margins and cash flow issues highlight the need for operational improvements despite a stable balance sheet.

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	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.48B	1.75B	747.64M	941.14M	919.08M	901.53M
Gross Profit	763.03M	900.27M	354.64M	319.08M	368.82M	53.58M
EBITDA	-562.52M	44.74M	-934.40M	-298.24M	-324.29M	-367.55M
Net Income	-678.72M	-69.04M	-961.64M	-347.53M	-403.28M	-581.02M
Balance Sheet
Total Assets	2.36B	2.47B	1.53B	1.35B	1.67B	1.41B
Cash, Cash Equivalents and Short-Term Investments	1.01B	1.25B	595.68M	520.03M	1.10B	736.31M
Total Debt	353.24M	335.41M	460.83M	337.21M	416.48M	519.24M
Total Liabilities	909.96M	895.31M	757.41M	541.28M	567.15M	657.62M
Stockholders Equity	1.42B	1.55B	760.00M	758.60M	1.10B	748.00M
Cash Flow
Free Cash Flow	0.00	-113.30M	-785.10M	-421.58M	-171.90M	-336.38M
Operating Cash Flow	0.00	-64.48M	-54.45M	-370.73M	-139.30M	-315.09M
Investing Cash Flow	0.00	-24.15M	-772.05M	-80.66M	-135.18M	46.05M
Financing Cash Flow	0.00	740.41M	902.01M	-136.98M	616.20M	409.36M

WHY HOW DO COMPANY,Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 51.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3823, the sentiment is Negative. The current price of 51 is below the 20-day moving average (MA) of 53.60, below the 50-day MA of 51.72, and below the 200-day MA of 79.53, indicating a neutral trend. The MACD of 0.53 indicates Positive momentum. The RSI at 47.87 is Neutral, neither overbought nor oversold. The STOCH value of 25.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
2169	78 Outperform	¥12.41B	17.09	―	3.91%	-7.74%	-21.75%
3937	68 Neutral	¥12.70B	12.80	―	3.78%	0.43%	44.79%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4011	58 Neutral	¥11.08B	61.71	―	―	34.56%	4.59%
4015	57 Neutral	¥8.11B	61.57	―	―	49.33%	104.72%
4382	51 Neutral	¥12.67B	-166.92	―	―	16.29%	93.98%
3823	43 Neutral	¥6.97B	-34.87	―	―	134.28%	94.74%