Ecomott, Inc. (3987) AI Stock Analysis

• Market Cap: ¥2.70B
• Dividend Yield: N/A
• Average Volume (3M): 20.07K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.60
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: JP
• Employees: 140
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -5.57
• Shares Outstanding: 5,280,400
• 10 Day Avg. Volume: 35,060
• 30 Day Avg. Volume: 20,070
• PEG Ratio: 1.56
• Price to Book (P/B): 3.43
• Price to Sales (P/S): 0.89
• P/FCF Ratio: -9.06
• 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: 45 Neutral
• Price Target: ¥499.00 ▲(13.15% Upside)
• Action: N/A Date: 03/18/26
• Date: Action: N/A 03/18/26

The score is primarily held down by weak financial performance—persistent net losses, rising leverage, and sustained cash burn—despite improved revenue growth and better operating trajectory. Technical signals are moderately constructive, but valuation remains constrained by negative earnings.

Positive Factors

Revenue Re-acceleration

Re-accelerating top-line growth reflects renewed customer demand or successful product traction in the core software infrastructure business. Sustained mid-teens revenue growth over several quarters provides a foundation for scale, better fixed-cost absorption, and the potential to convert operating improvements into lasting profitability.

Improving Operating Trajectory

A move toward near break-even operating results signals durable operational leverage and effective cost control. If management maintains this trend, it reduces the likelihood of additional equity dilution and increases the chance that modest revenue growth will translate into sustainable operating profitability over the next 2–6 months and beyond.

Positive Equity Base

A positive equity base gives the company financial room to absorb losses and access funding if needed. While leverage rose, having net equity supports creditor confidence and provides a structural buffer that preserves operational continuity while management works to restore cash generation and improve margins.

Negative Factors

Rising Leverage

Material increase in leverage weakens financial flexibility and raises refinancing and interest risks. Higher debt relative to equity constrains strategic options, increases fixed costs, and amplifies downside in a revenue shortfall scenario, making sustained recovery dependent on rapid margin or cash-flow improvement.

Persistent Net Losses

Ongoing bottom-line losses indicate the firm has not yet achieved full profitability, limiting retained earnings and long-term capital formation. Continued losses pressure returns on equity and heighten the need for external financing, which could dilute shareholders or increase leverage if losses persist beyond the near-term recovery.

Negative Cash Generation

Sustained negative operating and free cash flow force reliance on debt or equity to fund operations and investments. Weak cash generation undermines the firm's ability to self-fund growth, increases liquidity risk, and makes the business vulnerable to higher financing costs or restricted investment in product and sales initiatives needed to sustain recovery.

Ecomott, Inc. Business Overview & Revenue Model

Company Description

Ecomott Inc. provides Internet of Things (IoT) and M2M solutions in Japan. It offers Yurimott, a snow-melting system remote supervision solution; Gembaroid, a computerized construction work support solution; FASTIO, an IoT platform solution; and Pdrive, a traffic accident avoidance solution. The company's solutions are used in network design and architecture, cloud application design and development, planning and proposal, system integration, device design and development, and assembly production industries. Ecomott Inc. was incorporated in 2007 and is based in Sapporo, Japan.

Ecomott, Inc. Financial Statement Overview

Summary

Revenue growth improved and operating results moved toward near break-even, but the company remains net loss-making, gross margin is structurally lower than prior years, leverage has risen materially, and operating/free cash flow have turned persistently negative—creating elevated financial risk.

Income Statement

Revenue growth re-accelerated in FY2025 (annual report) to ~13.8% versus near-flat FY2023, and profitability improved meaningfully from deep losses in FY2023 toward near break-even operating results in FY2024–FY2025. However, the company is still loss-making at the bottom line in FY2023–FY2025, and margins have compressed versus FY2021–FY2022 (gross margin down from ~45–46% to ~35% in FY2023–FY2025), limiting earnings quality and resilience.

Balance Sheet

Leverage has increased steadily, with debt-to-equity rising from ~0.39 (FY2022) to ~1.38 (FY2025), reducing balance-sheet flexibility. Equity remains positive, but returns on equity turned negative in FY2023–FY2025 alongside net losses, and total debt has grown faster than the equity base. Overall, the balance sheet is still workable, but the trajectory points to higher financial risk if profitability and cash generation don’t improve.

Cash Flow

Cash generation has weakened materially: operating cash flow swung from solidly positive in FY2021–FY2022 to negative in FY2023 and especially FY2025, and free cash flow is negative in FY2023–FY2025. The business is currently funding operations/investment with cash burn rather than internally generated cash, which is a key risk given rising leverage.

Breakdown	Aug 2025	Aug 2024	Aug 2023	Aug 2022	Aug 2021
Income Statement
Total Revenue	3.00B	2.69B	2.72B	2.22B	2.16B
Gross Profit	1.07B	1.00B	956.25M	1.01B	972.68M
EBITDA	159.83M	88.73M	43.32M	132.82M	181.49M
Net Income	-35.04M	-69.15M	-174.86M	27.77M	13.71M
Balance Sheet
Total Assets	2.56B	2.58B	2.24B	1.87B	1.96B
Cash, Cash Equivalents and Short-Term Investments	333.37M	582.79M	586.20M	546.12M	742.01M
Total Debt	1.08B	946.60M	707.62M	427.25M	492.23M
Total Liabilities	1.77B	1.72B	1.30B	768.64M	887.66M
Stockholders Equity	784.21M	863.98M	932.91M	1.10B	1.08B
Cash Flow
Free Cash Flow	-296.46M	-54.51M	-191.02M	55.25M	302.30M
Operating Cash Flow	-295.64M	11.43M	-179.96M	84.06M	304.00M
Investing Cash Flow	-247.71M	-163.37M	-104.87M	-213.42M	-12.46M
Financing Cash Flow	293.93M	148.53M	324.91M	-64.93M	-161.75M

Ecomott, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3040	73 Outperform	¥34.24B	16.59	19.71%	3.09%	3.44%	79.35%
3915	68 Neutral	¥21.05B	9.96	―	―	17.93%	91.21%
3694	68 Neutral	¥22.68B	119.61	―	―	6.33%	14.82%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4434	61 Neutral	¥15.99B	8.71	―	―	―	―
9417	58 Neutral	¥3.53B	-2.61	―	2.04%	14.34%	―
3987	45 Neutral	¥2.70B	-21.01	―	―	―	―