Innovation, Inc. (3970) AI Stock Analysis

• Market Cap: ¥2.61B
• Dividend Yield: 4.13%
• Average Volume (3M): 4.07K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.31
• Revenue Growth: 15.64%
• EPS Growth: -268.60%
• Country: JP
• Employees: 157
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): -31.43
• Shares Outstanding: 2,747,900
• 10 Day Avg. Volume: 4,390
• 30 Day Avg. Volume: 4,070
• PEG Ratio: -0.60
• Price to Book (P/B): 0.88
• Price to Sales (P/S): 0.56
• P/FCF Ratio: 29.05
• 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: 66 Neutral
• Price Target: ¥1,130.00 ▲(15.66% Upside)

The overall stock score is driven primarily by strong financial performance, with a robust balance sheet and revenue growth. However, challenges in profitability and cash flow, combined with a negative P/E ratio, weigh on the valuation. Technical indicators suggest a stable market position, but the lack of earnings call data and corporate events limits additional insights.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand for Innovation, Inc.'s products, supporting long-term business expansion and market presence.

Balance Sheet Health

A strong balance sheet with low debt enhances financial stability, providing flexibility for future investments and resilience against economic downturns.

Gross Profit Margin

A strong gross profit margin reflects efficient cost management and pricing power, supporting sustainable profitability and competitive advantage.

Negative Factors

Profitability Decline

Declining net profit margins suggest increasing costs or pricing pressures, which could hinder long-term profitability and shareholder returns.

Cash Flow Volatility

Volatile cash flows can limit the company's ability to fund operations and growth initiatives, potentially impacting its financial health and strategic flexibility.

Increasing Liabilities

Rising liabilities could strain the company's financial resources, affecting its ability to invest in growth and maintain financial stability over time.

Innovation, Inc. Business Overview & Revenue Model

Company Description

Innovation Inc. provides B2B sales and marketing support services in Japan. It offers online media services; and manages sales materials on cloud. The company also provides IT trends, IT TREND EXPO, bizplay, list finder, Match UP, sales doc., cocripo, asset management consulting, and mergers and acquisition intermediation services, as well as engages in the venture capital fund business. Innovation Inc. was incorporated in 2000 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Innovation, Inc. generates revenue through multiple streams: first, by selling software licenses and subscription-based access to its proprietary applications, which provide users with cutting-edge tools for operational efficiency. Second, the company earns income from consulting services, where it partners with organizations to implement tailored technology solutions. Additionally, Innovation, Inc. has established strategic partnerships with other tech firms that enhance its product offerings and expand its market reach, contributing significantly to its overall earnings. These collaborations often include revenue-sharing agreements, further boosting the company's financial performance.

Innovation, Inc. Financial Statement Overview

Summary

Innovation, Inc. shows a strong growth trajectory with increasing revenues and a healthy balance sheet characterized by a robust equity position and low debt. However, profitability and cash flow metrics need improvement to sustain long-term growth and operational efficiency.

Income Statement

Innovation, Inc. has shown consistent revenue growth, with a notable increase from 2022 to 2025. Gross profit margin remains strong, hovering around 43-44% in recent years. However, net profit margin has seen a decline from 2022, highlighting a decrease in profitability. The EBIT margin has also declined, indicating increased operational expenses impacting earnings.

Balance Sheet

The company maintains a solid equity base, with a rising stockholders' equity and a low debt-to-equity ratio due to minimal debt. The equity ratio is robust, illustrating financial stability. However, the increasing liabilities in 2025 might require monitoring to maintain a strong balance sheet.

Cash Flow

Operating cash flow showed volatility, with a significant drop in 2025 compared to previous years. Free cash flow has declined, which could affect future investments. The cash flow to net income ratio indicates a need to enhance cash generation relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.72B	5.34B	4.81B	4.57B	4.38B	3.08B
Gross Profit	2.63B	2.31B	2.07B	2.01B	2.23B	1.55B
EBITDA	249.62M	381.94M	492.07M	254.95M	804.53M	521.75M
Net Income	-105.79M	67.48M	244.52M	62.79M	448.08M	293.36M
Balance Sheet
Total Assets	7.80B	8.32B	4.68B	3.80B	3.77B	3.14B
Cash, Cash Equivalents and Short-Term Investments	3.53B	3.74B	3.45B	2.37B	2.18B	2.00B
Total Debt	2.53B	2.60B	300.00M	0.00	0.00	0.00
Total Liabilities	4.02B	4.25B	1.11B	614.63M	747.46M	605.71M
Stockholders Equity	3.10B	3.39B	3.53B	3.16B	2.98B	2.51B
Cash Flow
Free Cash Flow	0.00	102.65M	275.36M	-758.00K	337.81M	353.62M
Operating Cash Flow	0.00	73.06M	345.30M	113.19M	466.46M	422.79M
Investing Cash Flow	0.00	-1.70B	236.38M	-191.93M	-283.61M	-349.17M
Financing Cash Flow	0.00	1.92B	403.47M	131.49M	-17.00K	1.25B

Innovation, Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 977.00
• 50DMA: Negative
• 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:3970, the sentiment is Neutral. The current price of 977 is above the 20-day moving average (MA) of 964.25, below the 50-day MA of 979.56, and below the 200-day MA of 1046.40, indicating a neutral trend. The MACD of -2.94 indicates Negative momentum. The RSI at 55.70 is Neutral, neither overbought nor oversold. The STOCH value of 72.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3970.

Innovation, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4421	72 Outperform	¥2.75B	10.20	―	3.00%	5.74%	5.97%
4394	70 Outperform	¥2.35B	17.32	―	2.42%	14.23%	1440.00%
4335	69 Neutral	¥2.77B	9.13	―	3.32%	9.68%	25.15%
3970	66 Neutral	¥2.61B	―	―	4.13%	15.64%	-268.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3753	42 Neutral	¥2.12B	―	―	―	-2.29%	31.48%
4427	41 Neutral	¥3.44B	-3.47	―	―	-12.77%	―