Ridge-i Inc. (5572) AI Stock Analysis

• Market Cap: ¥10.23B
• Dividend Yield: N/A
• Average Volume (3M): 197.38K
• Price to Earnings (P/E): 73.8
• Beta (1Y): 1.24
• Revenue Growth: 60.41%
• EPS Growth: -27.67%
• Country: JP
• Employees: 29
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 9.38
• Shares Outstanding: 4,315,320
• 10 Day Avg. Volume: 41,700
• 30 Day Avg. Volume: 197,380
• PEG Ratio: 6.04
• Price to Book (P/B): 4.63
• Price to Sales (P/S): 3.92
• P/FCF Ratio: 1.45K
• 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): 44.1
• Revenue Forecast (FY): ¥2.80B

• Rating: 56 Neutral
• Price Target: ¥2,293.00 ▲(15.46% Upside)
• Action: Reiterated Date: 12/30/25
• Date: Action: Reiterated 12/30/25

The score is driven primarily by solid financial safety (no leverage) and recent growth, but is held back by weak cash-flow reliability and compressed margins. Bearish technicals and a high P/E further pressure the overall rating.

Positive Factors

Conservative balance sheet (no debt)

Effectively zero leverage gives durable financial flexibility: lower solvency risk, capacity to fund R&D or product investment internally, and ability to withstand cyclical downturns without needing external financing. This supports long-term stability and optionality.

Strong recent revenue growth

Sustained top-line expansion indicates growing market adoption and product-market fit, enabling scale economies over time. Continued revenue growth provides a base to improve unit economics, invest in sales/engineering, and expand margins if cost discipline holds.

Positive operating and net profitability

Generating positive EBIT and net margins demonstrates the business can monetize its offerings and cover overhead. Even with compression, positive margins create capacity to fund reinvestment, reduce reliance on external capital, and are a foundation for sustainable cash generation if conversion improves.

Negative Factors

Weak and volatile cash conversion

Very low free cash flow relative to net income and volatile historical cash flows weaken earnings quality and limit internal funding for capex, R&D, or shareholder returns. Persistent conversion weakness reduces strategic flexibility and raises refinancing or liquidity risk.

Material margin compression and earnings volatility

Significant margin erosion and multi-year swings in profitability indicate exposure to pricing or cost pressures and inconsistent operating leverage. That instability makes forward margin recovery uncertain and complicates reliable forecasting and investment decisions.

Moderate returns on equity

Mid-single-digit ROE suggests the company currently converts its equity base into limited investor returns, signaling capital inefficiency. Over time this constrains shareholder value creation unless margins, asset turns, or growth sustainably improve.

Ridge-i Inc. Business Overview & Revenue Model

Company Description

Ridge-i Inc. engages in the consulting and development of artificial intelligence (AI)/deep learning technologies. It offers problem solving consulting services; new business creation services; sells licensed AI products; environmental and social infrastructure monitoring platforms; and AI analysis solutions using satellite data. The company's products are used in manufacturing industry, space/satellite, infrastructure plants, environmental monitoring, security/crime prevention, distribution/logistics, architecture, media, and event venues and store applications. Ridge-i Inc. was incorporated in 2016 and is based in Tokyo, Japan.

How the Company Makes Money

Ridge-i Inc. generates revenue through the development and deployment of AI solutions and services. The company earns money by offering AI consulting services, where it advises businesses on integrating AI technologies into their operations. Additionally, Ridge-i develops custom AI software and applications tailored to the specific needs of its clients, which is a significant revenue stream. The company also offers subscription-based cloud services, allowing clients to access and utilize its AI tools and platforms. Partnerships with other technology firms and collaborations on large-scale AI projects contribute to its earnings, enhancing its market reach and capabilities.

Ridge-i Inc. Financial Statement Overview

Summary

Strong recent revenue growth and positive profitability are supported by a very conservative balance sheet with effectively no debt. However, earnings quality is tempered by meaningful margin compression versus FY2024 and weak/volatile cash conversion, with FY2025 free cash flow far below net income.

Income Statement

Revenue growth has been strong recently (FY2025 up ~26.7% after FY2024 growth), and profitability is positive with EBIT margin ~10.9% and net margin ~5.4% in FY2025. However, margins have compressed materially versus FY2024 (net margin ~11.4%), and results have been volatile over the cycle (losses in FY2021 and a revenue decline in FY2023), which tempers the quality/stability of earnings.

Balance Sheet

The balance sheet is conservatively positioned with effectively no debt (debt-to-equity ~0), providing strong financial flexibility and low solvency risk. Equity has grown over time, supporting a higher asset base. The main weakness is only moderate returns on equity (mid-single-digits in FY2024–FY2025), suggesting profitability is not yet high relative to the capital base.

Cash Flow

Cash generation has been inconsistent. FY2024 showed strong conversion (free cash flow close to net income and robust free cash flow growth), but FY2025 weakened sharply with operating cash flow of ~¥51m and free cash flow of only ~¥7m versus ~¥139m of net income—indicating low cash conversion in the most recent year. Prior periods also show volatility, including negative operating and free cash flow in FY2023.

Breakdown	Jul 2025	Jul 2024	Jul 2023	Jul 2022	Jul 2021
Income Statement
Total Revenue	2.59B	1.07B	790.38M	968.52M	419.44M
Gross Profit	1.32B	735.61M	515.65M	612.58M	191.49M
EBITDA	367.00M	171.49M	83.97M	88.45M	-123.40M
Net Income	139.00M	121.70M	44.56M	150.06M	-148.76M
Balance Sheet
Total Assets	2.85B	2.36B	2.06B	1.56B	1.39B
Cash, Cash Equivalents and Short-Term Investments	1.83B	1.37B	1.72B	1.38B	1.21B
Total Debt	0.00	0.00	0.00	0.00	2.84M
Total Liabilities	389.00M	222.89M	73.18M	147.63M	128.91M
Stockholders Equity	2.20B	2.14B	1.99B	1.41B	1.26B
Cash Flow
Free Cash Flow	7.00M	342.58M	-184.98M	173.61M	-81.42M
Operating Cash Flow	51.00M	348.62M	-145.76M	178.19M	-76.46M
Investing Cash Flow	-53.00M	-723.02M	-38.26M	-4.58M	-4.96M
Financing Cash Flow	-286.00M	24.42M	521.65M	-2.84M	777.16M

Ridge-i Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1986.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5572, the sentiment is Positive. The current price of 1986 is below the 20-day moving average (MA) of 2147.05, below the 50-day MA of 2116.04, and below the 200-day MA of 2544.26, indicating a neutral trend. The MACD of 19.77 indicates Negative momentum. The RSI at 65.68 is Neutral, neither overbought nor oversold. The STOCH value of 56.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5572.

Ridge-i Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4168	67 Neutral	¥9.81B	10.50	―	0.70%	9.78%	-23.98%
4193	63 Neutral	¥11.27B	43.01	―	2.81%	12.49%	-57.87%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5591	61 Neutral	¥6.41B	36.75	―	―	35.46%	59.47%
4015	57 Neutral	¥7.72B	57.53	―	―	49.33%	104.72%
5572	56 Neutral	¥10.23B	73.76	―	―	60.41%	-27.67%
4011	43 Neutral	¥10.90B	189.26	―	―	34.56%	4.59%