HEROZ, Inc. (4382) AI Stock Analysis

• Market Cap: ¥12.50B
• Dividend Yield: N/A
• Average Volume (3M): 86.28K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.02
• Revenue Growth: 16.29%
• EPS Growth: 93.98%
• Country: JP
• Employees: 256
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -2.31
• Shares Outstanding: 15,209,725
• 10 Day Avg. Volume: 78,110
• 30 Day Avg. Volume: 86,280
• PEG Ratio: 0.95
• Price to Book (P/B): 3.07
• Price to Sales (P/S): 2.40
• P/FCF Ratio: 107.89
• 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: 52 Neutral
• Price Target: ¥830.00 ▼(-3.15% Downside)
• Action: Reiterated Date: 01/16/26
• Date: Action: Reiterated 01/16/26

The score is held back primarily by weak profitability and negative free cash flow despite solid revenue growth and a relatively sound balance sheet. Technicals are moderately supportive in the short term (above 20/50DMA with elevated RSI/Stoch) but the longer-term trend remains below the 100/200DMA. Valuation is unattractive/unclear due to a highly negative P/E and no dividend yield data.

Positive Factors

AI-focused business model

HEROZ's core business is AI technology and solutions, and its monetization includes project fees, ongoing operating fees, and subscription/usage products. That positioning supports durable demand from enterprises digitizing workflows and creates multiple recurring revenue levers over the medium term.

Consistent revenue growth

Reported top-line growth (~11.2% year) indicates continued commercial traction for HEROZ's AI offerings. Sustained revenue expansion supports scale economics, investment in R&D and client deployments, and demonstrates that product-market fit is progressing across corporate customers over the coming months.

Manageable leverage and strong equity base

Balance-sheet shows moderate leverage (D/E ~0.44) and a high proportion of equity financing, providing financial flexibility. A stronger equity ratio gives room for continued R&D or deployments without immediate refinancing pressure, supporting medium-term strategic initiatives.

Negative Factors

Negative profitability

Persistent negative margins and a falling EBIT margin signal the business has yet to translate revenue growth into sustainable profits. Over 2–6 months this limits reinvestment capacity, reduces retained earnings available for scaling, and raises execution risk on achieving durable unit economics.

Negative free cash flow

A negative free cash flow profile and poor conversion of earnings to cash indicate HEROZ struggles to generate internal liquidity. This structural cash shortfall constrains funding for customer deployments and R&D, and increases reliance on external financing if losses persist over the medium term.

Negative ROE and rising leverage

Negative ROE shows the company is not earning adequate returns on shareholder capital, while a rising D/E ratio signals increasing leverage. Together these reduce capital efficiency and raise financial risk, especially given weak cash generation and profitability headwinds.

HEROZ, Inc. Business Overview & Revenue Model

Company Description

HEROZ, Inc. engages in planning, developing, and operating of intellectual games for smartphones in Japan and internationally. It uses its artificial intelligence technology to develop various smartphone apps, such as Shogi Wars, CHESS HEROZ, and BackgammonAce. The company was incorporated in 2009 and is based in Tokyo, Japan.

How the Company Makes Money

HEROZ primarily earns revenue by providing AI-related services and solutions to businesses. Its monetization typically involves (1) project-based fees for designing, developing, and implementing AI systems (e.g., building models, integrating them into client workflows, and delivering proof-of-concept through production deployments), (2) ongoing fees for operating and maintaining delivered AI solutions (e.g., model monitoring, updates, and system support), and (3) revenue from AI products or platforms offered on a subscription or usage-fee basis when applicable. Specific breakdowns of revenue streams, named major customers, and partnership-driven revenue contributions are null.

HEROZ, Inc. Financial Statement Overview

Summary

Revenue grew 11.2%, but profitability is weak (net margin -3.0% and declining EBIT margin). Balance sheet is relatively solid with manageable leverage (debt-to-equity 0.44) but negative ROE (-3.8%). Cash flow is the main drag with negative free cash flow and weak conversion of earnings to cash.

Income Statement

HEROZ, Inc. has shown a positive revenue growth rate of 11.2% in the latest year, indicating a strong top-line performance. However, the company is struggling with profitability, as evidenced by a negative net profit margin of -3.0% and a declining EBIT margin. The gross profit margin has decreased slightly, which may suggest rising costs or pricing pressures.

Balance Sheet

The company's debt-to-equity ratio has increased to 0.44, indicating a rise in leverage, but it remains at a manageable level. The return on equity is negative at -3.8%, reflecting the company's current unprofitability. However, the equity ratio is strong, suggesting a solid capital structure with a high proportion of equity financing.

Cash Flow

HEROZ, Inc. faces challenges in cash flow management, with a negative free cash flow and a concerning free cash flow to net income ratio of -0.91. The operating cash flow to net income ratio is low, indicating potential issues in converting earnings into cash. The free cash flow growth rate is not meaningful due to negative values.

Breakdown	TTM	Apr 2025	Apr 2024	Apr 2023	Apr 2022	Apr 2021
Income Statement
Total Revenue	6.04B	5.93B	4.84B	2.98B	1.48B	1.56B
Gross Profit	2.71B	2.69B	2.39B	1.35B	553.36M	699.13M
EBITDA	788.12M	723.27M	797.93M	509.91M	187.51M	375.40M
Net Income	-143.50M	-177.71M	-1.13B	-574.33M	49.40M	207.15M
Balance Sheet
Total Assets	8.09B	8.19B	7.69B	8.67B	6.66B	6.55B
Cash, Cash Equivalents and Short-Term Investments	1.41B	3.15B	2.74B	3.80B	3.66B	5.55B
Total Debt	1.93B	2.05B	1.40B	1.50B	0.00	0.00
Total Liabilities	2.83B	2.99B	2.55B	2.59B	219.21M	143.50M
Stockholders Equity	4.63B	4.64B	4.79B	5.87B	6.44B	6.40B
Cash Flow
Free Cash Flow	0.00	132.13M	316.48M	460.41M	194.52M	-18.82M
Operating Cash Flow	0.00	219.03M	464.00M	483.38M	198.15M	360.70M
Investing Cash Flow	0.00	-479.27M	-1.21B	-144.47M	-2.09B	-384.52M
Financing Cash Flow	0.00	664.63M	-306.18M	-200.78M	1.00K	15.25M

HEROZ, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 857.00
• 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:4382, the sentiment is Negative. The current price of 857 is above the 20-day moving average (MA) of 833.50, above the 50-day MA of 836.30, and below the 200-day MA of 984.92, indicating a bearish trend. The MACD of 8.65 indicates Negative momentum. The RSI at 46.22 is Neutral, neither overbought nor oversold. The STOCH value of 41.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4382.

HEROZ, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3853	70 Outperform	¥21.10B	12.24	―	0.82%	―	―
5586	65 Neutral	¥12.69B	37.90	―	―	25.41%	9.69%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5572	59 Neutral	¥8.90B	33.78	―	―	60.41%	-27.67%
4476	56 Neutral	¥3.89B	35.15	―	―	10.43%	-65.78%
4382	52 Neutral	¥12.50B	-90.49	―	―	16.29%	93.98%
4425	44 Neutral	¥22.60B	35.20	―	―	36.08%	-7.71%

HEROZ, Inc. Corporate Events

HEROZ Releases FY04/2026 Q3 Financial Results Presentation

HEROZ, Inc. released presentation materials for its FY04/2026 third-quarter financial results dated March 13, 2026, providing investors with an overview of its recent business performance. The document is identified as an excerpt translation from the original Japanese version, with the company clarifying that the Japanese text takes precedence in case of discrepancies, underscoring its primary regulatory and disclosure basis in Japan.

The most recent analyst rating on (JP:4382) stock is a Hold with a Yen769.00 price target. To see the full list of analyst forecasts on HEROZ, Inc. stock, see the JP:4382 Stock Forecast page.

HEROZ Narrows Losses as Profitability Rebounds and Sales Grow Modestly

HEROZ, Inc. reported consolidated net sales of ¥4.69 billion for the nine months ended Jan. 31, 2026, up 7.8% year on year, with EBITDA climbing 46.1% to ¥719 million and operating profit more than doubling to ¥358 million. Ordinary profit surged 189.8% to ¥265 million, and although the company still posted a net loss attributable to owners of the parent of ¥49 million, this represented a significant improvement from the ¥180 million loss a year earlier.

Total assets were broadly flat at ¥8.11 billion while net assets inched up to ¥5.38 billion, keeping the equity ratio stable at around 56%. For the full year to April 30, 2026, HEROZ forecasts net sales of ¥6.4 billion, a 7.9% increase, and expects operating profit of ¥500 million and ordinary profit of ¥420 million, signaling confidence in continued earnings recovery despite maintaining a zero-dividend policy.

The most recent analyst rating on (JP:4382) stock is a Hold with a Yen769.00 price target. To see the full list of analyst forecasts on HEROZ, Inc. stock, see the JP:4382 Stock Forecast page.

HEROZ Forms AI-Focused Capital Alliance With JPYC

HEROZ, Inc. has entered into a business alliance with JPYC Inc., a Japanese issuer of electronic payment instruments tied to fund transfer services, and will take a stake in JPYC by subscribing to its Series B1 preferred shares via a third-party allotment. The partnership aims to embed HEROZ’s AI and AIX expertise into JPYC’s operations, with both companies set to collaborate on developing and implementing AI systems to streamline JPYC’s business and underpin new service offerings, while the capital tie-up is expected to deepen strategic cooperation and support medium- to long-term value creation for both sides.

The most recent analyst rating on (JP:4382) stock is a Hold with a Yen769.00 price target. To see the full list of analyst forecasts on HEROZ, Inc. stock, see the JP:4382 Stock Forecast page.