HOUSEI Inc. (5035) AI Stock Analysis

• Market Cap: ¥2.97B
• Dividend Yield: 0.72%
• Average Volume (3M): 9.45K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.55
• Revenue Growth: 4.40%
• EPS Growth: -336.50%
• Country: JP
• Employees: 455
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 5.03
• Shares Outstanding: 7,094,200
• 10 Day Avg. Volume: 11,090
• 30 Day Avg. Volume: 9,453
• PEG Ratio: 0.05
• Price to Book (P/B): 0.90
• Price to Sales (P/S): 0.58
• P/FCF Ratio: 2.72
• 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: 52 Neutral
• Price Target: ¥420.00 ▲(4.48% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

Overall score is held back primarily by weakening earnings (net loss and cooling/declining revenue) and a technically weak price trend below major moving averages. These are partly offset by moderate balance-sheet leverage and strong 2025 free cash flow, but valuation is also constrained by a negative P/E and a low dividend yield.

Positive Factors

Balance-sheet strength

A capital structure with equity materially larger than debt and reduced leverage provides durable solvency and financial flexibility. This supports continued R&D and product investment, cushions operating volatility, and reduces refinancing risk over the next several quarters.

Strong 2025 free cash flow

A large free cash flow outturn in 2025 improves capacity to fund operations, capex and strategic initiatives without relying on external financing. Even if partly timing-driven, sustained FCF at this scale materially enhances runway and execution optionality across a 2–6 month horizon.

Core operating profitability (EBITDA-positive)

EBITDA positivity indicates the underlying software business still generates gross profit and covers direct operating costs. This suggests the revenue model and cost structure can support recovery if below-the-line pressures are controlled, preserving long-term business viability.

Negative Factors

Cooling and declining revenue

A shift from prior strong growth to modest growth and then contraction weakens scale economics and limits ability to leverage fixed-cost investments. Sustained topline softness over months reduces margin expansion prospects and constrains reinvestment for product and market development.

Swing to net loss in 2025

The move to a net loss, driven by below-the-line items, undermines earnings consistency and return generation. Persistent losses can erode retained capital, restrict strategic spending, and force management to prioritize short-term cost controls over long-term growth initiatives.

Volatile historical cash flow

Historical swings between strong and negative cash generation increase uncertainty about repeatability of recent FCF. This volatility complicates forecasting, elevates funding risk if negative trends reappear, and reduces the reliability of cash as a buffer for operational setbacks.

HOUSEI Inc. Business Overview & Revenue Model

Company Description

HOUSEI Inc. provides various cloud services in Japan. The company offers contract system development, IT engineer dispatch, cross-border EC platform, AI/big data related technology development, Chinese font license sale, and printing consulting services, as well as sells printing technology products and software. It serves the media industry such as newspapers, publishers, and information publishers, as well as financial, manufacturing, retail, and service industries. The company was founded in 1996 and is headquartered in Tokyo, Japan.

How the Company Makes Money

HOUSEI Inc. generates revenue through multiple streams, primarily from the sale of its software solutions and smart building technology products. Key revenue streams include direct sales to real estate developers and property management firms, subscription fees for its software as a service (SaaS) offerings, and consulting services that help clients implement and optimize their technology solutions. The company has established significant partnerships with construction firms and technology providers, enhancing its market presence and driving sales. Additionally, HOUSEI Inc. benefits from recurring revenue through maintenance and support contracts, which provide ongoing income from existing clients.

HOUSEI Inc. Financial Statement Overview

Summary

Mixed fundamentals: the income statement is weakening (slowing/negative revenue growth and a swing to a net loss in 2025), offset by a reasonably sound balance sheet with moderate leverage and a strong rebound in 2025 free cash flow. Earnings consistency and growth momentum are the main risks despite solid solvency and cash generation.

Income Statement

Revenue growth has cooled materially, moving from strong growth earlier (2021–2023) to modest growth in 2024 and a decline in 2025. Profitability has also deteriorated: margins were modestly positive in 2022–2024, but 2025 turned to a net loss despite remaining EBITDA-positive, indicating pressure from below-the-line items and/or higher non-operating costs. Gross profit dollars remain meaningful, but the overall earnings trajectory is weakening and less consistent than earlier years.

Balance Sheet

The balance sheet looks reasonably sound with equity representing a large portion of the capital base (equity of ~¥3.06B vs. debt of ~¥0.55B in 2025). Leverage improved versus 2020–2021 levels and remains moderate based on prior-year debt-to-equity readings (roughly ~0.17–0.24 in 2022–2024). The main drawback is profitability/return pressure: returns on equity were modest in 2022–2024 and the 2025 net loss likely undermines returns, even though balance sheet solvency appears stable.

Cash Flow

Cash generation is a relative bright spot, with positive free cash flow in most years and a very strong step-up in 2025 (operating cash flow ~¥1.04B and free cash flow ~¥1.01B). That said, cash flow quality has been volatile historically (notably negative operating and free cash flow in 2023, and negative free cash flow in 2020). With 2025 posting a net loss but strong cash flow, results suggest meaningful working-capital or timing effects that improve cash but may not be fully repeatable.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.96B	4.78B	4.92B	4.64B	4.25B	4.10B
Gross Profit	1.53B	1.35B	1.53B	1.23B	1.15B	1.10B
EBITDA	353.53M	297.76M	399.33M	387.12M	362.70M	417.29M
Net Income	117.57M	-195.09M	126.00M	147.00M	134.71M	271.44M
Balance Sheet
Total Assets	4.82B	4.79B	5.13B	4.72B	4.23B	3.92B
Cash, Cash Equivalents and Short-Term Investments	1.75B	1.42B	840.29M	830.00M	1.58B	1.09B
Total Debt	636.79M	545.28M	774.76M	729.00M	511.30M	788.49M
Total Liabilities	1.68B	1.71B	1.83B	1.53B	1.27B	1.57B
Stockholders Equity	3.13B	3.06B	3.29B	3.17B	2.95B	2.35B
Cash Flow
Free Cash Flow	0.00	1.01B	279.96M	-470.00M	336.17M	379.54M
Operating Cash Flow	0.00	1.04B	361.14M	-417.00M	395.54M	413.16M
Investing Cash Flow	0.00	-158.90M	-88.87M	-639.00M	-258.78M	-28.57M
Financing Cash Flow	0.00	-305.17M	-83.85M	269.00M	131.09M	-49.45M

HOUSEI Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 402.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5035, the sentiment is Negative. The current price of 402 is below the 20-day moving average (MA) of 430.95, below the 50-day MA of 424.87, and below the 200-day MA of 463.32, indicating a bearish trend. The MACD of -0.71 indicates Positive momentum. The RSI at 42.48 is Neutral, neither overbought nor oversold. The STOCH value of 25.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5035.

HOUSEI Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4429	73 Outperform	¥4.30B	13.18	―	―	―	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4447	61 Neutral	¥3.06B	47.92	―	4.17%	-15.23%	-65.39%
4174	55 Neutral	¥2.78B	-134.48	―	3.41%	18.78%	-134.64%
4484	55 Neutral	¥5.07B	25.77	―	―	4.36%	-0.02%
5035	52 Neutral	¥2.97B	-14.70	―	0.72%	4.40%	-336.50%
4387	50 Neutral	¥3.24B	47.97	―	―	-4.30%	―