Arent, Inc. (5254) AI Stock Analysis

• Market Cap: ¥30.25B
• Dividend Yield: N/A
• Average Volume (3M): 28.11K
• Price to Earnings (P/E): 21.4
• Beta (1Y): 1.00
• Revenue Growth: 40.99%
• EPS Growth: -36.76%
• Country: JP
• Employees: 153
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 153.43
• Shares Outstanding: 6,954,295
• 10 Day Avg. Volume: 24,360
• 30 Day Avg. Volume: 28,110
• PEG Ratio: -9.95
• Price to Book (P/B): 6.46
• Price to Sales (P/S): 7.70
• P/FCF Ratio: 38.88
• 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): 221.9
• Revenue Forecast (FY): ¥5.00B

• Rating: 77 Outperform
• Price Target: ¥4,553.00 ▲(55.34% Upside)
• Action: Upgraded Date: 02/21/26
• Date: Action: Upgraded 02/21/26

The score is primarily driven by strong financial performance (high growth, strong margins, low leverage, and solid cash conversion). Technicals are supportive but appear overextended (overbought RSI/Stoch), which tempers the outlook. Valuation is moderate based on the provided P/E, with no dividend yield data available.

Positive Factors

Revenue Growth

Sustained 26.18% revenue growth signals durable end-market demand and product-market fit for Arent's software. Over 2-6 months this supports recurring contract expansion, increases scale efficiencies, and provides a stable base for reinvestment in R&D and sales to drive further durable growth.

Profitability / Margins

High gross and EBIT margins indicate strong pricing power and efficient operations in Arent's application software business. Sustained margin levels provide durable ability to fund R&D, sales, and strategic initiatives while absorbing modest cost pressures without immediate profitability deterioration.

Cash Generation & Balance Sheet Strength

Robust cash conversion (OCF/Net Income 1.31; FCF/Net Income 1.26) and low leverage support durable financial flexibility. This cash generation lets Arent fund organic growth, absorb cyclical shocks, and avoid over-reliance on external financing over the coming months.

Negative Factors

Slight Decline in Net Income

A recent decline in net income suggests emerging margin pressure or rising costs. If this trend persists, it could erode the company's ability to reinvest and sustain current profitability levels, making growth initiatives more expensive and increasing sensitivity to competition.

Equity Growth Compression

Slowing growth in shareholders' equity may indicate reduced retained earnings accumulation or slower capitalization of profits. Over several months this can constrain internally funded expansion and heighten reliance on external capital for larger strategic investments.

Limited Scale / Small Workforce

A relatively small headcount (153) can limit ability to scale sales, customer support, and product development simultaneously. Over the medium term this may slow enterprise penetration, delay new feature rollouts, and increase dependence on hiring to sustain faster growth.

Arent, Inc. Business Overview & Revenue Model

Company Description

Arent Inc. engages in the development of SaaS based solutions for construction industry in Japan. The company offers Lightning BIM software for architecture and structure industry; and PlantStream software for plant industry. It also provides consulting services. The company was incorporated in 2012 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Arent, Inc. generates revenue through multiple streams, including the sale of proprietary technology products, offering engineering and consulting services, and entering into long-term contracts with clients for customized solutions. The company benefits from strategic partnerships with key industry players, which enhance its market presence and provide access to new customer segments. Additionally, Arent, Inc. capitalizes on research and development initiatives, allowing it to introduce new products and maintain a competitive edge in the market.

Arent, Inc. Financial Statement Overview

Summary

Strong overall fundamentals supported by 26.18% revenue growth, solid profitability (63.36% gross margin; 15.72% net margin; 41.97% EBIT margin), conservative leverage (0.067 debt-to-equity), and healthy cash conversion (operating cash flow to net income 1.31; free cash flow to net income 1.26). Offsetting factors include a slight decline in net income and a modest decline in operating cash flow versus the prior year.

Income Statement

Arent, Inc. has demonstrated strong revenue growth with a 26.18% increase in the latest year, indicating robust demand for its software applications. The company maintains healthy profitability metrics, with a gross profit margin of 63.36% and a net profit margin of 15.72%. The EBIT margin is also strong at 41.97%, showcasing efficient operational management. However, the slight decline in net income compared to the previous year suggests potential cost pressures or increased competition.

Balance Sheet

The balance sheet of Arent, Inc. reflects a solid financial position with a low debt-to-equity ratio of 0.067, indicating conservative leverage. The return on equity is commendable at 13.20%, reflecting effective use of shareholder funds. The equity ratio stands at 78.89%, highlighting a strong equity base relative to total assets. However, the decrease in stockholders' equity growth compared to previous years could be a concern if it continues.

Cash Flow

Arent, Inc. shows strong cash flow management with a significant increase in free cash flow, marked by an 'Infinity' growth rate due to a low base effect. The operating cash flow to net income ratio of 1.31 indicates efficient cash generation relative to net income. The free cash flow to net income ratio of 1.26 further underscores the company's ability to convert profits into cash. However, the slight decline in operating cash flow compared to the previous year warrants monitoring.

Breakdown	Jun 2024	Jun 2023	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	4.03B	2.94B	2.02B	1.01B	722.03M
Gross Profit	2.55B	1.70B	1.07B	501.99M	360.99M
EBITDA	1.18B	991.61M	547.98M	36.74M	74.14M
Net Income	633.50M	658.16M	317.98M	-48.05M	-19.52M
Balance Sheet
Total Assets	6.08B	5.06B	4.52B	3.06B	2.18B
Cash, Cash Equivalents and Short-Term Investments	3.83B	3.85B	3.21B	1.93B	1.22B
Total Debt	322.77M	394.71M	565.02M	813.23M	1.10B
Total Liabilities	1.28B	935.19M	1.05B	1.07B	1.34B
Stockholders Equity	4.80B	4.12B	3.46B	1.98B	832.61M
Cash Flow
Free Cash Flow	797.72M	829.71M	823.00M	150.67M	226.71M
Operating Cash Flow	827.55M	850.22M	833.68M	170.71M	239.57M
Investing Cash Flow	-828.21M	-43.30M	-454.62M	-368.34M	-971.16M
Financing Cash Flow	-19.55M	-168.81M	904.64M	906.69M	1.01B

Arent, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2931.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5254, the sentiment is Positive. The current price of 2931 is below the 20-day moving average (MA) of 3854.00, below the 50-day MA of 3523.42, and below the 200-day MA of 4218.77, indicating a bullish trend. The MACD of 199.05 indicates Negative momentum. The RSI at 81.37 is Negative, neither overbought nor oversold. The STOCH value of 95.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5254.

Arent, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3771	77 Outperform	¥30.44B	12.82	―	2.93%	11.53%	23.23%
5254	77 Outperform	¥30.25B	21.40	―	―	40.99%	-36.76%
3921	74 Outperform	¥24.42B	14.16	―	2.53%	16.13%	62.27%
4477	73 Outperform	¥36.31B	20.04	―	―	27.97%	-5.25%
9553	68 Neutral	¥24.10B	45.41	―	―	14.28%	-30.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5027	49 Neutral	¥30.52B	33.52	―	―	20.84%	10.41%