Ridge-i Inc. (5572) AI Stock Analysis

• Market Cap: ¥8.90B
• Dividend Yield: N/A
• Average Volume (3M): 197.38K
• Price to Earnings (P/E): 33.8
• Beta (1Y): 1.21
• Revenue Growth: 60.41%
• EPS Growth: -27.67%
• Country: JP
• Employees: 29
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 15.74
• Shares Outstanding: 4,315,320
• 10 Day Avg. Volume: 41,700
• 30 Day Avg. Volume: 197,380
• PEG Ratio: 5.62
• Price to Book (P/B): 4.50
• Price to Sales (P/S): 3.81
• P/FCF Ratio: 1.30K
• 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: 59 Neutral
• Price Target: ¥2,375.00 ▲(19.59% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is primarily supported by solid financial strength from a near zero-debt balance sheet and positive profitability, but it is held back by weak/volatile cash flow conversion and a technically weak price trend below key moving averages. A high P/E further pressures the overall score.

Positive Factors

Near-zero debt balance sheet

A virtually debt-free balance sheet provides durable financial flexibility, lowers solvency and interest-rate risk, and preserves optionality for strategic investments, R&D, or M&A. This structural strength supports resilience across economic cycles and reduces fixed financial burdens.

Strong recent revenue growth

Sustained top-line expansion signals product-market fit and growing customer adoption. Durable revenue growth creates scope for operating leverage, supports reinvestment in product and sales, and underpins medium-term scaling of margins and cash generation if maintained.

Positive operating and net profitability

Consistent positive operating profits indicate the business can generate earnings from core operations. This provides a foundation for reinvestment and potential free cash flow generation over time, improving the company's ability to sustain growth without constant external funding.

Negative Factors

Weak and volatile cash flow conversion

Large divergence between reported earnings and cash generation weakens earnings quality. Persistent cash conversion volatility can constrain capital allocation, raise financing needs during investment cycles, and increase execution risk for growth initiatives.

Margin compression and earnings volatility

Declining margins and past swings in profitability reduce predictability of future earnings and limit internal cash available for reinvestment. Structural margin pressure makes long-term planning harder and raises the bar for sustaining returns as the business scales.

Moderate returns on equity

Mid-single-digit ROE indicates the company is not yet converting its growing equity base into high returns. Over time this can limit shareholder value creation unless management improves capital efficiency or shifts to higher-return initiatives.

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

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Ridge-i Inc. Financial Statement Overview

Summary

Strong recent revenue growth and positive profitability are supported by a very conservative, near zero-debt balance sheet. The main offset is weak and volatile cash flow conversion (FY2025 free cash flow far below net income) and some margin compression versus FY2024, which reduces earnings quality and consistency.

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	1.33B	735.61M	513.70M	602.24M	184.04M
EBITDA	367.85M	171.49M	83.97M	88.45M	-123.40M
Net Income	139.63M	121.70M	44.56M	150.06M	-148.76M
Balance Sheet
Total Assets	2.86B	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	5.68M
Total Liabilities	398.47M	225.66M	73.18M	147.63M	128.91M
Stockholders Equity	2.20B	2.14B	1.99B	1.41B	1.26B
Cash Flow
Free Cash Flow	7.63M	342.58M	-148.68M	173.61M	-80.80M
Operating Cash Flow	51.32M	348.62M	-145.76M	178.19M	-76.46M
Investing Cash Flow	-53.14M	-723.02M	-38.26M	-4.58M	-4.96M
Financing Cash Flow	-286.32M	24.42M	521.65M	-2.84M	777.16M

Ridge-i Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1986.00
• 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:5572, the sentiment is Negative. The current price of 1986 is below the 20-day moving average (MA) of 2150.70, below the 50-day MA of 2151.64, and below the 200-day MA of 2488.26, indicating a bearish trend. The MACD of -2.91 indicates Positive momentum. The RSI at 45.31 is Neutral, neither overbought nor oversold. The STOCH value of 33.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:5572.

Ridge-i Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5586	65 Neutral	¥12.69B	37.90	―	―	25.41%	9.69%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5572	59 Neutral	¥8.90B	33.78	―	―	60.41%	-27.67%
4375	57 Neutral	¥42.97B	29.34	―	―	29.56%	86.66%
4382	52 Neutral	¥12.50B	-90.49	―	―	16.29%	93.98%
4425	44 Neutral	¥22.60B	35.20	―	―	36.08%	-7.71%