freee K.K. (4478) AI Stock Analysis

• Market Cap: ¥135.74B
• Dividend Yield: N/A
• Average Volume (3M): 425.28K
• Price to Earnings (P/E): 99.1
• Beta (1Y): 1.11
• 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: 59,665,160
• 10 Day Avg. Volume: 390,490
• 30 Day Avg. Volume: 425,280
• PEG Ratio: -1.46
• Price to Book (P/B): 11.51
• Price to Sales (P/S): 6.80
• P/FCF Ratio: 62.59
• 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: 55 Neutral
• Price Target: ¥2,800.00 ▼(-8.20% Downside)

The score is driven primarily by improving fundamentals (strong revenue growth, positive operating profitability, and a stable balance sheet), but is meaningfully held back by weak technical trends (below major moving averages with negative MACD) and an expensive valuation (very high P/E with no dividend yield provided).

Positive Factors

Consistent revenue growth

Sustained top-line growth provides durable scale benefits for a subscription-driven SME software business. Higher recurring revenue supports continued product investment, customer success expansion, and absorption of fixed costs, improving long-term unit economics and market penetration.

Free cash flow turnaround

A transition from negative to positive free cash flow materially improves financial flexibility. Positive FCF enables reinvestment in product, strategic partnerships, and organic growth without reliance on external financing, strengthening the company's ability to execute medium-term initiatives.

Stable capital structure

A strong equity ratio and moderate leverage provide a resilient balance sheet that supports investment and risk absorption. This capital structure reduces refinancing pressure, preserves optionality for M&A or R&D, and underpins sustained operations through business cycles.

Negative Factors

Low net profit margin

Persistently low net margins from high operating costs limit the company's ability to convert revenue into lasting earnings. Unless operating efficiency improves, margin compression will constrain free cash generation and reinvestment capacity, slowing progress toward durable profitability.

Negative return on equity

A negative ROE indicates the business has not yet generated positive returns on shareholder capital. This structural shortfall can hinder investor confidence and raise the cost of equity, limiting access to capital for long-term growth until ROE turns sustainably positive.

Volatile historical cash flows

High variability in operating cash flows complicates planning for capex, R&D, and expansion. Persistent volatility increases the need for liquidity buffers or external funding, which can raise financing costs and reduce the firm's capacity to pursue multi-quarter strategic investments reliably.

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 software services. The company offers various pricing tiers based on the features and number of users, which allows them to cater to different business sizes and needs. Additionally, freee earns revenue from ancillary services, such as premium support and consulting. The firm has also established partnerships with financial institutions and other service providers, enabling them to offer integrated solutions that enhance their value proposition and drive customer acquisition. The growing trend toward digital transformation among SMEs and the increasing demand for efficient financial management tools contribute significantly to freee's earnings.

freee K.K. Financial Statement Overview

Summary

Revenue growth is strong (15.09%) and profitability is improving with EBIT/EBITDA turning positive, while the balance sheet is stable with a strong equity ratio. Offsetting this, net profit margin remains low due to high operating expenses, ROE is still negative, and cash flows have been historically volatile despite a recent free cash flow turnaround.

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 2025	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: 3050.00
• 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:4478, the sentiment is Negative. The current price of 3050 is above the 20-day moving average (MA) of 2901.85, above the 50-day MA of 2953.18, and below the 200-day MA of 3484.60, indicating a bearish trend. The MACD of -129.59 indicates Positive momentum. The RSI at 20.21 is Positive, neither overbought nor oversold. The STOCH value of 8.86 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	79 Outperform	¥86.34B	28.05	―	1.19%	22.78%	7.57%
9928	74 Outperform	¥52.44B	11.51	―	2.81%	4.47%	11.37%
4443	68 Neutral	¥155.74B	75.37	―	―	27.65%	96.11%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3994	58 Neutral	¥185.73B	116.28	-19.16%	―	19.57%	-16.67%
4478	55 Neutral	¥135.74B	99.06	―	―	31.57%	―
4776	―	¥98.09B	16.72	―	1.02%	26.47%	142.77%

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.