DreamArts Corp. (4811) AI Stock Analysis

• Market Cap: ¥9.27B
• Dividend Yield: 1.01%
• Average Volume (3M): 9.13K
• Price to Earnings (P/E): 19.5
• Beta (1Y): 0.76
• Revenue Growth: 15.34%
• EPS Growth: 67.96%
• Country: JP
• Employees: 272
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 11.85
• Shares Outstanding: 12,163,800
• 10 Day Avg. Volume: 6,480
• 30 Day Avg. Volume: 9,126
• PEG Ratio: 0.52
• Price to Book (P/B): 5.06
• Price to Sales (P/S): 2.61
• P/FCF Ratio: 13.92
• 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): 49.47
• Revenue Forecast (FY): ¥6.42B

• Rating: 72 Outperform
• Price Target: ¥859.00 ▼(-77.80% Downside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is driven primarily by strong financial performance—material margin expansion, debt-free balance sheet, and good cash conversion. This is offset by weak technicals (price below all major moving averages and negative MACD), while valuation is broadly reasonable with a moderate P/E and ~2.6% dividend yield.

Positive Factors

Debt-free balance sheet

Elimination of debt and material equity compounding materially reduces financial risk and raises strategic optionality. A debt-free position supports durable capital allocation — funding R&D, dividends, or buybacks — and lowers default/liquidity risk over the medium term.

Strong cash generation

High and improving free cash flow, nearly matching reported earnings, indicates earnings are cash-backed and the business consistently converts profits to spendable cash. That durability supports reinvestment, dividends, and resilience to cyclical shocks over months.

Sustained margin expansion

Consistent, large improvements in gross and operating margins suggest scalable product economics and improved operating leverage. Higher margins underpin durable profitability, stronger cash flows and better reinvestment capability versus prior years.

Negative Factors

Uneven revenue growth

A near-flat year in 2024 shows demand or execution volatility; uneven multi-year growth increases uncertainty for planning and capital allocation. Durable forecasting and investor confidence can be impaired if growth is lumpy rather than steadily compounding.

Cash-flow volatility / working capital swings

Working-capital timing and periodic FCF dips mean cash availability can be inconsistent despite strong annual totals. This elevates short-term liquidity risk and may force temporary financing or constrain discretionary spending in certain quarters.

Concentration in 2025 re-acceleration

A large single-year growth spike implies results may reflect one-time factors or catch-up demand. If growth normalizes, previously expanded margins and cash flow could revert, making the recent improvement less predictive of multi-quarter performance.

DreamArts Corp. Business Overview & Revenue Model

Company Description

DreamArts Corporation engages in the planning, development, and sale of cloud products for large companies. The company offers SaaS products, such as SmartDB, the no-code development tool and consulting services for business digitalization focuses on the enterprise market. It also offers ShopRan, a cloud service that supports multi-store businesses; and InsuiteX, a business cockpit that changes the way large companies work. DreamArts Corporation was founded in 1996 and is headquartered in Tokyo, Japan.

DreamArts Corp. Financial Statement Overview

Summary

Strong multi-year improvement in profitability (net margin ~0.4% in 2021 to ~13.4% in 2025; EBIT margin to ~17.2%) and meaningfully higher gross margin (~62.5% in 2025). Balance sheet is a major strength with debt reduced to ¥0 and equity growth supporting strong ROE (~26% in 2025). Cash conversion is solid (FCF ~97% of net income in 2025), though operating cash flow covers less than half of total liabilities (~0.49 in 2025) and revenue growth has moderated (~4.2% in 2025).

Income Statement

Profitability has improved sharply over the last several years, with net margin rising from ~0.4% (2021) to ~13.4% (2025) and EBIT margin expanding from negative (2021) to ~17.2% (2025). Gross margin also strengthened meaningfully (from ~45.9% in 2021 to ~62.5% in 2025), suggesting better pricing, mix, and/or cost control. Revenue growth remains positive but has moderated (2025 growth ~4.2% vs. stronger growth in 2022–2023), which is the main watch item as the company scales.

Balance Sheet

Balance sheet strength is a clear positive: total debt fell from ¥450m (2021) to ¥0 (2025), taking debt-to-equity down to 0.0 and materially reducing financial risk. Equity has expanded substantially (¥710m in 2021 to ~¥2.92bn in 2025), and returns on equity are strong (mid‑20% range in 2023–2025, ~26% in 2025). With low leverage and rising profitability, the company appears well-positioned to fund growth without balance-sheet strain.

Cash Flow

Cash generation is solid and increasingly supportive of earnings: free cash flow is high relative to net income (roughly ~86% to ~98% in 2023–2025; ~97% in 2025), indicating good cash conversion. Operating cash flow and free cash flow are both robust in absolute terms in 2024–2025, though free cash flow dipped modestly in 2024 before rebounding in 2025. A key weakness is that operating cash flow covers less than half of total liabilities in the most recent periods (~0.43 in 2024 and ~0.49 in 2025), which suggests limited near-term liability coverage despite strong profitability.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	5.43B	5.65B	5.03B	4.44B	3.67B	2.94B
Gross Profit	3.29B	3.53B	2.87B	2.37B	1.84B	1.35B
EBITDA	1.30B	1.18B	947.61M	742.46M	366.32M	122.63M
Net Income	779.55M	757.53M	551.34M	424.29M	127.13M	10.88M
Balance Sheet
Total Assets	5.65B	5.31B	4.74B	3.95B	2.43B	2.02B
Cash, Cash Equivalents and Short-Term Investments	4.48B	4.14B	3.57B	2.84B	1.27B	924.69M
Total Debt	0.00	0.00	300.00M	300.00M	300.00M	450.00M
Total Liabilities	3.03B	2.40B	2.43B	2.13B	1.58B	1.31B
Stockholders Equity	2.62B	2.92B	2.31B	1.82B	853.92M	710.07M
Cash Flow
Free Cash Flow	0.00	1.06B	976.00M	1.02B	485.50M	3.51M
Operating Cash Flow	0.00	1.09B	1.00B	1.18B	721.30M	132.09M
Investing Cash Flow	0.00	-71.47M	-201.00M	-162.39M	-235.61M	-132.58M
Financing Cash Flow	0.00	-454.99M	-77.00M	538.27M	-149.98M	-205.04M

DreamArts Corp. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3870.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4811, the sentiment is Negative. The current price of 3870 is above the 20-day moving average (MA) of 803.80, above the 50-day MA of 989.76, and above the 200-day MA of 1204.19, indicating a bearish trend. The MACD of -49.34 indicates Negative momentum. The RSI at 37.27 is Neutral, neither overbought nor oversold. The STOCH value of 56.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4811.

DreamArts Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4374	74 Outperform	¥9.99B	20.41	―	0.47%	19.35%	71.74%
4811	72 Outperform	¥9.27B	19.47	―	1.01%	15.34%	67.96%
3623	71 Outperform	¥6.41B	15.28	―	1.18%	6.95%	-9.62%
4430	69 Neutral	¥8.52B	8.25	―	3.06%	27.08%	18.85%
3633	65 Neutral	¥9.79B	13.23	―	2.16%	2.75%	25.24%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4434	61 Neutral	¥15.36B	8.71	―	―	―	―