rakumo Inc. (4060) AI Stock Analysis

• Market Cap: ¥6.87B
• Dividend Yield: 0.57%
• Average Volume (3M): 35.65K
• Price to Earnings (P/E): 25.2
• Beta (1Y): 0.51
• Revenue Growth: 21.03%
• EPS Growth: 32.29%
• Country: JP
• Employees: 96
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 13.33
• Shares Outstanding: 5,829,500
• 10 Day Avg. Volume: 28,050
• 30 Day Avg. Volume: 35,650
• PEG Ratio: 3.07
• Price to Book (P/B): 3.09
• Price to Sales (P/S): 3.18
• P/FCF Ratio: 11.47
• 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: 74 Outperform
• Price Target: ¥1,281.00 ▲(27.84% Upside)
• Action: Upgraded Date: 02/18/26
• Date: Action: Upgraded 02/18/26

The score is driven primarily by strong financial performance (accelerating growth, strong margins, and solid cash generation). Technicals also support the rating with an uptrend and positive momentum. Valuation is a modest headwind due to a ~25x P/E and low dividend yield, while increased leverage and softer net margin temper the financial strength.

Positive Factors

Recurring SaaS Model

A subscription SaaS model creates predictable, recurring revenue and higher customer lifetime value. rakumo’s per-user/seat billing and add-on services (implementation, support) support durable cash flow, upsell opportunities, and improved revenue visibility over multiple quarters.

Sustained & Accelerating Revenue Growth

Consistent multi-year growth with clear acceleration in 2025 indicates expanding market penetration and product traction. That trend supports operating leverage, scale benefits in a software model, and gives management room to invest in product and go‑to‑market for continued durable top‑line expansion.

Strong Cash Generation

Improving operating cash flow and FCF near net income signal high earnings quality and low reinvestment burden. Reliable cash conversion supports reinvestment, debt servicing, and shareholder returns, and strengthens the company’s capacity to fund product development and partner-led distribution long term.

Negative Factors

Rising Leverage

A sharp increase in leverage reduces financial flexibility and raises refinancing and interest-rate risks. For a growth-oriented software firm, higher debt can constrain strategic initiatives, increase fixed costs, and amplify downside in slower revenue periods, tempering balance-sheet resilience.

Compression in Net Margin

Declining net margin signals weaker profit conversion despite healthy gross and operating margins. This may reflect higher taxes, financing costs, or non‑operating items and reduces retained earnings availability for growth or deleveraging, making earnings less resilient through shocks.

Cash Conversion Variability

Year‑to‑year swings in cash conversion highlight working capital or timing variability, which can challenge runway planning. For a subscription business, inconsistent cash conversion reduces predictability of funds for capex, partner investments, or debt reduction over multiple quarters.

rakumo Inc. Business Overview & Revenue Model

Company Description

rakumo Inc. develops and sells cloud-based extension tools in Tokyo, Japan. Its products include rakumo for Google Workspace, a cloud-based extension tool for attendance management, reimbursement solution, workflow approvals, in-house portal, schedule management, and contact information of Google Workspace; and rakumo for Salesforce, a cloud extension tool that includes rakumo Social Scheduler, which analyses behavior of daily activities, as well as rakumo Sync that synchronizes between salesforce and Google Calendar schedule in real time. The company is also involved in the sale of information and communication equipment and software; and provision of support services. rakumo Inc. was incorporated in 2004 and is headquartered in Tokyo, Japan. rakumo Inc. is a subsidiary of Netyear Group Corporation.

How the Company Makes Money

rakumo Inc. generates revenue through a subscription-based model, offering tiered pricing plans for its software solutions. This model allows businesses to pay a recurring fee for access to its applications, which are regularly updated with new features. Key revenue streams include monthly and annual subscription fees from its diverse customer base, which ranges from small businesses to large enterprises. Additionally, the company may benefit from strategic partnerships with other tech firms to integrate its services, thus expanding its market reach and enhancing its product offerings. Furthermore, rakumo Inc. may also earn revenue through professional services such as training and support, which assist clients in maximizing the use of its tools.

rakumo Inc. Financial Statement Overview

Summary

Strong and accelerating revenue growth through 2025 with software-like profitability (high gross margin ~70% and solid operating margin ~23%) and improving operating/free cash flow. Score is moderated by the sharp rise in leverage in 2025 (higher debt-to-equity) and a dip in net margin, which increases financial risk despite healthy operations.

Income Statement

Revenue has grown consistently from 2020–2025, with a strong acceleration in 2025 (+18.18% vs. +11.42% in 2024). Profitability is solid for a software model: 2025 gross margin is high (~70%) and operating margin remains strong (~23%), while EBITDA margin is healthy (~32%). A key watch-out is profit conversion: net margin dipped in 2025 (~14.9%) from 2024 (~17.5%), indicating higher costs/taxes/other items are pressuring bottom-line leverage despite good operating performance.

Balance Sheet

The balance sheet shows a noticeable increase in leverage: debt-to-equity rose to ~0.64 in 2025 from ~0.31 in 2024 (and very low levels in 2020–2022), suggesting a more aggressive capital structure. Offsetting this, equity has grown steadily and returns on equity have remained fairly consistent in the mid-teens (~14–16%), supporting the view that profitability is still healthy. Main risk is reduced balance-sheet flexibility versus prior years given the step-up in debt.

Cash Flow

Cash generation is strong and improving: operating cash flow increased to ~¥511M in 2025 from ~¥463M in 2024, and free cash flow closely tracks operating cash flow (indicating low reinvestment burden). Free cash flow quality is good, running at ~99% of net income in both 2024 and 2025, which supports earnings credibility. The main weakness is that operating cash flow relative to revenue is moderate (~46% in 2025 vs. ~56% in 2024), showing some year-to-year variability in cash conversion.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.55B	1.83B	1.44B	1.30B	1.10B	963.78M
Gross Profit	1.06B	1.29B	951.21M	831.79M	697.03M	599.50M
EBITDA	528.22M	579.38M	487.16M	373.35M	266.51M	240.27M
Net Income	290.59M	272.31M	253.03M	196.43M	184.55M	188.75M
Balance Sheet
Total Assets	3.31B	4.17B	3.04B	2.67B	1.78B	1.52B
Cash, Cash Equivalents and Short-Term Investments	2.54B	1.82B	2.28B	1.89B	1.44B	1.29B
Total Debt	500.00M	1.22B	500.00M	510.00M	50.00M	64.98M
Total Liabilities	1.56B	2.28B	1.40B	1.31B	624.11M	569.14M
Stockholders Equity	1.74B	1.89B	1.63B	1.37B	1.15B	947.95M
Cash Flow
Free Cash Flow	0.00	507.96M	459.39M	293.39M	226.79M	232.65M
Operating Cash Flow	0.00	510.98M	463.42M	351.73M	275.03M	286.07M
Investing Cash Flow	0.00	-1.58B	-70.78M	-357.87M	-92.27M	-53.42M
Financing Cash Flow	0.00	606.49M	-3.70M	455.61M	-47.29M	11.22M

rakumo Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1002.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4060, the sentiment is Positive. The current price of 1002 is below the 20-day moving average (MA) of 1120.30, below the 50-day MA of 1059.66, and below the 200-day MA of 1048.58, indicating a bullish trend. The MACD of 29.05 indicates Negative momentum. The RSI at 62.09 is Neutral, neither overbought nor oversold. The STOCH value of 38.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4060.

rakumo Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4060	74 Outperform	¥6.87B	25.18	―	0.57%	21.03%	32.29%
4397	68 Neutral	¥7.04B	17.46	―	―	11.32%	―
4168	67 Neutral	¥9.81B	10.50	―	0.70%	9.78%	-23.98%
5033	66 Neutral	¥4.93B	13.38	―	―	7.60%	19.13%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4448	58 Neutral	¥13.02B	60.03	―	―	14.63%	-760.87%
3976	54 Neutral	¥2.40B	-11.69	―	―	-14.55%	-8.13%

rakumo Inc. Corporate Events

Rakumo lifts dividend as cloud software growth drives strong 2025 results and upbeat 2026 outlook

Rakumo Inc. reported strong results for the year ended Dec. 31, 2025, with net sales rising 26.8% to ¥1.83 billion and operating profit up 11.6% to ¥428 million, while profit attributable to owners of parent increased 7.6% to ¥272 million. Although profitability ratios such as operating margin and return on equity edged down, the company expanded its asset base and maintained solid earnings per share.

The company strengthened shareholder returns, lifting its annual dividend from ¥6 to ¥9 per share for 2025 and projecting a further increase to ¥14 in 2026, implying a higher payout ratio. For the year ending Dec. 31, 2026, Rakumo forecasts another year of robust growth, guiding for a 27.3% jump in net sales to ¥2.33 billion and a 28.5% rise in operating profit, signaling confidence in sustained demand for its cloud services despite higher investment and changes in consolidation scope.

The most recent analyst rating on (JP:4060) stock is a Hold with a Yen1146.00 price target. To see the full list of analyst forecasts on rakumo Inc. stock, see the JP:4060 Stock Forecast page.