freee K.K. (4478) AI Stock Analysis

• Market Cap: ¥224.28B
• Dividend Yield: N/A
• Average Volume (3M): 557.85K
• Price to Earnings (P/E): 161.9
• Beta (1Y): 1.04
• Revenue Growth: 30.83%
• EPS Growth: N/A
• Country: JP
• Employees: 1,722
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 6.08
• Shares Outstanding: 59,568,886
• 10 Day Avg. Volume: 410,000
• 30 Day Avg. Volume: 557,850
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥4,100.00
• Price Target Upside: 8.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 55 Neutral
• Price Target: ¥3,726.00 ▼(-1.04% Downside)

The stock's overall score is driven primarily by its strong financial performance, with significant revenue growth and improving profitability. However, technical indicators suggest potential bearish momentum, and the high P/E ratio indicates overvaluation concerns. The absence of earnings call data and corporate events limits additional insights.

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 improved profitability metrics, with a healthy gross profit margin. However, high operating expenses impact net profit margin, and return on equity remains a concern despite improvements.

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 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	30.86B	33.27B	25.43B	19.22B	14.38B	10.26B
Gross Profit	25.58B	27.36B	20.99B	16.07B	11.54B	8.16B
EBITDA	-142.45M	901.21M	-10.06B	-12.32B	-11.72B	-2.36B
Net Income	-503.51M	1.37B	-10.15B	-12.34B	-11.61B	-2.76B
Balance Sheet
Total Assets	48.15B	52.60B	39.95B	42.79B	47.41B	55.29B
Cash, Cash Equivalents and Short-Term Investments	32.81B	35.79B	31.75B	36.41B	42.55B	47.64B
Total Debt	8.10B	9.60B	4.70B	0.00	576.00M	292.05M
Total Liabilities	29.39B	32.93B	23.00B	15.73B	10.98B	8.41B
Stockholders Equity	18.76B	19.66B	16.95B	26.06B	36.43B	46.87B
Cash Flow
Free Cash Flow	0.00	3.62B	-7.43B	-5.48B	-3.17B	-656.47M
Operating Cash Flow	0.00	3.66B	-6.77B	-4.75B	-1.07B	-192.53M
Investing Cash Flow	0.00	-4.60B	-1.09B	-1.94B	-4.48B	-3.18B
Financing Cash Flow	0.00	4.98B	3.71B	543.86M	451.99M	35.38B

freee K.K. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3765.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4478, the sentiment is Positive. The current price of 3765 is above the 20-day moving average (MA) of 3418.25, above the 50-day MA of 3651.10, and above the 200-day MA of 3605.43, indicating a bullish trend. The MACD of 65.31 indicates Negative momentum. The RSI at 62.48 is Neutral, neither overbought nor oversold. The STOCH value of 87.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	106.08B	26.22	―	0.64%	27.18%	35.88%
4776	72 Outperform	158.74B	30.21	―	0.87%	22.97%	107.52%
9928	71 Outperform	53.88B	13.99	14.96%	2.83%	4.32%	-6.09%
4443	59 Neutral	241.90B	568.09	2.66%	―	27.52%	-55.62%
3994	56 Neutral	334.21B	-55.57	-16.91%	―	20.96%	-6.20%
4478	55 Neutral	¥224.28B	161.91	―	―	30.83%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

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.