Abalance Corp (3856) AI Stock Analysis

• Market Cap: ¥10.52B
• Dividend Yield: 1.45%
• Average Volume (3M): 416.72K
• Price to Earnings (P/E): 2.4
• Beta (1Y): 1.76
• Revenue Growth: -40.21%
• EPS Growth: -54.31%
• Country: JP
• Employees: 1,684
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 34.28
• Shares Outstanding: 19,033,194
• 10 Day Avg. Volume: 390,200
• 30 Day Avg. Volume: 416,716
• PEG Ratio: -0.11
• Price to Book (P/B): 0.49
• Price to Sales (P/S): 0.12
• P/FCF Ratio: -0.83
• 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: 53 Neutral
• Price Target: ¥563.00 ▲(24.28% Upside)
• Action: Reiterated Date: 02/28/26
• Date: Action: Reiterated 02/28/26

The score is held back primarily by weak financial performance (declining revenue/profitability, high leverage, and negative operating/free cash flow). Valuation is a key offset due to the very low P/E, while technicals are mixed with short-term strength but longer-term weakness and a negative MACD.

Positive Factors

Renewable energy focus

Abalance's strategic focus on renewable energy and solar-related environmental solutions aligns the company with long-term structural demand from decarbonization and electrification trends. This addressable-market alignment supports enduring revenue opportunity and strategic relevance over multiple years.

Operational margin resilience

A positive EBITDA margin despite recent headwinds indicates core operations can generate operating profit before non-cash and financing items. That operational resilience provides management runway to optimize costs, sustain capacity, and prioritize investment decisions through cyclical downturns.

Cash conversion signal

A positive free cash flow to net income ratio shows some ability to convert accounting profits into cash, offering a durable lever for funding necessary capex or partial deleveraging. Over 2-6 months this metric supports liquidity planning even if total cash flows are pressured.

Negative Factors

High leverage

A debt-to-equity ratio near 2.3 signals materially elevated leverage, limiting financial flexibility. High interest and principal obligations raise refinancing and solvency risk, constraining the company's ability to invest in growth initiatives or weather further revenue pressure over the medium term.

Negative operating and free cash flow

Sustained negative operating and free cash flows undermine the firm's capacity to self-fund operations, service debt, and invest in projects. Persistent cash burn increases reliance on external financing and enhances execution risk, a structurally adverse position for multi-quarter stability.

Declining revenue and margins

Significant revenue decline and compressing gross and net margins point to weakening market traction or pricing pressure. This combination erodes scale benefits and return on equity, making it harder to restore profitability and repay debt without material operational or strategic changes.

Abalance Corp Business Overview & Revenue Model

Company Description

Abalance Corp (3856) is a technology-driven company specializing in innovative solutions across the fields of software development, data analytics, and digital transformation services. With a strong foothold in the enterprise sector, Abalance Corp provides cutting-edge products that enhance operational efficiency and drive business growth for its clients. The company focuses on delivering tailored software solutions, integrating advanced analytics, and offering comprehensive consulting services to a diverse range of industries including finance, healthcare, and retail.

How the Company Makes Money

Abalance Corp generates revenue primarily through its software licensing and subscription models, where clients pay for access to its proprietary software tools and platforms. Additionally, the company earns income from professional services, including custom software development and consulting, which are billed on a project basis or through retainer agreements. Strategic partnerships with major cloud service providers and technology firms also contribute to its earnings by enabling collaborative projects and expanding its market reach. Furthermore, Abalance Corp benefits from recurring revenue streams through maintenance and support services provided to existing clients.

Abalance Corp Financial Statement Overview

Summary

Weak overall fundamentals: revenue growth is sharply negative (-23.85%), profitability has declined (lower gross and net margins), leverage is high (debt-to-equity 2.31) with reduced ROE, and cash flow is pressured with negative operating and free cash flows.

Income Statement

Abalance Corp's income statement shows a significant decline in revenue growth, with a negative growth rate of -23.85% in the latest year. Gross profit margin and net profit margin have also decreased compared to previous years, indicating reduced profitability. Despite these challenges, the company maintains a positive EBITDA margin, suggesting some operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 2.31, indicating significant leverage and potential financial risk. Return on equity has decreased substantially, reflecting lower profitability for shareholders. The equity ratio is not explicitly provided, but the high debt levels suggest a lower proportion of equity in the capital structure.

Cash Flow

Cash flow analysis indicates negative operating and free cash flows, with a significant decline in free cash flow growth. The operating cash flow to net income ratio is negative, highlighting cash flow challenges. The free cash flow to net income ratio is positive, suggesting some ability to generate cash relative to net income, but overall cash flow health is weak.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	126.79B	96.56B	208.97B	217.41B	92.44B	26.90B
Gross Profit	27.25B	14.41B	44.57B	30.38B	9.71B	4.79B
EBITDA	24.28B	14.69B	31.41B	17.75B	4.51B	2.08B
Net Income	5.02B	1.27B	9.53B	4.96B	867.00M	537.00M
Balance Sheet
Total Assets	145.94B	145.80B	150.17B	144.09B	85.18B	39.39B
Cash, Cash Equivalents and Short-Term Investments	26.45B	26.45B	37.74B	20.62B	3.97B	4.72B
Total Debt	56.38B	56.38B	44.95B	52.03B	31.78B	13.77B
Total Liabilities	102.46B	102.46B	107.74B	120.78B	77.18B	34.61B
Stockholders Equity	24.45B	24.45B	24.11B	12.86B	6.07B	4.02B
Cash Flow
Free Cash Flow	-6.59B	-14.35B	33.94B	3.93B	-12.50B	-3.35B
Operating Cash Flow	-5.17B	-10.36B	44.76B	19.27B	-6.35B	-608.00M
Investing Cash Flow	-2.72B	-2.62B	-21.19B	-21.42B	-13.32B	-1.39B
Financing Cash Flow	5.00B	4.13B	-5.45B	17.23B	17.75B	5.29B

Abalance Corp Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 453.00
• 50DMA: Positive
• 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:3856, the sentiment is Neutral. The current price of 453 is below the 20-day moving average (MA) of 542.50, below the 50-day MA of 504.58, and below the 200-day MA of 748.05, indicating a neutral trend. The MACD of 1.25 indicates Negative momentum. The RSI at 52.29 is Neutral, neither overbought nor oversold. The STOCH value of 75.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3856.

Abalance Corp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3965	69 Neutral	¥4.88B	9.45	―	2.20%	18.47%	155.94%
4397	68 Neutral	¥6.61B	16.39	―	―	11.32%	―
5588	62 Neutral	¥9.68B	47.16	―	0.12%	37.21%	129.72%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4074	59 Neutral	¥5.46B	18.72	―	―	-3.20%	-39.38%
4015	57 Neutral	¥7.36B	54.80	―	―	49.33%	104.72%
3856	53 Neutral	¥10.52B	2.36	―	1.45%	-40.21%	-54.31%