Appirits Inc. (4174) AI Stock Analysis

• Market Cap: ¥2.61B
• Dividend Yield: 3.41%
• Average Volume (3M): 9.89K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.56
• Revenue Growth: 18.78%
• EPS Growth: -134.64%
• Country: JP
• Employees: 720
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): N/A
• Shares Outstanding: 4,196,562
• 10 Day Avg. Volume: 3,780
• 30 Day Avg. Volume: 9,890
• PEG Ratio: <0.01
• Price to Book (P/B): 1.43
• Price to Sales (P/S): 0.27
• P/FCF Ratio: -50.74
• 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: 41 Neutral
• Price Target: ¥601.00 ▼(-7.68% Downside)
• Action: Reiterated Date: 03/19/26
• Date: Action: Reiterated 03/19/26

The score is primarily held down by weakening fundamentals—margin compression, a return to losses, higher leverage, and deteriorating operating/free cash flow. Technicals add further pressure with a clear downtrend and negative momentum. A relatively high dividend yield offers some support, but the negative P/E underscores the profitability challenges.

Positive Factors

Consistent Revenue Growth

Sustained top-line growth across multiple years indicates continued client demand for cloud SI and managed services, providing a durable revenue base. Persistent revenue expansion supports reinvestment in product capability, scale benefits in sales/marketing, and long-term strategic planning even as margins vary.

Recurring Managed-Service Revenue

A business model combining project work with recurring managed services creates customer stickiness and predictable revenue streams. Recurring fees improve visibility into future cash flows, enable upsell/cross-sell of cloud services, and support higher lifetime customer value compared with pure project-only firms.

Balance Sheet Not Distressed

Despite rising leverage, the company’s assets are relatively stable and balance-sheet distress is not evident. This provides financial flexibility to manage operations, access capital if needed, and execute on cloud projects while management focuses on restoring profitability and cash generation.

Negative Factors

Margin Compression

A sharp decline in gross margin halved per-revenue profitability, eroding the economics of both project and managed-service work. Sustained compression reduces cash available for R&D and sales, heightens sensitivity to revenue swings, and undermines long-term return on invested capital unless margins recover.

Weakening Cash Generation

Turning operating cash flow negative and multi-year negative free cash flow signal weakening cash-earnings quality and potential working-capital stress. Persisting cash deficits force reliance on external financing, constrain capital allocation, and increase vulnerability to funding cost rises or tighter credit conditions.

Rising Financial Leverage

Leverage approaching parity with equity materially increases financial risk: higher interest and principal obligations reduce flexibility, amplify earnings volatility, and limit ability to invest or sustain dividends. Elevated leverage also raises refinancing and covenant risks if profitability and cash flow remain weak.

Appirits Inc. Business Overview & Revenue Model

Company Description

Appirits Inc. develops and sells web services and related consulting services. Its services also cover infrastructure construction, maintenance, and monitoring of various web service systems; contract development of various web service systems; and planning, design, development, and operation of online games. In addition, its solutions include AWS implementation design/development, Smartphone application development, EC order/inventory centralized management ASP, and in-site search ASP. Further, it provides web marketing design services, such as UX and UI design and production, and SEO and SEM consulting services, as well as Google Analytics data solutions, training, and support desk services; smartphone-enabled and app development services; security services, including security, web application, platform, and smartphone application diagnostics services, as well as software testing and cloud based web application firewall services; and dispatch and staffing services. Appirits Inc. was founded in 2000 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Appirits primarily makes money by charging corporate and institutional clients for (1) contracted development and system integration work (e.g., building or migrating systems and applications to cloud environments), and (2) ongoing operational/maintenance and managed services for the systems it supports. Revenue is typically generated through project-based fees for implementation (one-time or milestone-based) and recurring fees for continuous operation, monitoring, and support. null

Appirits Inc. Financial Statement Overview

Summary

Despite consistent revenue growth, profitability and cash generation deteriorated sharply: gross margin fell materially, 2026 shifted to operating losses and a sizable net loss, leverage rose to roughly debt-to-equity ~1.0, and operating cash flow turned slightly negative with mostly negative free cash flow in the last two years.

Income Statement

Revenue has grown consistently year-over-year (from 2021 through 2026 annual reports), but profitability has deteriorated sharply. Gross margin trended down meaningfully (about 30% in 2021 to ~16% in 2026), and the company swung from solid operating profitability in 2023–2024 to operating losses in 2026 (negative EBIT and EBITDA) with a sizable net loss. The combination of continued top-line growth but weakening margins and a return to losses weighs heavily on the income statement quality.

Balance Sheet

Financial leverage has increased substantially over the period: debt rose while equity declined in the latest year, pushing debt to roughly parity with equity in 2026 (debt-to-equity ~1.0 versus much lower levels in 2021–2024). Total assets are relatively stable, but the latest year shows negative returns for shareholders (negative return on equity in 2026), reflecting the earnings downturn. The balance sheet is not distressed, but the direction of leverage and profitability is a clear risk.

Cash Flow

Cash generation has weakened materially versus earlier years. Operating cash flow was strong in 2022–2024 but fell sharply in 2025 and turned slightly negative in 2026, indicating reduced cash earnings quality and/or working-capital pressure. Free cash flow has also been volatile and mostly negative in the last two years (large outflow in 2025 and still negative in 2026), which reduces financial flexibility and increases reliance on external funding if sustained.

Breakdown	TTM	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	9.94B	9.96B	9.01B	8.43B	7.32B	4.80B
Gross Profit	1.96B	1.55B	1.89B	2.03B	1.75B	1.19B
EBITDA	295.83M	-162.89M	300.16M	750.32M	578.39M	240.77M
Net Income	26.33M	-465.33M	45.97M	386.32M	210.21M	109.21M
Balance Sheet
Total Assets	5.72B	5.70B	5.76B	4.59B	4.20B	2.82B
Cash, Cash Equivalents and Short-Term Investments	1.87B	2.12B	2.29B	1.74B	1.82B	1.44B
Total Debt	1.62B	1.87B	1.77B	797.50M	607.50M	312.81M
Total Liabilities	3.38B	3.84B	3.37B	2.12B	2.08B	891.32M
Stockholders Equity	2.34B	1.86B	2.39B	2.47B	2.12B	1.92B
Cash Flow
Free Cash Flow	0.00	-52.32M	-175.24M	207.75M	477.65M	208.81M
Operating Cash Flow	0.00	-4.61M	10.13M	251.69M	535.67M	307.66M
Investing Cash Flow	0.00	-170.10M	-160.99M	-462.81M	-254.91M	-426.43M
Financing Cash Flow	0.00	-6.27M	702.65M	130.88M	102.50M	525.03M

Appirits Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 651.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4174, the sentiment is Negative. The current price of 651 is above the 20-day moving average (MA) of 649.45, below the 50-day MA of 657.05, and below the 200-day MA of 692.03, indicating a bearish trend. The MACD of -6.39 indicates Positive momentum. The RSI at 34.00 is Neutral, neither overbought nor oversold. The STOCH value of 27.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4174.

Appirits Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4168	67 Neutral	¥8.91B	11.67	―	0.70%	9.78%	-23.98%
4255	66 Neutral	¥4.12B	28.86	―	―	12.56%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4424	45 Neutral	¥1.67B	-7.88	―	―	-20.74%	36.84%
4174	41 Neutral	¥2.61B	-5.71	―	3.41%	18.78%	-134.64%
4199	41 Neutral	¥2.55B	-4.15	―	―	-5.44%	-242.43%

Appirits Inc. Corporate Events

Appirits Swings to Loss Despite Higher Sales but Lifts Dividend and Projects Recovery

Appirits Inc. reported consolidated net sales of ¥9.96 billion for the fiscal year ended January 31, 2026, up 10.5% year on year, but swung to an operating loss of ¥309 million and a net loss attributable to owners of the parent of ¥465 million. Profitability ratios deteriorated, with return on equity falling to negative 22.6% and equity-to-asset ratio declining to 31.2%, reflecting weaker earnings and lower net assets despite stable total assets.

Operating cash flow turned slightly negative and investment cash outflows continued, though the company maintained cash and cash equivalents of ¥2.12 billion at year-end, indicating preserved liquidity. Appirits expanded its consolidation scope by adding three subsidiaries and removing one, and despite the loss, raised its annual dividend to ¥28 per share for FY2026 and projects further sales growth and a return to profit in FY2027, signaling a continued commitment to shareholder returns amid a transition period.

The most recent analyst rating on (JP:4174) stock is a Sell with a Yen610.00 price target. To see the full list of analyst forecasts on Appirits Inc. stock, see the JP:4174 Stock Forecast page.