Innovation, Inc. (3970) AI Stock Analysis

• Market Cap: ¥2.70B
• Dividend Yield: 4%
• Average Volume (3M): 8.16K
• Price to Earnings (P/E): 42.7
• Beta (1Y): 0.36
• Revenue Growth: 13.99%
• EPS Growth: -157.48%
• Country: JP
• Employees: 157
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): -70.29
• Shares Outstanding: 2,747,700
• 10 Day Avg. Volume: 5,340
• 30 Day Avg. Volume: 8,156
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥1,130.00
• Price Target Upside: 13.00% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 66 Neutral
• Price Target: ¥1,130.00 ▲(13.00% 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.

Innovation, Inc. Business Overview & Revenue Model

Company Description

Innovation, Inc. (3970) is a forward-thinking technology company specializing in the development and commercialization of cutting-edge software solutions and digital platforms. The company operates primarily within the sectors of artificial intelligence, cloud computing, and cybersecurity, offering a range of products designed to enhance operational efficiency, data security, and digital transformation for businesses across various industries.

How the Company Makes Money

Innovation, Inc. generates revenue through a diversified business model that includes sales of proprietary software licenses, subscription fees for cloud-based services, and consulting services in technology implementation. The company leverages strategic partnerships with leading technology firms and cloud service providers to enhance its product offerings, allowing for scalable solutions that meet the evolving needs of its clientele. Furthermore, Innovation, Inc. capitalizes on its expertise in cybersecurity to offer premium security solutions, which are increasingly in demand as businesses prioritize data protection and compliance with regulatory standards.

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	5.34B	5.34B	4.81B	4.57B	4.38B	3.08B
Gross Profit	2.31B	2.31B	2.07B	2.01B	2.23B	1.55B
EBITDA	414.97M	381.94M	492.07M	254.95M	804.53M	521.75M
Net Income	65.82M	67.48M	244.52M	62.79M	448.08M	293.36M
Balance Sheet
Total Assets	8.32B	8.32B	4.68B	3.80B	3.77B	3.14B
Cash, Cash Equivalents and Short-Term Investments	3.74B	3.74B	3.45B	2.37B	2.18B	2.00B
Total Debt	2.60B	2.60B	300.00M	0.00	0.00	0.00
Total Liabilities	4.25B	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	-1.70B	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: Negative
• Last Price: 1000.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 1000 is below the 20-day moving average (MA) of 1003.90, below the 50-day MA of 1023.18, and below the 200-day MA of 1077.27, indicating a bearish trend. The MACD of -6.81 indicates Negative momentum. The RSI at 42.08 is Neutral, neither overbought nor oversold. The STOCH value of 17.54 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	¥3.16B	12.78	16.81%	2.61%	5.61%	6.12%
4394	70 Outperform	¥2.47B	18.49	―	2.32%	18.75%	―
4335	69 Neutral	¥2.78B	9.72	―	3.28%	19.29%	19.73%
3970	66 Neutral	¥2.70B	42.65	―	4.00%	13.99%	-157.48%
3753	46 Neutral	¥2.45B	-5.71	-75.95%	―	-3.02%	-59.22%
4427	41 Neutral	¥3.68B	-3.70	-93.61%	―	-15.21%	-7.31%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%