circlace Inc (5029) AI Stock Analysis

• Market Cap: ¥2.79B
• Dividend Yield: N/A
• Average Volume (3M): 20.82K
• Price to Earnings (P/E): 23.5
• Beta (1Y): 0.74
• Revenue Growth: 29.44%
• EPS Growth: 485.00%
• Country: JP
• Employees: 296
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -2.45
• Shares Outstanding: 4,377,916
• 10 Day Avg. Volume: 26,200
• 30 Day Avg. Volume: 20,816
• PEG Ratio: -0.06
• Price to Book (P/B): 4.38
• Price to Sales (P/S): 1.14
• P/FCF Ratio: 20.67
• 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: 62 Neutral
• Price Target: ¥676.00 ▼(-35.62% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

Score is driven primarily by strong financial performance (profitability turnaround, solid cash flow, and low leverage), partially offset by very weak technicals (price well below key moving averages with negative MACD and extremely oversold RSI/Stoch). Valuation is moderate (P/E ~22) but lacks dividend support.

Positive Factors

Revenue growth & profitability turnaround

Sustained revenue growth and a shift from losses to positive net income indicate the business model is scaling and moving toward durable profitability. This strengthens internal funding for R&D, product development and recurring revenue expansion (subscriptions/licenses), reducing reliance on external capital over the next several quarters.

Strong operating cash flow and rising FCF

Consistent growth in operating cash flow and rising free cash flow provide a stable internal source to fund capex, software development and expansion of recycling tech without heavy external financing. That improves resilience and supports multi-quarter investment plans and strategic partnerships.

Low leverage and improved ROE

A conservative leverage profile and higher ROE give management flexibility to pursue acquisitions, scale subscription/licensing initiatives, or absorb cyclical shocks. Strong equity position supports long-term strategic spending while limiting bankruptcy and financing risks over the medium term.

Negative Factors

Relatively high total liabilities

While equity and leverage metrics look healthy, elevated total liabilities versus assets raise structural liquidity risk if operating cash flow weakens. Higher liabilities can constrain strategic flexibility, increase refinancing risk and force prioritization between debt servicing and growth investments over coming quarters.

Room to improve operating margins

Positive but suboptimal EBIT/EBITDA margins imply the company still faces cost structure or scale inefficiencies. Without sustainable margin expansion, revenue growth may not translate proportionally to free cash flow, limiting long-term return potential and ability to fund organic growth or return capital to shareholders.

Volatility in investing & financing flows

Variable investing and financing cash flows suggest episodic capital spending, M&A or external funding reliance. Such volatility reduces predictability of reinvestment and can force dilution or leverage during funding events, complicating multi-quarter planning and risking interruption of steady organic growth.

circlace Inc Business Overview & Revenue Model

Company Description

circlace Inc supports the introduction and operation of cloud systems and provides in-house developed cloud systems in Japan. The company offers consulting services on digital transformation and business improvement using ICT. It develops and sells SaaS products, including Circlace, an integrated digital communication platform that aggregates communication and documents generated in business, and enables visualization, accumulation, sharing, and utilization of knowledge inside and outside the company; AGAVE, a business-specific cloud service that centralizes procedures necessary for labor management of overseas expatriates; and Prigister One, a personal information acquisition application management tool. In addition, the company provides a one-stop service from design to development, establishment, maintenance, and operation support for the introduction of cloud solutions, such as Salesforce, Anaplan, etc. circlace Inc was incorporated in 2012 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Circlace Inc generates revenue through multiple streams, primarily by offering consulting services to businesses seeking to transition to circular economy practices. The company charges fees for its consultancy, which includes assessments, strategy development, and implementation support. Additionally, Circlace leverages its proprietary recycling technologies by licensing them to manufacturers and municipalities, creating a recurring revenue model. The software platforms developed by Circlace are sold through subscriptions, providing ongoing income as clients utilize the service for waste tracking and management. Strategic partnerships with environmental organizations and governmental agencies also enhance revenue opportunities through grants and collaborative projects aimed at sustainability initiatives.

circlace Inc Financial Statement Overview

Summary

Strong overall fundamentals: revenue growth and a return to positive net income (Income Statement Score 85), supported by solid cash generation and rising free cash flow (Cash Flow Score 80). Balance sheet is stable with low leverage and improved ROE (Balance Sheet Score 78), though liabilities remain a risk to monitor.

Income Statement

Circlace Inc has shown strong revenue growth over the years, with a significant increase in total revenue from 2024 to 2025. The gross profit margin has remained robust, indicating effective cost management. The company has turned around its net income from losses in previous years to a positive figure in 2025, reflecting improved profitability. However, the EBIT and EBITDA margins, while positive, suggest room for further operational efficiency improvements.

Balance Sheet

The company's balance sheet reflects a healthy equity position with a strong equity ratio, indicating financial stability. The debt-to-equity ratio is low, suggesting prudent leverage management. Return on equity has improved significantly, showcasing enhanced shareholder value. However, the relatively high total liabilities compared to assets could pose a risk if not managed carefully.

Cash Flow

Circlace Inc's cash flow statement reveals a positive trend in operating cash flow, which has grown substantially, supporting the company's operational activities. The free cash flow has also shown a healthy increase, indicating effective capital expenditure management. The operating cash flow to net income ratio is strong, suggesting efficient cash generation relative to earnings. However, fluctuations in investing and financing cash flows warrant attention to ensure sustainable growth.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	4.00B	3.80B	2.90B	2.53B	2.27B	1.81B
Gross Profit	1.88B	1.76B	1.45B	1.26B	1.22B	898.27M
EBITDA	229.65M	193.26M	-35.26M	65.73M	154.48M	-41.79M
Net Income	170.08M	184.05M	-67.38M	11.03M	175.57M	-63.18M
Balance Sheet
Total Assets	1.65B	1.82B	1.54B	1.15B	719.51M	535.29M
Cash, Cash Equivalents and Short-Term Investments	319.67M	833.35M	807.96M	675.35M	289.86M	240.87M
Total Debt	196.89M	211.46M	224.46M	127.61M	200.00M	220.00M
Total Liabilities	769.30M	893.30M	751.98M	338.94M	499.65M	490.38M
Stockholders Equity	903.09M	992.59M	785.86M	806.42M	219.87M	44.91M
Cash Flow
Free Cash Flow	0.00	210.48M	93.19M	-105.42M	112.73M	21.70M
Operating Cash Flow	0.00	220.29M	105.35M	-32.24M	117.07M	24.20M
Investing Cash Flow	0.00	-197.63M	-102.16M	-73.18M	-45.89M	6.58M
Financing Cash Flow	0.00	3.79M	126.06M	490.91M	-22.19M	177.12M

circlace Inc Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1050.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5029, the sentiment is Neutral. The current price of 1050 is above the 20-day moving average (MA) of 742.45, above the 50-day MA of 931.38, and below the 200-day MA of 1154.84, indicating a bearish trend. The MACD of -108.84 indicates Positive momentum. The RSI at 29.55 is Positive, neither overbought nor oversold. The STOCH value of 66.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5029.

circlace Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5256	69 Neutral	¥2.92B	16.36	―	―	13.48%	61.77%
5033	66 Neutral	¥4.93B	13.38	―	―	7.60%	19.13%
5028	65 Neutral	¥3.13B	30.86	―	―	33.55%	293.32%
5029	62 Neutral	¥2.79B	23.49	―	―	29.44%	485.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3976	54 Neutral	¥2.40B	-11.69	―	―	-14.55%	-8.13%
3909	51 Neutral	¥2.65B	2.75	―	―	-32.56%	―