freee K.K. (4478) AI Stock Analysis

• Market Cap: ¥199.40B
• Dividend Yield: N/A
• Average Volume (3M): 425.28K
• Price to Earnings (P/E): 143.8
• Beta (1Y): 1.15
• Revenue Growth: 31.57%
• EPS Growth: N/A
• Country: JP
• Employees: 1,722
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 2.61
• Shares Outstanding: 59,611,107
• 10 Day Avg. Volume: 390,490
• 30 Day Avg. Volume: 425,280
• PEG Ratio: 0.71
• Price to Book (P/B): 8.15
• Price to Sales (P/S): 5.43
• P/FCF Ratio: -18.60
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: ¥3,126.00 ▲(4.27% Upside)

The overall stock score is primarily influenced by strong financial performance, with notable revenue growth and improving profitability. However, technical indicators suggest bearish momentum, and the high P/E ratio points to overvaluation. The absence of earnings call data and corporate events means these factors did not influence the score.

Positive Factors

Revenue Growth

Sustained revenue growth indicates successful market penetration and product adoption, which are crucial for long-term business expansion and stability.

Cash Flow Improvements

Positive cash flow turnaround enhances financial flexibility, allowing for reinvestment in growth opportunities and reducing reliance on external financing.

Balance Sheet Health

A strong balance sheet with a healthy equity ratio provides a solid foundation for sustainable growth and resilience against economic fluctuations.

Negative Factors

Low Net Profit Margin

Low net profit margins can limit profitability and reduce the company's ability to invest in growth, potentially impacting long-term competitiveness.

Historical Cash Flow Volatility

Volatile cash flows can lead to uncertainty in financial planning and may affect the company's ability to consistently fund operations and growth initiatives.

Negative Return on Equity

Negative return on equity suggests inefficient use of shareholder funds, which can hinder investor confidence and affect long-term capital raising capabilities.

freee K.K. Business Overview & Revenue Model

Company Description

freee K.K. provides cloud-based accounting and HR software in Japan. It offers Accounting freee, an integrated accounting software solution for SMBs; and HR freee, a cloud-native integrated payroll software solution that provides payroll and other human resource related functions for SMBs. The company was founded in 2012 and is headquartered in Tokyo, Japan.

How the Company Makes Money

freee K.K. generates revenue primarily through subscription fees for its cloud-based software services. The company offers various pricing tiers based on the features and services utilized by its customers, which include small businesses and freelancers. Additionally, freee earns revenue from add-on services such as payroll management, tax filing assistance, and premium support options. Strategic partnerships with financial institutions and other technology providers further enhance its offerings and may provide additional revenue opportunities, such as referral fees or co-marketing initiatives. Overall, the company's focus on recurring revenue from subscriptions is a key driver of its financial performance.

freee K.K. Financial Statement Overview

Summary

The company has shown strong revenue growth and improving profitability metrics. The balance sheet is stable with a healthy equity ratio, though return on equity remains a concern. Cash flow improvements are notable, but historical volatility suggests the need for cautious cash management.

Income Statement

The company has shown a strong revenue growth rate of 15.09% in the latest year, indicating a positive trajectory. Gross profit margin is healthy, reflecting efficient cost management. However, the net profit margin is low due to high operating expenses, impacting overall profitability. The EBIT and EBITDA margins have improved significantly, moving from negative to positive, which is a positive sign of operational improvement.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio, indicating a balanced approach to leveraging. The return on equity is still negative, but there is an improvement compared to previous years, suggesting better utilization of equity. The equity ratio is strong, showing a solid capital structure with a good proportion of equity financing.

Cash Flow

The company has achieved a significant turnaround in free cash flow, moving from negative to positive, which is a strong indicator of improved cash management. The operating cash flow to net income ratio is positive, suggesting that the company is generating cash efficiently relative to its net income. However, the historical volatility in cash flows poses a risk to stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	33.27B	33.27B	19.22B	25.43B	14.38B	10.26B
Gross Profit	27.36B	27.36B	16.07B	20.99B	11.54B	8.16B
EBITDA	927.01M	901.21M	-12.32B	-10.06B	-11.72B	-2.36B
Net Income	1.37B	1.37B	-12.34B	-10.15B	-11.61B	-2.76B
Balance Sheet
Total Assets	52.60B	52.60B	42.79B	39.95B	47.41B	55.29B
Cash, Cash Equivalents and Short-Term Investments	35.79B	35.79B	36.41B	31.75B	42.55B	47.64B
Total Debt	9.60B	9.60B	0.00	4.70B	576.00M	292.05M
Total Liabilities	32.93B	32.93B	15.73B	23.00B	10.98B	8.41B
Stockholders Equity	19.66B	19.66B	26.06B	16.95B	36.43B	46.87B
Cash Flow
Free Cash Flow	0.00	3.62B	-5.48B	-7.43B	-3.17B	-656.47M
Operating Cash Flow	0.00	3.66B	-4.75B	-6.77B	-1.07B	-192.53M
Investing Cash Flow	0.00	-4.60B	-1.94B	-1.09B	-4.48B	-3.18B
Financing Cash Flow	0.00	4.98B	543.86M	3.71B	451.99M	35.38B

freee K.K. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2998.00
• 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:4478, the sentiment is Negative. The current price of 2998 is below the 20-day moving average (MA) of 3285.45, below the 50-day MA of 3443.98, and below the 200-day MA of 3658.02, indicating a bearish trend. The MACD of -116.15 indicates Positive momentum. The RSI at 37.37 is Neutral, neither overbought nor oversold. The STOCH value of 17.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4478.

freee K.K. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4071	74 Outperform	¥98.71B	29.31	―	1.26%	22.78%	7.57%
9928	74 Outperform	¥52.28B	11.34	―	3.16%	4.47%	11.37%
4776	72 Outperform	¥150.94B	23.78	―	0.91%	26.47%	142.77%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4443	54 Neutral	¥213.47B	194.30	―	―	27.65%	96.11%
4478	51 Neutral	¥199.40B	143.84	―	―	31.57%	―
3994	41 Neutral	€240.21B	-38.85	-19.16%	―	19.57%	-16.67%

freee K.K. Corporate Events

freee K.K. Reports Strong Q3 2025 Financial Results and Positive Outlook

freee K.K. reported its consolidated financial results for the three months ended September 30, 2025, showing a significant increase in net sales by 32.1% year-on-year, driven by customer base expansion and enhanced customer value. Despite a decline in profit attributable to owners of the parent, the company forecasts continued growth in net sales and adjusted operating profit for the fiscal year ending June 30, 2026, indicating a strong market position and positive outlook for stakeholders.

The most recent analyst rating on (JP:4478) stock is a Hold with a Yen3597.00 price target. To see the full list of analyst forecasts on freee K.K. stock, see the JP:4478 Stock Forecast page.

freee K.K. Completes Payment for New Restricted Shares Issuance

freee K.K. has completed the payment process for the issuance of new restricted shares, as resolved in their September 26, 2025 Board of Directors’ meeting. This issuance involves 29,621 common shares allocated to directors and employees, potentially enhancing the company’s governance and aligning interests with stakeholders.

The most recent analyst rating on (JP:4478) stock is a Hold with a Yen3780.00 price target. To see the full list of analyst forecasts on freee K.K. stock, see the JP:4478 Stock Forecast page.

freee K.K. Announces New Restricted Share Issuance to Align Director and Employee Interests

freee K.K. has announced a new issuance of restricted shares as part of a compensation plan for its directors and employees, aimed at aligning their interests with those of shareholders and promoting sustainable corporate growth. This strategic move is expected to strengthen the company’s governance and operational framework, potentially enhancing its market position and stakeholder confidence.

The most recent analyst rating on (JP:4478) stock is a Hold with a Yen3726.00 price target. To see the full list of analyst forecasts on freee K.K. stock, see the JP:4478 Stock Forecast page.

freee K.K. Announces Corrections to Financial Results

freee K.K. has issued corrections to its previously released Consolidated Financial Results for the fiscal year ended June 30, 2025. The corrections address errors in the Consolidated Balance Sheet and Statement of Cash Flows, specifically related to other payable and income taxes payable amounts. These corrections do not affect total current liabilities or cash flows from operating activities, ensuring the overall financial position remains stable.

The most recent analyst rating on (JP:4478) stock is a Hold with a Yen3726.00 price target. To see the full list of analyst forecasts on freee K.K. stock, see the JP:4478 Stock Forecast page.