TRADE WORKS Co.,Ltd (3997) AI Stock Analysis

• Market Cap: ¥19.21B
• Dividend Yield: 0.49%
• Average Volume (3M): 1.17M
• Price to Earnings (P/E): 356.3
• Beta (1Y): 1.18
• Revenue Growth: 14.08%
• EPS Growth: N/A
• Country: JP
• Employees: 254
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.09
• Shares Outstanding: 39,042,000
• 10 Day Avg. Volume: 994,900
• 30 Day Avg. Volume: 1,173,070
• PEG Ratio: -2.33
• Price to Book (P/B): 9.91
• Price to Sales (P/S): 3.50
• P/FCF Ratio: 63.52
• 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: 60 Neutral
• Price Target: ¥517.00 ▲(11.90% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by improving (but still uneven) fundamentals—revenue growth, a 2025 profit recovery, and better free cash flow—tempered by higher leverage and thin margins. Technicals are a clear positive with a strong uptrend and constructive momentum. Valuation is the main drag due to the extremely high P/E and limited dividend support.

Positive Factors

Revenue Growth

Sustained multi-year revenue growth (roughly 2.1B to 5.1B yen, 2020–2025) indicates expanding market traction and product adoption. That persistent top-line expansion provides a durable base for margin improvement, scale benefits, and reinvestment over the next several quarters.

Cash Generation Recovery

Return to positive operating cash flow (2024–2025) and a materially positive free cash flow (~¥278M in 2025) shows improving cash conversion. Durable cash generation strengthens the firm's ability to fund operations, service debt, and invest without relying solely on external financing.

Profitability Rebound

The company’s resumption of positive net income in 2025 reflects operational recovery and execution. A sustained profit run would rebuild retained earnings and improve strategic flexibility, helping to support longer-term investment and creditor confidence if maintained.

Negative Factors

Rising Leverage

Material increase in debt raises fixed obligations and reduces financial flexibility. A debt-to-equity around 0.61 increases refinancing and interest-rate sensitivity, constraining capital allocation and elevating downside risk if cash flow weakens over the next several quarters.

Thin Net Margins

Compressed net margins (about 1% in 2025) mean limited earnings cushion against cost inflation or revenue dips. Persistently thin margins constrain retained earnings and the firm's ability to self-fund growth, making profitability fragile absent structural margin improvement.

Earnings and Cash Flow Volatility

Historic swings between profit and loss and inconsistent free cash flow undermine forecastability and capital planning. Volatility increases the risk that temporary setbacks will strain liquidity or trigger covenant pressure, complicating longer-term investment and financing decisions.

TRADE WORKS Co.,Ltd Business Overview & Revenue Model

Company Description

TRADE WORKS Co., Ltd. provides solutions for front system exchange connection system and unfair transaction monitoring system for securities, forex margin trading (FX), and commodity futures industry. It offers TradeAgent, an Internet stock exchange system that supports various trading tools for online trading of various financial products in the securities, FX, and commodity futures fields; Dealing Athena, a solution that supports transactions and revenue management by persons in charge of self-sales department, as well as provides functions for administrators who manage transactions of each person in charge; Mars, an exchange trading terminal solution that supports securities trading; and MarsWeb, an exchange and information provider connection gateway. The company also provides MTS, an unfair trade monitoring system; and security diagnostic services. TRADE WORKS Co., Ltd. was founded in 1999 and is based in Tokyo, Japan.

How the Company Makes Money

TRADE WORKS Co., Ltd generates revenue primarily through its logistics and trade services, which encompass a range of activities including freight forwarding, customs brokerage, and warehousing. The company earns fees for each transaction processed and may also charge for additional services such as inventory management and shipping consultations. Key revenue streams include long-term contracts with businesses needing regular import/export services, one-time service fees for ad-hoc logistics needs, and commissions from partnerships with other trade-related companies. Additionally, TRADE WORKS may benefit from strategic alliances with shipping companies and local distributors that enhance its service offerings and expand its market presence.

TRADE WORKS Co.,Ltd Financial Statement Overview

Summary

Steady multi-year revenue growth and a return to profitability in 2025 support the score, but margins remain thin (~1% net margin) and earnings have been volatile with losses in 2023–2024. Balance sheet risk has risen with materially higher leverage (debt-to-equity ~0.61), while cash flow improved in 2025 with meaningful positive free cash flow after prior volatility.

Income Statement

Revenue has grown steadily (from ~¥2.1B in 2020 to ~¥5.1B in 2025), with a solid rebound in 2025 (about +7% YoY) after a near-flat 2024. Profitability, however, has been volatile: the company swung from healthy profits in 2020–2022 to losses in 2023–2024, then returned to a small profit in 2025. Margins have compressed versus earlier years (net margin ~1% in 2025 vs ~6–7% in 2021–2022), indicating improved operations recently but still limited earnings power.

Balance Sheet

Leverage has increased materially since 2022: debt moved from near-zero levels in 2021–2022 to a moderate debt load by 2025 (debt-to-equity ~0.61). Equity remains positive and has grown versus 2024, but the higher debt increases financial risk and reduces flexibility compared with the company’s earlier, under-levered balance sheet. Overall, the balance sheet is serviceable, but the direction of leverage is a key watch item.

Cash Flow

Cash generation looks better than accounting earnings recently. Operating cash flow was positive in 2024 and 2025 and free cash flow turned meaningfully positive in 2025 (about ¥278M) after being slightly negative in 2024. That said, cash flow has not been consistent (notably negative operating and free cash flow in 2023), and free cash flow has not reliably tracked net income across the full period, reflecting some volatility in working capital and/or spending.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.70B	5.05B	4.59B	3.75B	3.27B	2.55B
Gross Profit	953.58M	1.18B	786.15M	753.00M	832.23M	699.74M
EBITDA	253.06M	460.90M	83.21M	82.89M	415.48M	374.67M
Net Income	-26.56M	56.89M	-151.69M	-53.00M	200.30M	189.97M
Balance Sheet
Total Assets	3.72B	4.02B	2.90B	3.04B	2.18B	2.10B
Cash, Cash Equivalents and Short-Term Investments	635.54M	973.07M	804.14M	615.00M	688.29M	802.55M
Total Debt	1.17B	1.08B	848.00M	585.00M	9.69M	0.00
Total Liabilities	2.04B	2.14B	1.63B	1.66B	715.46M	392.78M
Stockholders Equity	1.68B	1.78B	1.28B	1.39B	1.46B	1.71B
Cash Flow
Free Cash Flow	0.00	278.13M	-12.87M	-217.00M	390.02M	24.21M
Operating Cash Flow	0.00	312.10M	278.45M	-207.00M	399.77M	53.23M
Investing Cash Flow	0.00	-845.98M	-397.30M	-404.75M	-252.60M	-78.58M
Financing Cash Flow	0.00	702.80M	307.94M	514.00M	-261.42M	-8.10M

TRADE WORKS Co.,Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 462.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3997, the sentiment is Positive. The current price of 462 is below the 20-day moving average (MA) of 513.30, below the 50-day MA of 482.91, and above the 200-day MA of 305.06, indicating a neutral trend. The MACD of 11.94 indicates Positive momentum. The RSI at 46.70 is Neutral, neither overbought nor oversold. The STOCH value of 19.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3997.

TRADE WORKS Co.,Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3984	80 Outperform	¥25.29B	15.97	―	0.73%	17.86%	21.52%
2185	79 Outperform	¥26.07B	10.55	―	3.06%	-6.49%	4.98%
4396	76 Outperform	¥26.23B	16.07	―	1.70%	22.25%	31.88%
3393	74 Outperform	¥29.93B	13.84	―	4.36%	12.32%	10.42%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3997	60 Neutral	¥19.21B	356.28	―	0.49%	14.08%	―
4813	46 Neutral	¥24.13B	-3.51	―	―	25.89%	-285.21%