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

• Market Cap: ¥13.35B
• Dividend Yield: N/A
• Average Volume (3M): 22.80K
• Price to Earnings (P/E): 81.0
• Beta (1Y): 1.82
• Revenue Growth: 25.52%
• EPS Growth: 282.24%
• Country: JP
• Employees: 240
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): -5.43
• Shares Outstanding: 3,799,344
• 10 Day Avg. Volume: 25,300
• 30 Day Avg. Volume: 22,796
• PEG Ratio: 0.12
• Price to Book (P/B): 1.87
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 37.79
• 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

• Rating: 67 Neutral
• 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. Business Overview & Revenue Model

Company Description

Headwaters Co., Ltd. (4011) is a technology company that specializes in the development and provision of artificial intelligence (AI) solutions. The company operates in the tech sector, focusing on creating innovative AI applications and services that cater to a wide range of industries, including but not limited to manufacturing, logistics, and retail. Headwaters Co., Ltd. aims to enhance operational efficiency and decision-making processes for its clients through cutting-edge AI technologies.

How the Company Makes Money

Headwaters 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

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

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

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.91B	2.32B	1.57B	1.17B	1.15B
	Gross Profit
1.24B	855.09M	645.54M	524.26M	547.95M
	EBIT
307.95M	94.86M	110.02M	91.41M	169.53M
	EBITDA
327.00M	110.03M	118.33M	70.87M	161.91M
	Net Income Common Stockholders
272.79M	70.68M	75.14M	27.04M	153.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
843.23M	897.90M	818.61M	765.55M	753.50M
	Total Assets
1.80B	1.29B	1.17B	973.21M	936.91M
	Total Debt
0.00	0.00	0.00	0.00	0.00
	Net Debt
-843.00M	-897.90M	-818.61M	-765.55M	-753.50M
	Total Liabilities
527.79M	332.58M	293.80M	172.91M	180.40M
	Stockholders Equity
1.27B	958.44M	875.44M	800.30M	756.51M
Cash Flow		Free Cash Flow
117.83M	71.44M	43.41M	45.34M	172.21M
	Operating Cash Flow
144.41M	87.66M	84.27M	48.08M	179.36M
	Investing Cash Flow
-210.97M	-13.48M	-31.21M	-52.78M	-8.98M
	Financing Cash Flow
10.25M	5.40M	0.00	16.75M	180.47M

Headwaters Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3515.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4011, the sentiment is Neutral. The current price of 3515 is above the 20-day moving average (MA) of 3321.50, above the 50-day MA of 3472.50, and below the 200-day MA of 4553.32, indicating a neutral trend. The MACD of -35.36 indicates Negative momentum. The RSI at 52.57 is Neutral, neither overbought nor oversold. The STOCH value of 76.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4011.

Headwaters Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3983	78 Outperform	¥42.34B	22.48		1.09%	8.10%	0.69%
3683	76 Outperform	¥14.60B	17.00		1.23%	6.22%	29.99%
4483	68 Neutral	¥251.04B	34.49		0.42%	28.85%	54.60%
4011	67 Neutral	¥13.35B	80.95		―	25.52%	282.24%
Sector *	62 Neutral	$11.93B	10.60	-7.51%	3.00%	7.40%	-8.09%
3994	53 Neutral	€259.39B	―	-17.75%	―	28.35%	-2.49%
4433	48 Neutral	¥16.40B	―		3.92%	-1.10%	-102.34%