HENNGE K.K. (4475) AI Stock Analysis

• Market Cap: ¥37.77B
• Dividend Yield: 0.39%
• Average Volume (3M): 546.35K
• Price to Earnings (P/E): 27.4
• Beta (1Y): 0.56
• Revenue Growth: 30.59%
• EPS Growth: 65.14%
• Country: JP
• Employees: 311
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 9.45
• Shares Outstanding: 32,500,600
• 10 Day Avg. Volume: 584,820
• 30 Day Avg. Volume: 546,350
• PEG Ratio: 0.58
• Price to Book (P/B): 13.26
• Price to Sales (P/S): 4.72
• P/FCF Ratio: 19.12
• 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: 69 Neutral
• Price Target: ¥1,428.00 ▲(9.34% Upside)

The score is driven primarily by strong financial performance (high margins, improving profitability, low leverage, and solid cash generation). This is tempered by weaker technical conditions (below key moving averages and negative MACD) and a relatively premium valuation (P/E 30.8) despite a modest dividend yield.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and successful product adoption, supporting long-term business expansion.

Margin Sustainability

High and improving margins reflect efficient operations and pricing power, enhancing long-term profitability and competitiveness.

Cash Generation Ability

Strong cash generation supports reinvestment in growth opportunities and provides financial stability, underpinning future expansion.

Negative Factors

Uneven Growth Cadence

Variability in growth rates may indicate challenges in sustaining consistent demand, potentially impacting long-term planning and stability.

Moderate Operating Cash Flow

Moderate cash flow relative to revenue suggests ongoing cash needs, which could limit flexibility in scaling operations or investing in new initiatives.

Introduction of Debt

Introducing debt, even if small, marks a shift from a debt-free stance, potentially increasing financial risk and affecting capital allocation.

HENNGE K.K. Business Overview & Revenue Model

Company Description

HENNGE K.K. provides cloud security services worldwide. The company offers HENNGE One, a cloud-based identity and access management solution that offers single sign-on. It also provides HENNGE Secure Browser, which enables users to securely access cloud services federated with HENNGE One using HENNGE One account; and HENNGE OTP Generator, a virtual device application for multi-factor authentication that generates time-based one-time passwords complying with RFC 6238. The company was formerly known as HDE, Inc. and changed its name to HENNGE K.K. in February 2019. HENNGE K.K. was founded in 1996 and is headquartered in Tokyo, Japan.

How the Company Makes Money

HENNGE K.K. generates revenue through a subscription-based model for its cloud security services. The company's primary revenue stream comes from the sale of subscriptions to HENNGE One, which provides secure access management, email security, and cloud data protection. Customers pay a recurring fee, typically on a monthly or annual basis, for access to the platform and its suite of security features. Additionally, HENNGE collaborates with various cloud service providers and technology partners to enhance its offerings, which can also contribute to its revenue through joint marketing efforts or bundled service packages.

HENNGE K.K. Financial Statement Overview

Summary

Strong overall fundamentals: very high gross margins (~82–86%), improving operating and net margins (EBIT ~8% to ~17% and net ~4.6% to ~12.4% from 2021 to 2025), conservative leverage (debt-to-equity ~0.04), and rising operating/free cash flow with solid cash-to-earnings conversion (FCF/NI ~0.85–0.99). Main offsets are uneven growth cadence (notably softer 2024) and only moderate operating cash flow relative to revenue.

Income Statement

Revenue has expanded strongly over the period (from 2020 to 2025 annual), with steady growth through 2023 and an acceleration in the latest year. Profitability is a clear strength: gross margin remains very high (~82% to ~86%) and operating profitability has improved meaningfully (EBIT margin rising from ~8% in 2021 to ~17% in 2025). Net margin also improved (about ~4.6% in 2021 to ~12.4% in 2025), indicating better scale economics. The main offset is that growth was notably softer in 2024 versus prior years, suggesting some periodic demand variability.

Balance Sheet

The balance sheet is conservatively positioned with minimal leverage: debt was effectively zero for multiple years and remains very low in 2025 (debt-to-equity ~0.04). Equity has grown consistently, supporting a larger asset base. Returns on equity are strong and improving (roughly ~12% in 2021 to ~35% in 2025), indicating efficient capital use. A watch item is the introduction of debt in 2025 (even if small), which is a change from prior years’ net-debt-free profile.

Cash Flow

Cash generation is a key positive: operating cash flow and free cash flow have risen materially over time, and free cash flow tracks net income closely (free cash flow to net income ~0.85–0.99 across the period), suggesting earnings are backed by cash. The latest year shows a very large jump in free cash flow growth, reinforcing strong operating momentum. The primary drawback is that operating cash flow relative to revenue remains moderate (~0.21 to ~0.42), implying the business still retains meaningful cash needs as it scales.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	10.92B	10.92B	8.36B	6.78B	5.65B	4.84B
Gross Profit	9.45B	9.45B	7.04B	5.68B	4.77B	4.02B
EBITDA	1.93B	1.93B	1.05B	743.62M	501.42M	416.00M
Net Income	1.36B	1.36B	827.41M	508.83M	321.17M	223.84M
Balance Sheet
Total Assets	10.74B	10.74B	8.29B	6.29B	5.21B	4.49B
Cash, Cash Equivalents and Short-Term Investments	7.32B	7.32B	6.33B	4.59B	4.05B	3.39B
Total Debt	148.15M	148.15M	0.00	0.00	0.00	0.00
Total Liabilities	6.90B	6.90B	5.30B	3.88B	3.11B	2.65B
Stockholders Equity	3.89B	3.89B	2.99B	2.42B	2.09B	1.84B
Cash Flow
Free Cash Flow	328.11M	2.70B	1.87B	1.14B	748.20M	505.20M
Operating Cash Flow	349.51M	2.73B	1.93B	1.23B	776.74M	526.93M
Investing Cash Flow	-992.75M	-1.34B	-34.83M	-425.16M	-119.78M	-25.36M
Financing Cash Flow	-96.30M	-417.51M	-150.98M	-270.31M	-100.00K	17.83M

HENNGE K.K. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1306.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4475, the sentiment is Negative. The current price of 1306 is above the 20-day moving average (MA) of 1268.35, above the 50-day MA of 1282.78, and below the 200-day MA of 1535.30, indicating a bearish trend. The MACD of -31.89 indicates Positive momentum. The RSI at 27.60 is Positive, neither overbought nor oversold. The STOCH value of 11.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4475.

HENNGE K.K. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4493	78 Outperform	¥18.09B	26.25	―	0.17%	31.39%	13.12%
4475	69 Neutral	¥37.77B	27.40	―	0.39%	30.59%	65.14%
3915	68 Neutral	¥27.00B	17.72	―	―	17.93%	91.21%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4434	61 Neutral	¥15.93B	-45.43	―	―	―	―
4417	60 Neutral	¥45.24B	34.36	―	0.90%	25.06%	37.24%

HENNGE K.K. Corporate Events

HENNGE Completes Disposal of Treasury Shares for Restricted Stock Remuneration

HENNGE K.K. has completed the payment procedures for the disposal of 17,700 treasury shares as restricted stock remuneration, following a Board of Directors resolution made on December 24, 2025. The shares, all common stock, were disposed of on January 26, 2026, at a price of JPY 1,266 per share for a total value of JPY 22,408,200, and were allotted to nine company directors, including audit and supervisory committee members and two outside directors, underscoring the company’s continued use of equity-based compensation to align management incentives with shareholder interests.

The most recent analyst rating on (JP:4475) stock is a Buy with a Yen1513.00 price target. To see the full list of analyst forecasts on HENNGE K.K. stock, see the JP:4475 Stock Forecast page.

HENNGE to Grant ¥22 Million in Restricted Stock to Directors as Part of Long-Term Incentive Plan

HENNGE K.K. has approved the disposal of 17,700 treasury shares as restricted stock remuneration for nine directors, including outside directors and Audit and Supervisory Committee members, with a total value of ¥22.4 million at a disposal price aligned with the latest market close on the Tokyo Stock Exchange. The move is part of a previously approved long-term equity compensation plan designed to more closely link director pay with shareholder value and share price performance, using multi-year transfer restrictions to promote retention and sustained contribution to corporate value, while signaling continued use of stock-based incentives in the company’s governance and compensation framework.

HENNGE Completes Treasury Share Buyback Totaling 700,000 Shares

HENNGE K.K. has completed a share buyback program authorized by its board on November 21, 2025, acquiring 580,000 shares of its common stock for approximately ¥751 million between December 1 and December 19, 2025. Cumulatively under the broader authorization, the company has repurchased 700,000 shares for about ¥910 million, using market purchases on the Tokyo Stock Exchange, a move that is likely aimed at enhancing shareholder value, optimizing capital structure, and signaling management’s confidence in the company’s prospects to investors.

HENNGE K.K. Announces Treasury Share Acquisition to Enhance Corporate Value

HENNGE K.K. has announced its decision to acquire up to 700,000 treasury shares, representing a maximum of 2.2% of its total outstanding shares, as part of its strategy to enhance corporate value by balancing profit growth and capital efficiency. This move is aimed at preventing share dilution and supporting strategic initiatives such as stock compensation plans and potential mergers or alliances, leveraging the company’s strong financial position with no current debt.

HENNGE K.K. Announces Change in Major Shareholder

HENNGE K.K. announced a change in its major shareholders as Yoshiki Nagatome, a key shareholder and Executive Senior Vice President, sold a portion of his shares to TORECO, Inc., an asset management firm. This transaction slightly reduces Nagatome’s voting rights but does not affect the company’s management structure or performance.

HENNGE K.K. Increases Dividend Amid Strong Financial Performance

HENNGE K.K. announced an increase in its dividend distribution from retained earnings, with a new dividend of JPY 5.00 per share, up from the previously forecasted JPY 4.00. This decision reflects the company’s commitment to maximizing shareholder value and its confidence in maintaining stable financial performance, indicating a positive outlook for stakeholders.

HENNGE K.K. Reports Robust Financial Growth for FY 2025

HENNGE K.K. reported significant financial growth for the fiscal year ended September 30, 2025, with net sales increasing by 30.6% and operating profit rising by 76.7% compared to the previous year. The company’s strong financial performance highlights its robust market positioning and potential positive implications for stakeholders, indicating a successful trajectory in its operations.

HENNGE K.K. Prepares for Tokyo Stock Exchange Prime Market Application

HENNGE K.K. has announced its Board of Directors’ decision to prepare for an application to move from the Tokyo Stock Exchange Growth Market to the Prime Market. This strategic move is intended to support the company’s long-term growth, strengthen its brand, and improve its governance structure. However, the application process is still in the early stages, with no set dates for application or approval, and there are uncertainties regarding meeting the necessary requirements.