Nextware Ltd. (4814) AI Stock Analysis

• Market Cap: ¥2.29B
• 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: 53 Neutral
• Price Target: ¥201.00 ▲(16.86% Upside)
• Action: Reiterated Date: 01/09/26
• Date: Action: Reiterated 01/09/26

Overall score reflects a stable, low-leverage balance sheet but ongoing profitability and cash flow challenges. Technicals are supportive with the stock above major moving averages and positive MACD, though the very high RSI indicates elevated near-term pullback risk. Valuation remains pressured due to negative earnings and no dividend support.

Positive Factors

Low leverage / strong equity ratio

A high equity ratio and low leverage provide durable financial flexibility, allowing Nextware to finance operations or strategic initiatives without heavy interest burdens. Over 2–6 months this supports resilience to shocks, preserves borrowing capacity, and reduces insolvency risk while it works to restore profitability.

Subscription-based recurring revenue

A subscription model yields recurring, more predictable revenue streams and higher customer lifetime value than one-off projects. Structurally this supports steadier revenue visibility, enables recurring margin improvement from scale, and facilitates upsell/cross-sell initiatives across finance, healthcare, and retail segments.

Prudent capital expenditure management

Conservative capex reduces cash burn and preserves runway while revenues and profits recover. Over months this prudent investment approach helps prioritize profitable product work, limits the need for immediate external financing, and maintains flexibility to allocate cash to higher-return initiatives.

Negative Factors

Multi-year revenue decline

A sustained revenue decline erodes scale economics and undermines the subscription model's benefits, making it harder to cover fixed costs and invest in product development. If top-line contraction persists, margin recovery and long-term competitiveness across target sectors will be constrained.

Persistent negative EBIT and net income

Ongoing operating losses reduce retained earnings and limit reinvestment capacity. Persistently negative EBIT forces management to prioritize cost cuts over growth, risks diluting strategic capabilities, and may necessitate external funding that could alter capital structure or slow strategic initiatives.

Inconsistent operating cash flow and negative FCF

Weak and inconsistent operating cash generation undermines the company's ability to self-fund growth, R&D, and customer success investments. Over a medium horizon this increases reliance on financing, constrains strategic flexibility, and raises execution risk for scaling subscription and services revenues.

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

Mixed fundamentals: the balance sheet is relatively stable with a high equity ratio and low leverage, but the income statement shows ongoing losses (negative EBIT and net income) and revenue decline over 2021–2025. Cash flow is also a concern, with inconsistent operating cash flow and negative free cash flow.

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	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	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: 172.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• 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 196.80, below the 50-day MA of 203.26, and below the 200-day MA of 181.91, indicating a neutral trend. The MACD of -3.25 indicates Positive momentum. The RSI at 42.67 is Neutral, neither overbought nor oversold. The STOCH value of 46.67 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	¥2.90B	8.12	―	3.28%	9.68%	25.15%
4421	79 Outperform	¥2.83B	22.68	―	2.86%	5.74%	5.97%
3974	73 Outperform	¥2.90B	12.70	―	2.35%	0.40%	21.21%
6193	70 Outperform	¥2.99B	15.80	―	1.52%	4.73%	135.75%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4416	57 Neutral	¥2.36B	268.52	―	―	5.05%	-50.80%
4814	53 Neutral	¥2.29B	-13.32	―	―	-4.07%	53.47%