rakumo Inc. (4060) AI Stock Analysis

• Market Cap: ¥6.02B
• Dividend Yield: 0.57%
• Average Volume (3M): 35.65K
• Price to Earnings (P/E): 21.4
• Beta (1Y): 0.55
• 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: ¥1,156.00 ▲(15.37% 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 revenue model

rakumo’s subscription SaaS model and complementary implementation/support services generate recurring, predictable revenue and high customer lifetime value. Per-user pricing and partner/marketplace channels support scalable acquisition, retention and cross-sell, underpinning durable revenue visibility and long-term cash stability.

High software-like margins

Sustained high gross (~70%) and strong operating (~23%) margins reflect scalable, low-marginal-cost software economics. These margins support reinvestment in product and go-to-market while preserving robust cash generation as revenue scales, creating a durable profitability base and competitive cost advantage.

Strong cash generation

Improving operating cash flow and free cash flow near parity with net income indicate high-quality earnings and strong internal funding ability. Reliable cash conversion supports capital allocation flexibility for product investment, debt servicing, or strategic initiatives over the medium term.

Negative Factors

Rising leverage

The material increase in leverage reduces balance-sheet flexibility and raises fixed obligations. Higher debt heightens vulnerability to slower growth or rate increases, constrains strategic optionality like M&A or buybacks, and increases refinancing and interest-rate risk over the coming months.

Weaker net margin conversion

A decline in net margin despite solid operating margins implies rising non-operating costs, taxes, or one-off items that erode retained earnings. Reduced profit conversion limits internal funding for growth initiatives and makes long-term EPS and dividend trajectory more sensitive to cost and tax fluctuations.

Variable cash-to-revenue conversion

The drop in operating cash flow as a share of revenue signals variability in cash conversion, potentially from working-capital swings or timing effects. This increases forecasting uncertainty and weakens the short-term liquidity cushion, making durable cash generation less predictable.

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 primarily makes money by selling cloud software on a recurring subscription basis (SaaS). Customers (generally businesses and organizations) pay ongoing usage fees—typically priced per user/seat and billed monthly or annually—to use rakumo’s applications that work with Google Workspace. In addition to subscription revenue, the company earns service revenue from activities tied to adoption and ongoing operation of its products, such as initial setup/implementation assistance, customization/configuration where offered, and customer support/maintenance services. Where sales are conducted through partners or marketplaces related to Google Workspace, partner-led sales and distribution can contribute to customer acquisition and recurring subscription billings; however, specific partner names, fee splits, or segment-by-segment revenue amounts are null.

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	528.95M	579.38M	487.16M	378.29M	275.08M	273.81M
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	625.84M	571.03M
Stockholders Equity	1.74B	1.89B	1.63B	1.37B	1.15B	947.95M
Cash Flow
Free Cash Flow	0.00	507.96M	459.03M	346.51M	273.02M	282.58M
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: Negative
• Last Price: 1002.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4060, the sentiment is Negative. The current price of 1002 is below the 20-day moving average (MA) of 1099.35, below the 50-day MA of 1079.72, and below the 200-day MA of 1065.11, indicating a bearish trend. The MACD of -13.76 indicates Positive momentum. The RSI at 40.24 is Neutral, neither overbought nor oversold. The STOCH value of 16.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥6.02B	21.40	―	0.57%	21.03%	32.29%
4397	68 Neutral	¥6.79B	27.15	―	―	11.32%	―
4168	67 Neutral	¥8.91B	11.67	―	0.70%	9.78%	-23.98%
5033	66 Neutral	¥4.86B	21.99	―	―	7.60%	19.13%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4448	58 Neutral	¥11.75B	74.58	―	―	14.63%	-760.87%
3976	54 Neutral	¥2.26B	-91.39	―	―	-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.