freee K.K. (4478) AI Stock Analysis

• Market Cap: ¥206.58B
• Dividend Yield: N/A
• Average Volume (3M): 330.04K
• Price to Earnings (P/E): 149.1
• Beta (1Y): 1.15
• Revenue Growth: 30.83%
• EPS Growth: N/A
• Country: JP
• Employees: 1,722
• Sector: Technology
• Sector Strength: 94
• Industry: Software - Application
• EPS (TTM): 6.08
• Shares Outstanding: 59,617,733
• 10 Day Avg. Volume: 310,030
• 30 Day Avg. Volume: 330,043
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: ¥4,250.00
• Price Target Upside: 22.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 47 Neutral
• Price Target: ―

freee K.K. demonstrates strong revenue growth and a solid balance sheet, but faces significant challenges with profitability and cash flow. Technical indicators suggest potential short-term weakness, and the negative P/E ratio highlights valuation challenges. These factors collectively result in a lower overall stock score.

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 a subscription-based model for its cloud software solutions. Customers pay ongoing fees to access its suite of accounting and HR management tools, which are offered in various pricing tiers based on the size and specific needs of the business. Additionally, the company may earn revenue through professional services, such as implementation support, training, and consultancy. Partnerships with financial institutions and other technology providers can also contribute to freee's revenue by expanding its market reach and enhancing its service offerings. Key factors contributing to its earnings include the growing adoption of cloud-based solutions among SMEs in Japan and the company's ability to continually update and improve its software to maintain customer satisfaction and retention.

freee K.K. Financial Statement Overview

Summary

Overall, freee K.K. shows strong revenue growth and a solid equity position, but struggles with profitability and cash flow generation. The company needs to address operational inefficiencies and improve cash flow from operations to enhance financial stability and shareholder value.

Income Statement

The company has shown impressive revenue growth with a TTM revenue of 28.9 billion JPY, a significant increase from previous years. However, profitability remains a challenge with a negative net profit margin of -10.89% in the TTM period. The EBIT and EBITDA margins are also negative, indicating operational inefficiencies and high operating expenses relative to revenue.

Balance Sheet

The balance sheet reflects a solid equity base with a debt-to-equity ratio of 0.35, signaling low leverage. The equity ratio is approximately 42.56%, highlighting a strong capital structure. However, the return on equity is negative due to ongoing net losses, which could be a concern if not addressed in future periods.

Cash Flow

Cash flow statements indicate negative free cash flow, suggesting challenges in generating cash from operations to fund capital expenditures. The operating cash flow to net income ratio is not meaningful due to zero operating cash flow in the TTM. This raises concerns about the company’s ability to sustain operations without external financing.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	25.43B	19.22B	14.38B	10.26B	6.90B
Gross Profit	20.99B	16.07B	11.54B	8.16B	5.34B
EBITDA	-10.06B	-12.32B	-11.72B	-2.36B	-2.50B
Net Income	-10.15B	-12.34B	-11.61B	-2.76B	-2.97B
Balance Sheet
Total Assets	39.95B	42.79B	47.41B	55.29B	17.90B
Cash, Cash Equivalents and Short-Term Investments	31.75B	36.41B	42.55B	47.64B	15.64B
Total Debt	4.70B	0.00	576.00M	292.05M	0.00
Total Liabilities	23.00B	15.73B	10.98B	8.41B	4.04B
Stockholders Equity	16.95B	26.06B	36.43B	46.87B	13.85B
Cash Flow
Free Cash Flow	-7.43B	-5.48B	-3.17B	-656.47M	-2.10B
Operating Cash Flow	-6.77B	-4.75B	-1.07B	-192.53M	-1.38B
Investing Cash Flow	-1.09B	-1.94B	-4.48B	-3.18B	-1.31B
Financing Cash Flow	3.71B	543.86M	451.99M	35.38B	11.97B

freee K.K. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3465.00
• 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 3465 is below the 20-day moving average (MA) of 3991.50, below the 50-day MA of 3844.60, and below the 200-day MA of 3522.02, indicating a bearish trend. The MACD of -28.04 indicates Positive momentum. The RSI at 34.38 is Neutral, neither overbought nor oversold. The STOCH value of 18.84 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	¥105.74B	26.26		0.68%	27.18%	35.88%
9928	74 Outperform	¥51.83B	13.45		2.89%	4.32%	-6.09%
4776	72 Outperform	¥180.53B	34.36		0.76%	22.97%	107.52%
Sector *	68 Neutral	¥241.26B	15.54	6.62%	2.44%	9.22%	2.43%
4443	66 Neutral	¥239.75B	568.54		―	27.52%	-56.02%
4478	47 Neutral	¥206.58B	149.06		―	30.83%	―
47D	―	€2.10B	―	-18.26%	―	―	―

freee K.K. Corporate Events

freee K.K. Announces Merger with Apollo Inc. to Enhance ERP Services

freee K.K. has announced a merger with its wholly owned subsidiary, Apollo Inc., effective July 1, 2025. This strategic move aims to bolster their cloud ERP offerings by integrating Apollo’s AI-powered reservation service, enhancing support for small businesses in both operational and customer-facing functions.

freee K.K. Issues New Restricted Shares to Employees

freee K.K. has announced the issuance of 137,540 new restricted shares to 328 of its employees, aiming to motivate them towards sustainable growth and align their interests with shareholders. This strategic move is designed to foster long-term commitment from employees and enhance corporate value, with shares subject to transfer restrictions to ensure continued service.

freee K.K. Announces Upward Revision of Earnings Guidance for FY2025

freee K.K. has revised its consolidated earnings guidance for the fiscal year ending June 30, 2025, maintaining its revenue target but significantly increasing its adjusted operating profit forecast to 1,800-2,500 million yen. This upward revision reflects improved acquisition productivity and successful software capitalization efforts in the first half of the fiscal year, indicating a positive impact on the company’s operational efficiency and market positioning.

freee K.K. Reports Robust Growth in Semi-Annual Financial Results

freee K.K. announced a significant improvement in its financial performance for the six months ended December 31, 2024, with net sales increasing by 29.6% compared to the previous year. The company’s efforts to expand its customer base in the SaaS business and enhance customer value are driving its growth, and it forecasts further growth in net sales and adjusted operating profit for the fiscal year ending June 30, 2025.