Innovation, Inc. (3970) AI Stock Analysis

• Market Cap: ¥2.76B
• Dividend Yield: 3.89%
• Average Volume (3M): 15.35K
• Price to Earnings (P/E): 40.6
• Beta (1Y): 0.42
• Revenue Growth: 11.03%
• EPS Growth: -73.41%
• Country: JP
• Employees: 157
• Sector: Technology
• Sector Strength: 78
• Industry: Information Technology Services
• EPS (TTM): 15.64
• Shares Outstanding: 2,727,700
• 10 Day Avg. Volume: 3,750
• 30 Day Avg. Volume: 15,350
• PEG Ratio: 0.00
• Price to Book (P/B): 3.04
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.04
• 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

• Rating: 62 Neutral
• Price Target: ¥1,100.00 ▲(7.42%Upside)

Innovation, Inc. scores a 62 out of 99, driven primarily by solid financial stability and revenue growth. However, challenges in profitability and bearish technical indicators weigh down the score. High valuation metrics further limit the stock's attractiveness at current levels.

Innovation, Inc. Business Overview & Revenue Model

Company Description

Innovation, Inc. (3970) is a forward-thinking company operating in the technology sector, specializing in cutting-edge software solutions and digital transformation services. The company focuses on developing innovative software products and providing consultancy services that help businesses optimize their operations through technology.

How the Company Makes Money

Innovation, Inc. generates revenue primarily through the sale of its proprietary software products and subscription-based services. Key revenue streams include licensing fees for software solutions, subscription fees for cloud-based services, and consulting fees for digital transformation projects. The company also forms strategic partnerships with other technology firms to expand its product offerings and reach new markets, contributing significantly to its earnings.

Innovation, Inc. Financial Statement Overview

Summary

Innovation, Inc. demonstrates strong revenue growth and a solid balance sheet with a robust equity position and low debt. However, declining net profit and EBIT margins, along with decreased cash flow metrics, indicate challenges in profitability and cash generation.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
5.33B	5.34B	4.81B	4.57B	4.38B	3.08B
	Gross Profit
2.20B	2.31B	2.07B	2.01B	2.23B	1.55B
	EBIT
313.78M	351.87M	399.54M	343.25M	777.55M	517.68M
	EBITDA
413.35M	381.94M	492.07M	254.95M	804.53M	521.75M
	Net Income Common Stockholders
61.36M	67.48M	244.52M	62.79M	448.08M	293.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.18B	3.74B	3.45B	2.37B	2.18B	2.00B
	Total Assets
4.29B	8.32B	4.68B	3.80B	3.77B	3.14B
	Total Debt
224.00M	2.60B	300.00M	0.00	0.00	0.00
	Net Debt
-2.73B	-975.77M	-2.98B	-2.30B	-2.18B	-2.00B
	Total Liabilities
849.00M	4.25B	1.11B	614.63M	747.46M	605.71M
	Stockholders Equity
3.39B	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	132.98M	345.30M	113.19M	466.46M	422.79M
	Investing Cash Flow
0.00	-1.68B	236.38M	-191.93M	-283.61M	-349.17M
	Financing Cash Flow
0.00	1.91B	403.47M	131.49M	-17.00K	1.25B

Innovation, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1024.00
• 50DMA: Negative
• 100DMA: Negative
• 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:3970, the sentiment is Negative. The current price of 1024 is below the 20-day moving average (MA) of 1044.85, below the 50-day MA of 1069.86, and below the 200-day MA of 1134.93, indicating a bearish trend. The MACD of -15.99 indicates Positive momentum. The RSI at 42.79 is Neutral, neither overbought nor oversold. The STOCH value of 9.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3970.

Innovation, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4421	74 Outperform	¥2.82B	11.30		2.59%	5.84%	7.76%
4394	70 Outperform	¥2.61B	21.95		2.19%	18.87%	―
4335	69 Neutral	¥3.12B	9.96		2.72%	11.74%	-9.04%
3970	62 Neutral	¥2.76B	40.60		3.89%	11.03%	-73.41%
Sector *	62 Neutral	$11.80B	10.08	-7.46%	2.99%	7.37%	-8.21%
4427	52 Neutral	¥4.12B	―		―	2.84%	40.04%
3753	48 Neutral	¥2.48B	―		―	-4.53%	-247.19%