WingArc1st Inc. (4432) AI Stock Analysis

• Market Cap: ¥94.68B
• Dividend Yield: 2.59%
• Average Volume (3M): 64.00K
• Price to Earnings (P/E): 16.8
• Beta (1Y): 0.67
• Revenue Growth: 5.22%
• EPS Growth: -6.62%
• Country: JP
• Employees: 881
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 42.81
• Shares Outstanding: 35,005,470
• 10 Day Avg. Volume: 48,420
• 30 Day Avg. Volume: 64,003
• PEG Ratio: 2.29
• Price to Book (P/B): 2.86
• Price to Sales (P/S): 4.16
• P/FCF Ratio: 15.31
• 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): 212
• Revenue Forecast (FY): ¥34.40B

• Rating: 66 Neutral
• Price Target: ¥2,754.00 ▼(-9.56% Downside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

Overall score reflects strong underlying financial quality (high margins and low leverage) but is held back materially by very weak technicals (price far below major moving averages and negative MACD). Valuation is reasonable with a solid dividend yield, partially offsetting the downside signals.

Positive Factors

High margins and operating profitability

Sustained high gross and EBIT margins reflect a scalable software model with strong pricing power and low incremental costs. This durable profitability supports reinvestment in product, consistent operating cash generation, and resilience to cyclical revenue swings over the next 2–6 months.

Conservative, improving balance sheet

Material reduction in leverage provides financial flexibility and lowers refinancing risk. A conservative capital structure allows continued investment in R&D, supports dividends or buybacks, and cushions against slower top-line periods, strengthening long-term operational stability.

Recurring revenue and services mix

A mix of subscriptions, maintenance and services creates sticky, recurring cash flows and cross-sell opportunities. This revenue diversity improves predictability, supports customer retention, and underpins margin durability and steady free cash flow over medium-term planning horizons.

Negative Factors

Decelerating revenue growth

Slowing top-line expansion reduces the scope for operating leverage and can pressure future margin expansion. If sustained, the deceleration signals tougher product adoption or increased competitive resistance, limiting long-term EPS and cash-flow growth potential absent new growth initiatives.

Declining free cash flow recently

A notable drop in FCF constrains the company’s ability to fund organic growth, M&A, or shareholder returns without tapping reserves. Even with near-1 conversion historically, recent variability reduces margin for error and increases reliance on sustaining operating performance to finance strategic actions.

Margins off prior-year highs

A decline from prior peak margins may indicate rising costs, pricing pressure, or mix shifts toward lower-margin services. Continued margin erosion would impair cash generation and returns on equity, weakening the company’s ability to invest and maintain shareholder distributions over the medium term.

WingArc1st Inc. Business Overview & Revenue Model

Company Description

WingArc1st Inc. provides software and services to support enterprise information utilization in Japan, China, and rest of the APAC region. The company offers form products, including Super Visual Formade (SVF), a form based solution; SVF Cloud, a cloud service; and SPA/SPA Cloud, an enterprise application solution. It also provides Dr.Sum, a business intelligence platform; MotionBoard, a BI Dashboard for business managers and users; and VyNDEX, a CRM solution. In addition, the company offers solutions for sales dashboard, manufacturing industry, and distribution retail; and realization of digital administration centered on solution data for local governments. Further, it offers consulting and implementation services; and various training courses in data visualization. The company was founded in 1993 and is headquartered in Tokyo, Japan.

How the Company Makes Money

WingArc1st generates revenue primarily through the sale of software licenses and subscription services for its analytics platforms. The company offers both on-premises and cloud-based solutions, allowing businesses to choose the model that best fits their needs. Additionally, WingArc1st earns income from maintenance and support services, as well as consulting services that help organizations implement and optimize their use of the company's software. Strategic partnerships with other technology firms and system integrators enhance its market reach and contribute to its revenue streams by facilitating bundled offerings and cross-selling opportunities.

WingArc1st Inc. Financial Statement Overview

Summary

Strong profitability (TTM ~79.7% gross margin, ~18.5% net margin, ~26.3% EBIT) and a conservative, improving balance sheet (TTM debt-to-equity ~0.18). Offsetting this, revenue growth has clearly decelerated (TTM ~3.7% vs. ~11.5% in FY2025) and free cash flow declined in TTM (-14.7%), indicating some near-term pressure despite overall quality.

Income Statement

TTM (Trailing-Twelve-Months) results show solid profitability with a ~79.7% gross margin and ~18.5% net margin, supported by strong operating profitability (EBIT margin ~26.3%). Revenue growth is positive but decelerating (TTM ~3.7% vs. ~11.5% in FY2025 and mid-teens in FY2023–FY2024), and margins are off prior-year highs (TTM net margin ~18.5% vs. ~20.7% in FY2025), suggesting some recent pressure despite still-healthy levels.

Balance Sheet

The balance sheet looks conservative and strengthening: leverage is low (TTM debt-to-equity ~0.18) and has improved materially from FY2021 (~0.63) as equity has grown. Returns remain healthy for a software business (TTM return on equity ~12.5%), though down from FY2025 (~14.2%), indicating profitability is solid but not accelerating.

Cash Flow

Cash generation quality is generally good, with free cash flow tracking earnings closely (TTM free cash flow to net income ~0.97). However, free cash flow declined in TTM (-14.7% growth) versus growth in the prior annual periods, and operating cash flow conversion is only moderate (TTM operating cash flow coverage ~0.55), pointing to some near-term variability in cash generation despite strong underlying profitability.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	29.60B	28.71B	25.75B	22.35B	19.83B	18.29B
Gross Profit	24.31B	25.80B	25.75B	22.35B	19.83B	13.70B
EBITDA	9.83B	10.12B	9.01B	7.51B	7.57B	6.40B
Net Income	5.65B	5.93B	5.41B	4.40B	4.35B	2.45B
Balance Sheet
Total Assets	72.21B	68.44B	65.95B	62.55B	58.92B	55.91B
Cash, Cash Equivalents and Short-Term Investments	12.22B	14.72B	13.04B	11.22B	9.05B	5.19B
Total Debt	7.83B	8.56B	9.94B	12.21B	14.19B	16.16B
Total Liabilities	27.06B	26.59B	26.85B	27.98B	28.30B	30.23B
Stockholders Equity	45.12B	41.79B	39.07B	34.52B	30.54B	25.68B
Cash Flow
Free Cash Flow	7.14B	7.81B	6.77B	6.31B	5.94B	4.45B
Operating Cash Flow	7.31B	8.20B	7.84B	6.87B	6.44B	4.95B
Investing Cash Flow	-3.22B	-1.60B	-1.60B	-1.02B	-532.55M	-134.88M
Financing Cash Flow	-5.79B	-4.86B	-4.46B	-3.73B	-2.08B	-4.65B

WingArc1st Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3045.00
• 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:4432, the sentiment is Negative. The current price of 3045 is above the 20-day moving average (MA) of 2825.72, below the 50-day MA of 3234.46, and below the 200-day MA of 3420.36, indicating a bearish trend. The MACD of -180.64 indicates Negative momentum. The RSI at 39.39 is Neutral, neither overbought nor oversold. The STOCH value of 49.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4432.

WingArc1st Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4828	77 Outperform	¥84.58B	18.62	31.13%	1.68%	16.12%	46.57%
4776	71 Outperform	¥102.40B	14.57	―	1.02%	26.47%	142.77%
4432	66 Neutral	¥94.68B	16.82	―	2.59%	5.22%	-6.62%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4259	61 Neutral	¥63.30B	-43.44	―	―	8.98%	-581.59%
3905	57 Neutral	¥56.30B	-35.71	―	―	27.58%	-1.50%
4478	55 Neutral	¥128.29B	144.60	―	―	31.57%	―

WingArc1st Inc. Corporate Events

WingArc1st Posts Modest Revenue Growth but Lower Profit, Keeps Full-Year Outlook and Dividend Plan Intact

WingArc1st reported consolidated revenue of ¥22.5 billion for the nine months ended November 30, 2025, up 4.1% year on year, while operating profit fell 5.0% to ¥6.2 billion and profit attributable to shareholders declined 6.0% to ¥4.4 billion, indicating margin pressure despite continued top-line growth. EBITDA slipped 3.3% to ¥7.35 billion, but the company’s financial position strengthened, with total assets rising to ¥72.2 billion and the equity ratio improving to 62.5%, and management maintained its full-year forecast for fiscal 2025/26, projecting 8–9% growth in revenue, operating profit, EBITDA and profit and confirming a total annual dividend of ¥104 per share, signaling confidence in earnings momentum and continued shareholder returns.

The most recent analyst rating on (JP:4432) stock is a Buy with a Yen4065.00 price target. To see the full list of analyst forecasts on WingArc1st Inc. stock, see the JP:4432 Stock Forecast page.