Headwaters Co., Ltd. (JP:4011)
:4011
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Headwaters Co., Ltd.
(4011)
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Rating:43Neutral
Price Target:
¥1,964.00
▼(-31.97% Downside)
Action:Reiterated
Date:05/19/26
The score is held down primarily by deteriorating financial quality (margin compression, higher leverage, and negative operating/free cash flow). Technical indicators also point to weak momentum with the stock below longer-term moving averages. Valuation further pressures the score due to an exceptionally high P/E and no dividend support.
Positive Factors
Revenue Growth
Sustained ~21% top-line growth in 2025 indicates durable demand for Headwaters' AI products and services. Persistent revenue expansion supports scale economics, continued investment in R&D and sales, and creates runway to convert customers into larger, repeat engagements over multiple quarters.
Negative Factors
Profitability Compression
A collapse in net margin from ~9.4% to ~1.5% signals rising costs or loss of operating leverage despite revenue growth. If structural cost pressures or lower realizations persist, sustainable earnings generation will be impaired and it may take multiple quarters to restore prior profitability levels.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue Growth
Sustained ~21% top-line growth in 2025 indicates durable demand for Headwaters' AI products and services. Persistent revenue expansion supports scale economics, continued investment in R&D and sales, and creates runway to convert customers into larger, repeat engagements over multiple quarters.
Read all positive factors
Headwaters Co., Ltd. (4011) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥11.75B
Dividend YieldN/A
Average Volume (3M)23.83K
Price to Earnings (P/E)82.8
Beta (1Y)1.38
Revenue Growth50.61%
EPS Growth-44.96%
CountryJP
Employees240
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)31.45
Shares Outstanding6,111,553
10 Day Avg. Volume32,270
30 Day Avg. Volume23,833
Financial Highlights & Ratios
PEG Ratio-2.36
Price to Book (P/B)8.06
Price to Sales (P/S)2.75
P/FCF Ratio-176.84
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Headwaters Co., Ltd. Business Overview & Revenue Model
Company Description
Headwaters Co.,Ltd is a Japanese firm primarily focused on designing and implementing artificial intelligence (AI) solutions. Beyond AI development, their comprehensive services encompass supporting digital transformation efforts, managing AI plat...
How the Company Makes Money
Headwaters Co., Ltd. generates revenue primarily through the sale of AI-based software products and services. It earns income from consulting fees for providing digital transformation solutions to clients. Additionally, the company collaborates wi...
Headwaters Co., Ltd. Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
49
Neutral
Cash Flow
34
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.21B | 3.90B | 2.91B | 2.32B | 1.57B | 1.17B |
| Gross Profit | 1.36B | 1.73B | 1.24B | 855.09M | 645.54M | 524.26M |
| EBITDA | 100.48M | 256.72M | 327.00M | 110.03M | 121.43M | 70.87M |
| Net Income | 119.39M | 57.66M | 272.79M | 70.68M | 75.14M | 27.04M |
Balance Sheet | ||||||
| Total Assets | 1.66B | 3.85B | 1.81B | 1.29B | 1.17B | 973.21M |
| Cash, Cash Equivalents and Short-Term Investments | 833.10M | 625.14M | 843.23M | 897.90M | 818.61M | 765.55M |
| Total Debt | 0.00 | 1.90B | 0.00 | 0.00 | 0.00 | 0.00 |
| Total Liabilities | 448.06M | 2.50B | 534.95M | 332.58M | 293.80M | 172.91M |
| Stockholders Equity | 1.20B | 1.33B | 1.27B | 958.44M | 875.44M | 800.30M |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | -60.64M | 117.83M | 71.44M | 43.41M | 45.34M |
| Operating Cash Flow | 0.00 | -38.71M | 144.41M | 87.66M | 84.27M | 48.08M |
| Investing Cash Flow | 0.00 | -2.09B | -210.97M | -13.48M | -31.21M | -52.78M |
| Financing Cash Flow | 0.00 | 1.91B | 10.25M | 5.40M | 0.00 | 16.75M |
Headwaters Co., Ltd. Technical Analysis
Negative
2887.00
Price Trends
2232.00
Negative
2491.62
Negative
2930.07
Negative
Market Momentum
-71.25
Positive
38.38
Neutral
12.72
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4011, the sentiment is Negative. The current price of 2887 is above the 20-day moving average (MA) of 2247.65, above the 50-day MA of 2232.00, and below the 200-day MA of 2930.07, indicating a bearish trend. The MACD of -71.25 indicates Positive momentum. The RSI at 38.38 is Neutral, neither overbought nor oversold. The STOCH value of 12.72 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4011.
Headwaters Co., Ltd. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | ¥3.04B | 22.04 | ― | ― | 21.42% | -14.33% | |
66 Neutral | ¥6.63B | 24.14 | ― | 0.57% | 32.11% | -0.12% | |
63 Neutral | ¥4.62B | 26.41 | ― | ― | 6.84% | -67.48% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | ¥5.93B | 13.61 | ― | ― | 18.87% | ― | |
58 Neutral | ¥11.68B | 24.09 | ― | ― | 12.68% | ― | |
43 Neutral | ¥11.75B | 82.78 | ― | ― | 50.61% | -44.96% |
* Technology Sector Average
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Headwaters Co., Ltd. Corporate Events
Headwaters Reshapes AI Business Into Platform Model After Merger
Jun 5, 2026
Headwaters Co., Ltd. is restructuring its operations around an AI platform model, breaking its former single AI solutions segment into three focused businesses: Enterprise AI Solutions, AI Workflow Engineering, and DATA AI Engine. This reorganiza...
Headwaters Swings Back to Profit and Lifts Full-Year Outlook After Q1 Surge
Jun 5, 2026
Headwaters Co., Ltd. reported a strong rebound in the first quarter of fiscal 2026, with net sales surging 70.8% year on year to ¥1,262 million and turning last year’s loss into a profit attributable to owners of parent of ¥12 mill...
Headwaters Outlines FY2025 Results, FY2026 Outlook and BBD Initiative Merger
Apr 1, 2026
Headwaters Co., Ltd., a listed technology-focused company (securities code 4011), reports on its consolidated results of operations for fiscal year 2025 and provides forecasts for fiscal year 2026. The release outlines the company’s performa...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.