Nextware Ltd. (4814) AI Stock Analysis

• Market Cap: ¥2.15B
• Dividend Yield: N/A
• Average Volume (3M): 3.74M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.46
• Revenue Growth: -4.07%
• EPS Growth: 53.47%
• Country: JP
• Employees: 209
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): -1.27
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 53 Neutral
• Price Target: ¥191.00 ▲(13.02% Upside)

The overall stock score of 53 reflects significant challenges in financial performance, particularly in profitability and cash flow generation. Technical analysis provides a slightly positive outlook with the stock trading above key moving averages. However, valuation concerns due to a negative P/E ratio and lack of dividend yield weigh down the score.

Positive Factors

Strong Equity Position

A strong equity position with low leverage indicates financial stability, providing a solid foundation for potential future growth and resilience against economic downturns.

Strategic Partnerships

Partnerships with major cloud providers expand market reach and enhance product offerings, supporting long-term revenue growth and competitive positioning in the IT services sector.

Subscription-Based Revenue Model

A subscription-based model provides predictable and recurring revenue streams, enhancing financial stability and allowing for better long-term planning and investment in growth initiatives.

Negative Factors

Profitability Challenges

Ongoing profitability issues, including negative EBIT and net income, indicate operational challenges that could hinder long-term financial health and growth potential.

Declining Revenue

Declining revenue over several years suggests challenges in maintaining market share and competitiveness, which could impact long-term growth and sustainability.

Negative Cash Flow

Negative cash flow from operations limits the company's ability to invest in growth opportunities and may strain financial resources, impacting long-term operational stability.

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.

How the Company Makes Money

Nextware Ltd. generates revenue primarily through the sale of software licenses, subscription-based services, and consulting fees. The company offers its cloud-based solutions on a subscription model, providing recurring revenue as clients pay for ongoing access to their services. Additionally, revenue is derived from custom software development and implementation projects for enterprises, which can involve significant upfront fees. Key partnerships with major cloud service providers and technology firms also bolster its earnings by expanding its customer base and enhancing its service offerings, while strategic alliances with industry leaders facilitate access to new markets and clients.

Nextware Ltd. Financial Statement Overview

Summary

Nextware Ltd. faces challenges with profitability and cash flow generation, impacting its overall financial health. While the balance sheet shows a strong equity position and low leverage, the income statement reflects ongoing operational difficulties. Improvement in cash flow management and profitability is crucial for future growth.

Income Statement

Nextware Ltd. has experienced fluctuating revenue with a decline from 2021 to 2025. The gross profit margin has been relatively stable, but the company has struggled with negative EBIT and net income in recent years, indicating operational challenges. The net profit margin is negative, reflecting ongoing profitability issues.

Balance Sheet

The company maintains a strong equity position with a high equity ratio, suggesting financial stability. The debt-to-equity ratio is low, indicating conservative leverage. However, the declining stockholders' equity over the years is a concern. Return on equity is negative due to net losses, which impacts overall financial health.

Cash Flow

Operating cash flow has been inconsistent, with a significant drop in recent years. Free cash flow has also been negative, indicating challenges in generating cash from operations. The company has managed capital expenditures prudently, but the overall cash flow position needs improvement to support growth and stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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	323.56M	359.26M	322.15M	555.45M	684.97M
Stockholders Equity	1.13B	1.22B	1.33B	1.52B	1.54B	855.55M
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: 169.00
• 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:4814, the sentiment is Negative. The current price of 169 is below the 20-day moving average (MA) of 173.55, below the 50-day MA of 185.56, and below the 200-day MA of 169.24, indicating a bearish trend. The MACD of -4.21 indicates Positive momentum. The RSI at 42.20 is Neutral, neither overbought nor oversold. The STOCH value of 17.33 is Positive, 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
3974	73 Outperform	¥2.80B	14.23	―	2.36%	0.40%	21.21%
3670	67 Neutral	¥2.46B	8.60	―	2.68%	-9.03%	53.70%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4444	56 Neutral	¥1.80B	-33.98	―	―	5.17%	-148.66%
5247	54 Neutral	¥2.20B	-140.20	―	―	15.55%	-114.56%
4814	53 Neutral	¥2.15B	-28.58	―	―	-4.07%	53.47%
9240	51 Neutral	¥2.63B	27.95	―	―	6.61%	12.06%