AR advanced technology,Inc. (5578) AI Stock Analysis

• Market Cap: ¥13.01B
• Dividend Yield: 0.55%
• Average Volume (3M): 18.25K
• Price to Earnings (P/E): 21.0
• Beta (1Y): 1.47
• Revenue Growth: 27.16%
• EPS Growth: 29.27%
• Country: JP
• Employees: 600
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 12.76
• Shares Outstanding: 10,404,840
• 10 Day Avg. Volume: 29,440
• 30 Day Avg. Volume: 18,246
• PEG Ratio: 0.32
• Price to Book (P/B): 4.30
• Price to Sales (P/S): 0.65
• P/FCF Ratio: 9.92
• 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: 68 Neutral
• Price Target: ¥1,437.00 ▲(25.50% Upside)

The overall stock score of 68 reflects strong financial performance with robust revenue growth and operational efficiency. However, the technical analysis indicates a neutral trend, and the valuation suggests moderate pricing with limited dividend yield. The absence of earnings call and corporate events data means these factors did not influence the score.

Positive Factors

Strong Revenue Growth

Sustained high revenue growth supports a durable scale advantage. Coupled with subscription licensing and partnerships across healthcare, education and entertainment, this drives recurring income and customer stickiness, improving predictability and funding long-term expansion.

Improving Operating Margins

Healthy gross margin and rising EBIT/EBITDA margins indicate better cost control and operating leverage in its AR software/hardware mix. This suggests scalable unit economics and a path to more durable cash generation as revenue scales and fixed costs are absorbed.

High ROE and Balanced Capital Structure

ROE near 21% signals effective use of shareholder capital, while a stable equity ratio and described manageable leverage support capacity to fund R&D and partnerships. This combination underpins sustained reinvestment and competitive positioning in AR markets.

Negative Factors

Rising Leverage

An increasing leverage trend and D/E ~0.72 raise interest expense and reduce financial flexibility. Over a multi-quarter horizon this can constrain funding for product development or strategic partnerships and heighten vulnerability if revenue growth decelerates.

Volatile Free Cash Flow Growth

Although FCF relative to net income is strong, volatile FCF growth and a marked prior-year decline indicate inconsistent cash conversion. This unpredictability can impair the firm's ability to reliably fund R&D, capex or partnerships without external financing.

Low Net Profit Margin

A thin net margin despite decent gross margin suggests high operating costs or investment intensity. Persistently low net profitability limits retained earnings for reinvestment and makes long-term returns sensitive to cost overruns or revenue pressures.

AR advanced technology,Inc. Business Overview & Revenue Model

Company Description

AR Advanced Technology, Inc. (5578) specializes in the development and integration of augmented reality (AR) solutions across various sectors including healthcare, education, and entertainment. The company focuses on delivering innovative AR software and hardware products that enhance user experience and engagement. Its core offerings include AR applications for medical training, immersive educational tools, and interactive entertainment platforms, positioning it as a leader in the AR technology landscape.

How the Company Makes Money

AR Advanced Technology, Inc. generates revenue through multiple streams, primarily from the sale of its AR software and hardware products. The company licenses its AR applications to educational institutions and healthcare providers, creating a subscription-based revenue model that ensures recurring income. Additionally, AR Advanced Technology collaborates with major tech companies and educational organizations to develop tailored AR solutions, which often involve shared revenue agreements. The growth of partnerships with content creators and businesses seeking to integrate AR into their offerings further contributes to the company's earnings, as they provide a platform for monetizing custom AR experiences.

AR advanced technology,Inc. Financial Statement Overview

Summary

AR advanced technology, Inc. shows strong revenue growth and operational efficiency with improving margins and a solid return on equity. However, the increase in leverage and volatility in free cash flow growth highlight areas needing attention.

Income Statement

AR advanced technology, Inc. has demonstrated strong revenue growth with an 8.1% increase in the latest year, indicating a positive trajectory. The company maintains a healthy gross profit margin of 26.65%, reflecting efficient cost management. However, the net profit margin is relatively low at 3.15%, suggesting room for improvement in profitability. The EBIT and EBITDA margins have shown improvement, indicating operational efficiency gains.

Balance Sheet

The company's debt-to-equity ratio stands at 0.72, which is manageable but indicates an increase in leverage compared to previous years. Return on equity is strong at 20.97%, showcasing effective use of shareholder funds. The equity ratio is stable, reflecting a balanced capital structure. Overall, the balance sheet is solid, but increasing debt levels warrant monitoring.

Cash Flow

Operating cash flow has improved significantly, supporting the company's ability to cover its net income. Free cash flow to net income ratio is robust at 80.59%, indicating strong cash generation relative to earnings. However, the free cash flow growth rate has been volatile, with a significant decline in the previous year, suggesting potential cash flow management challenges.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	13.09B	14.15B	11.13B	10.16B	8.77B	7.60B
Gross Profit	3.43B	3.77B	2.84B	2.47B	1.99B	1.70B
EBITDA	759.91M	939.14M	531.52M	599.38M	506.80M	532.88M
Net Income	346.14M	445.41M	275.67M	319.12M	272.83M	344.73M
Balance Sheet
Total Assets	6.43B	6.76B	4.75B	4.47B	2.81B	2.71B
Cash, Cash Equivalents and Short-Term Investments	2.66B	2.91B	2.33B	2.39B	886.89M	911.19M
Total Debt	1.77B	1.53B	880.00M	880.00M	300.00M	465.83M
Total Liabilities	4.49B	4.59B	2.78B	2.72B	1.71B	1.87B
Stockholders Equity	1.92B	2.12B	1.97B	1.75B	1.11B	836.82M
Cash Flow
Free Cash Flow	0.00	920.25M	185.53M	671.42M	126.60M	425.89M
Operating Cash Flow	0.00	1.14B	363.35M	740.26M	151.38M	505.63M
Investing Cash Flow	0.00	-147.12M	-361.77M	-118.63M	-4.80M	-82.89M
Financing Cash Flow	0.00	-422.38M	-56.91M	886.57M	-171.50M	-255.95M

AR advanced technology,Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1145.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5578, the sentiment is Positive. The current price of 1145 is below the 20-day moving average (MA) of 1258.15, below the 50-day MA of 1179.41, and above the 200-day MA of 906.19, indicating a bullish trend. The MACD of 40.18 indicates Negative momentum. The RSI at 60.48 is Neutral, neither overbought nor oversold. The STOCH value of 57.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5578.

AR advanced technology,Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4012	79 Outperform	¥6.44B	10.76	―	1.66%	8.16%	5.69%
5599	79 Outperform	¥11.90B	32.94	―	―	18.39%	37.21%
3799	78 Outperform	¥10.33B	9.87	―	4.16%	4.52%	51.81%
5578	68 Neutral	¥13.01B	20.99	―	0.55%	27.16%	29.27%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1447	60 Neutral	¥7.67B	35.06	―	―	2.32%	126.46%