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Headwaters Co., Ltd. (JP:4011)
:4011
Japanese Market

Headwaters Co., Ltd. (4011) AI Stock Analysis

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JP

Headwaters Co., Ltd.

(4011)

Rating:67Neutral
Price Target:
Headwaters Co., Ltd. is well-positioned with strong financial performance, highlighted by significant revenue growth and a robust balance sheet with no debt. However, the valuation appears stretched, and technical indicators suggest potential volatility. These factors balance out to an overall stock score reflecting moderate confidence in the company's near-term prospects.

Headwaters Co., Ltd. (4011) vs. iShares MSCI Japan ETF (EWJ)

Headwaters Co., Ltd. Business Overview & Revenue Model

Company DescriptionHeadwaters Co.,Ltd engages in planning and developing artificial intelligence (AI) applications in Japan. It is also involved in the digital transformation, AI platform operation, cloud service operation, cloud robotics service, and robot application production activities. The company was founded in 2005 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyHeadwaters Co., Ltd. makes money primarily through the sale of its AI solutions and services. The company's revenue streams include licensing fees from its proprietary AI software, custom AI solution development for specific client needs, and ongoing service contracts for AI implementation and maintenance. Additionally, Headwaters Co., Ltd. may engage in strategic partnerships with other technology firms to expand its market reach and enhance its product offerings, thereby driving further revenue growth. These partnerships can also lead to joint ventures or collaborative projects where revenue is shared based on mutual agreements.

Headwaters Co., Ltd. Financial Statement Overview

Summary
Headwaters Co., Ltd. exhibits strong financial health, driven by a 25.5% revenue growth and enhanced profitability with a net profit margin of 9.4%. The balance sheet is robust, featuring no debt and a high equity ratio of 70.3%. Although cash flow generation is solid, the cash conversion efficiency requires improvement, as indicated by the operating cash flow to net income ratio of 0.53.
Income Statement
85
Very Positive
Headwaters Co., Ltd. has demonstrated impressive revenue growth with a 25.5% increase from the previous year, indicating strong demand for its offerings. The gross profit margin stands at 42.6%, reflecting efficient cost management. Net profit margin has improved to 9.4%, showcasing enhanced profitability. However, the EBIT margin of 10.6% suggests room for operational improvements. Despite this, the EBITDA margin of 11.3% highlights strong cash generation from operations.
Balance Sheet
90
Very Positive
The company maintains a robust balance sheet with no debt, resulting in a favorable debt-to-equity ratio of 0. The equity ratio of 70.3% indicates a strong capital structure. Return on Equity (ROE) has improved to 21.5%, demonstrating effective utilization of shareholder funds. The absence of leverage minimizes financial risks, positioning the company for sustainable growth.
Cash Flow
78
Positive
Free cash flow has grown by 65.2%, reflecting better cash management. The operating cash flow to net income ratio of 0.53 suggests a need to enhance cash conversion efficiency. The free cash flow to net income ratio of 0.43 indicates that a significant portion of earnings is being converted into free cash flow, although further improvement is desirable.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.91B2.32B1.57B1.17B1.15B
Gross Profit1.24B855.09M645.54M524.26M547.95M
EBITDA327.00M110.03M118.33M70.87M161.91M
Net Income272.79M70.68M75.14M27.04M153.12M
Balance Sheet
Total Assets1.80B1.29B1.17B973.21M936.91M
Cash, Cash Equivalents and Short-Term Investments843.23M897.90M818.61M765.55M753.50M
Total Debt0.000.000.000.000.00
Total Liabilities527.79M332.58M293.80M172.91M180.40M
Stockholders Equity1.27B958.44M875.44M800.30M756.51M
Cash Flow
Free Cash Flow117.83M71.44M43.41M45.34M172.21M
Operating Cash Flow144.41M87.66M84.27M48.08M179.36M
Investing Cash Flow-210.97M-13.48M-31.21M-52.78M-8.98M
Financing Cash Flow10.25M5.40M0.0016.75M180.47M

Headwaters Co., Ltd. Technical Analysis

Technical Analysis Sentiment
Negative
Last Price3770.00
Price Trends
50DMA
3589.10
Positive
100DMA
3874.65
Negative
200DMA
4458.35
Negative
Market Momentum
MACD
139.71
Positive
RSI
49.39
Neutral
STOCH
8.28
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 3770 is below the 20-day moving average (MA) of 3812.75, above the 50-day MA of 3589.10, and below the 200-day MA of 4458.35, indicating a neutral trend. The MACD of 139.71 indicates Positive momentum. The RSI at 49.39 is Neutral, neither overbought nor oversold. The STOCH value of 8.28 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

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
¥11.44B13.13
4.32%6.70%59.13%
67
Neutral
¥14.32B88.21
25.52%282.24%
63
Neutral
$34.04B6.14-11.52%1.82%5.53%-18.79%
62
Neutral
¥10.75B31.79
1.88%12.79%-50.86%
48
Neutral
¥13.00B
18.30%40.19%
46
Neutral
¥11.68B
5.42%-519.44%
45
Neutral
¥10.82B
45.82%-6.97%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4011
Headwaters Co., Ltd.
3,770.00
-1,895.00
-33.45%
JP:3823
WHY HOW DO COMPANY,Inc.
104.00
71.00
215.15%
JP:3937
Ubicom Holdings. Inc.
925.00
-459.28
-33.18%
JP:4169
Enechange Ltd.
305.00
67.00
28.15%
JP:4193
Fabrica Holdings Co.Ltd.
1,964.00
64.52
3.40%
JP:4425
Kudan, Inc.
1,035.00
-993.00
-48.96%
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.Date of analysis: Apr 23, 2025