Arent, Inc. (5254) AI Stock Analysis

• Market Cap: ¥29.97B
• Dividend Yield: N/A
• Average Volume (3M): 28.11K
• Price to Earnings (P/E): 4.8
• Beta (1Y): 0.86
• 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: -9.90
• Price to Book (P/B): 6.46
• Price to Sales (P/S): 7.70
• P/FCF Ratio: 38.25
• 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: ¥5,153.00 ▲(75.81% 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 demonstrates durable demand for Arent's software applications. Persistent top-line expansion supports scale economics, funds continued product and sales investment, and provides a multi-quarter runway to improve operating leverage and market penetration.

Profitability & Margins

High gross and operating margins reflect strong unit economics common in application software. Healthy margins provide a structural buffer against cost swings, enable reinvestment in R&D and sales, and support sustainable operating cash flow generation over the medium term.

Balance Sheet & Cash Conversion

Very low leverage combined with strong operating and free cash flow conversion indicates financial resilience and flexibility. This durable cash generation supports organic growth, potential M&A, and cushions the business during downturns without excessive reliance on external financing.

Negative Factors

Net Income Trend

A reported slight decline in net income, despite revenue growth, suggests rising costs or margin pressure in certain areas. If this trend continues it can erode return on equity, limit reinvestment capacity, and signal emerging competitive or cost-structure challenges over coming quarters.

Operating Cash Flow Trend

A modest drop in operating cash flow versus the prior year, even with solid conversion ratios, reduces internal funding for capex and expansion. Continued OCF weakness would increase reliance on external funding and weaken the company's ability to sustain investment through cyclical slowdowns.

Limited Scale / Headcount

A relatively small workforce (153 employees) limits scale in sales, product development, and geographic expansion compared with larger peers. Structural constraints on headcount may slow go-to-market breadth and product feature development, making growth more dependent on productivity gains.

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.

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	2.62B	1.78B	1.13B	608.73M	388.27M
EBITDA	1.82B	1.26B	725.56M	251.82M	171.92M
Net Income	633.50M	658.16M	317.98M	-48.05M	-19.52M
Balance Sheet
Total Assets	6.09B	5.06B	4.52B	3.08B	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	1.08B	1.34B
Stockholders Equity	4.80B	4.12B	3.46B	1.98B	832.61M
Cash Flow
Free Cash Flow	810.90M	830.95M	823.24M	164.00M	233.33M
Operating Cash Flow	840.73M	850.22M	833.68M	170.71M	239.57M
Investing Cash Flow	-841.39M	-43.30M	-454.62M	-368.34M	-871.16M
Financing Cash Flow	-19.55M	-168.81M	904.64M	906.69M	909.51M

Arent, Inc. Technical Analysis

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

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 4328.50, below the 50-day MA of 3926.50, and below the 200-day MA of 4205.09, indicating a neutral trend. The MACD of 144.71 indicates Positive momentum. The RSI at 55.65 is Neutral, neither overbought nor oversold. The STOCH value of 14.03 is Positive, 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	¥28.82B	12.67	―	2.93%	11.53%	23.23%
5254	77 Outperform	¥29.97B	4.78	―	―	40.99%	-36.76%
3921	76 Outperform	¥23.41B	13.78	―	2.53%	16.13%	62.27%
4477	73 Outperform	¥33.96B	20.10	―	―	27.97%	-5.25%
9553	68 Neutral	¥23.68B	15.25	―	―	14.28%	-30.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5027	49 Neutral	¥26.49B	39.28	―	―	20.84%	10.41%