Nextware Ltd. (4814) AI Stock Analysis

• Market Cap: ¥2.31B
• Dividend Yield: N/A
• Average Volume (3M): 3.74M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.49
• Revenue Growth: -4.07%
• EPS Growth: 53.47%
• Country: JP
• Employees: 209
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): -3.23
• Shares Outstanding: 13,015,222
• 10 Day Avg. Volume: 3,421,630
• 30 Day Avg. Volume: 3,737,233
• PEG Ratio: 0.50
• Price to Book (P/B): 1.49
• Price to Sales (P/S): 0.60
• P/FCF Ratio: -30.43
• 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: 44 Neutral
• Price Target: ¥177.00 ▲(2.91% Upside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is held down primarily by weak financial performance (sharp revenue contraction, ongoing losses, and unstable/negative free cash flow). Technical indicators also point to a soft trend with negative MACD and prices below key moving averages. Valuation is not supportive because earnings are negative and no dividend yield is available.

Positive Factors

Low leverage and strong equity base

A high equity ratio and low debt provide durable financial resilience, lowering refinancing and interest risk. This conservatism preserves strategic optionality, supports investment or restructuring, and gives the company runway to address operational deficits over the next several months.

Stable gross profit margin

A relatively stable gross margin indicates the core services or products retain pricing power or consistent cost structure. That stability limits downside to profitability from cost of goods sold and means operational improvements or SG&A control could convert margins to positive operating profit over time.

Prudent capital expenditure management

Conservative capex preserves cash and reduces ongoing fixed commitments, lowering cash burn while the business works to restore profitability. Combined with low leverage, prudent capex supports survival and allows focus on high-return projects without pressuring the balance sheet.

Negative Factors

Persistent operating losses

Ongoing negative EBIT and net losses reflect structural operating shortfalls that erode equity and reduce reinvestment capacity. Without sustained revenue or margin improvement, losses will continue to impair profitability metrics and limit ability to fund growth internally.

Weak and inconsistent cash generation

Negative and volatile operating and free cash flows constrain the company's ability to finance operations, invest in growth, or withstand downturns. Persistent cash deficits may force external financing, dilutive measures, or cost-cutting that undermine strategic initiatives.

Declining revenue trend

A multi-year revenue decline signals weakening market demand or loss of customer share, limiting scale benefits and putting pressure on fixed-cost absorption. Continued top-line contraction makes margin recovery and sustainable profitability materially harder over the medium term.

Nextware Ltd. Business Overview & Revenue Model

Company Description

Nextware Ltd. provides IT solutions in Japan. The company operates through Solutions Business and Entertainment Business segments. It is also involved in the computer system design and software development activities; buying, importing/exporting, selling, and leasing of computers and its peripherals. In addition, the company engages in operational management and support of computer systems; and computer system consulting services. Further, it provides consulting management, events planning and management, and non-life insurance agency businesses. Additionally, the company offers digital content development and distribution services. Nextware Ltd. was incorporated in 1990 and is headquartered in Osaka, Japan.

Nextware Ltd. Financial Statement Overview

Summary

Overall fundamentals are pressured: severe revenue decline in the latest year and recent operating/net losses outweigh the benefit of a low-leverage balance sheet. Cash flow reliability is also weak with free cash flow turning materially negative in 2025.

Income Statement

Profitability and growth are weak and volatile. Revenue has been declining for several years, with a very steep drop in the latest year (2025 annual report revenue growth of -86.4%). Margins have stayed around mid-20s at the gross level, but operating results are consistently negative recently (2024–2025 operating losses) and net margins are negative in the last two years. There was a one-off strong year in 2022 (very high net margin), but the business reverted to losses afterward, raising concerns about earnings durability.

Balance Sheet

The balance sheet is a relative strength due to very low leverage. Total debt has been reduced dramatically versus earlier years, and debt-to-equity is close to zero in 2025, providing financial flexibility and lowering solvency risk. However, equity has trended down from 2022 to 2025, and returns on equity are negative in 2024–2025, indicating the capital base is not currently generating profits.

Cash Flow

Cash flow quality is inconsistent. Operating cash flow was strong in 2024 but fell sharply in 2025, and free cash flow swung from positive (2024) to materially negative (2025). Earlier years also show meaningful volatility, including very weak cash generation in 2023 and negative free cash flow in multiple periods. Overall, the company’s ability to reliably convert results into cash appears unstable.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.97B	3.01B	2.82B	2.89B	2.92B	3.16B
Gross Profit	762.84M	782.20M	722.22M	774.27M	837.37M	875.33M
EBITDA	-31.16M	-42.10M	-95.16M	77.87M	971.79M	144.26M
Net Income	-111.78M	-105.95M	-161.75M	11.66M	686.67M	24.38M
Balance Sheet
Total Assets	1.42B	1.55B	1.69B	1.84B	2.10B	1.54B
Cash, Cash Equivalents and Short-Term Investments	458.00M	453.30M	595.54M	639.62M	1.09B	314.66M
Total Debt	0.00	1.95M	8.55M	44.40M	74.61M	259.10M
Total Liabilities	294.00M	325.23M	359.26M	322.15M	555.45M	684.97M
Stockholders Equity	1.13B	1.22B	1.33B	1.52B	1.54B	855.54M
Cash Flow
Free Cash Flow	0.00	-59.72M	26.02M	-380.73M	223.78M	-23.90M
Operating Cash Flow	0.00	2.69M	105.07M	-346.41M	314.17M	72.37M
Investing Cash Flow	0.00	-138.33M	-87.89M	-31.25M	741.28M	-106.42M
Financing Cash Flow	0.00	-6.60M	-61.26M	-68.33M	-184.49M	48.40M

Nextware Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 172.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4814, the sentiment is Negative. The current price of 172 is below the 20-day moving average (MA) of 196.65, below the 50-day MA of 207.02, and below the 200-day MA of 183.88, indicating a neutral trend. The MACD of -0.18 indicates Negative momentum. The RSI at 45.80 is Neutral, neither overbought nor oversold. The STOCH value of 30.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4814.

Nextware Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4335	81 Outperform	¥2.93B	8.12	―	3.28%	9.68%	25.15%
4421	79 Outperform	¥2.76B	22.68	―	2.86%	5.74%	5.97%
3974	72 Outperform	¥2.87B	15.75	―	2.35%	0.40%	21.21%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6193	61 Neutral	¥3.01B	15.80	―	1.52%	4.73%	135.75%
4416	55 Neutral	¥2.43B	268.52	―	―	5.05%	-50.80%
4814	44 Neutral	¥2.31B	-13.32	―	―	-4.07%	53.47%