Blue innovation Co.,Ltd. (5597) AI Stock Analysis

• Market Cap: ¥6.69B
• Dividend Yield: N/A
• Average Volume (3M): 104.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.10
• Revenue Growth: -0.02%
• EPS Growth: -12.19%
• Country: JP
• Employees: 69
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): -42.99
• Shares Outstanding: 4,022,051
• 10 Day Avg. Volume: 89,290
• 30 Day Avg. Volume: 104,660
• PEG Ratio: -0.17
• Price to Book (P/B): 3.40
• Price to Sales (P/S): 1.76
• P/FCF Ratio: -4.05
• 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): -13,266.58
• Revenue Forecast (FY): ¥234.67B

• Rating: 52 Neutral
• Price Target: ¥1,680.00 ▼(-15.41% Downside)

The score is held down primarily by weak financial performance (ongoing losses and deteriorating operating/free cash flow). Technicals are a key offset, showing strong recent price momentum. Valuation is also a drag due to a negative P/E and no dividend yield data.

Positive Factors

Diversified product & sector exposure

Broad product set across AI, IoT and automation and exposure to healthcare, automotive and smart cities reduces reliance on a single end-market. This diversification supports durable demand, cross-selling and resilience to sector-specific cycles, aiding long-term revenue stability.

Recurring and multi-stream revenue model

A mix of subscriptions, licensing, maintenance and consulting provides recurring revenue potential and higher-margin services over time. Durable revenue streams improve predictability, customer stickiness and long-run ARPU expansion, helping the company scale fixed R&D and service costs.

Conservative leverage and equity stability

Low leverage and an improving equity ratio give the company financial flexibility to fund R&D and absorb cash burn without immediate solvency risk. Conservative capital structure preserves optionality for strategic investments or partnerships during recovery phases.

Negative Factors

Worsening operating and free cash flow

Sustained negative operating and free cash flow erodes liquidity and forces reliance on external financing or equity issuance. Over months this constrains investment in product development and sales, increasing execution risk and limiting the firm’s ability to capture market opportunities.

Top-line contraction

A shrinking revenue base undermines scale economics critical for software and hardware businesses to improve margins. Continued top-line decline pressures gross margins, weakens bargaining power with customers and suppliers, and reduces funds available to invest in growth and product refinement.

Persistent unprofitability and weak margins

Negative profitability and weak operating margins indicate structural cost or pricing issues. Over time, persistent losses deplete reserves, hamper reinvestment, and may force strategic pivots or cost cutting; without margin recovery, long-term viability and ability to self-fund growth are at risk.

Blue innovation Co.,Ltd. Business Overview & Revenue Model

Company Description

Blue Innovation Co., Ltd. (5597) is a dynamic technology firm specializing in the development and provision of advanced solutions in the fields of artificial intelligence, IoT (Internet of Things), and smart manufacturing. The company operates in various sectors including healthcare, automotive, and smart cities, offering a range of products such as AI-driven analytics platforms, IoT devices, and automation software. With a commitment to innovation and sustainability, Blue Innovation aims to enhance operational efficiency and drive digital transformation for its clients.

How the Company Makes Money

Blue Innovation Co., Ltd. generates revenue primarily through the sale of its technology products and services, including software licenses, hardware sales, and subscription-based models for its cloud services. Key revenue streams include direct sales to businesses in targeted industries, consulting and implementation services for custom solutions, and ongoing maintenance and support contracts. The company also benefits from strategic partnerships with other tech firms and industry leaders, which help to expand its market reach and enhance its product offerings. Additionally, Blue Innovation may engage in joint ventures or collaborations that provide further opportunities for monetization.

Blue innovation Co.,Ltd. Financial Statement Overview

Summary

Weak fundamentals: revenues declined year over year, profitability remains negative (losses with poor EBIT/EBITDA margins), and operating/free cash flow are negative and worsening. Low leverage helps, but overall financial health is strained by persistent losses and cash burn.

Income Statement

The company has faced declining revenues over the past year, with a revenue decrease of 3.27% from 2023 to 2024. The net profit margin remains negative due to consistent losses, and both EBIT and EBITDA margins indicate operational inefficiencies. Despite a past upward growth trend in revenue, current profitability indicators suggest significant challenges.

Balance Sheet

The company maintains a relatively low debt-to-equity ratio, indicating conservative leverage. However, the return on equity is negative, reflecting ongoing losses. The equity ratio has improved slightly, suggesting a stable equity base, but overall assets have decreased, indicating potential financial strain.

Cash Flow

Cash flow from operations is negative and worsening, signaling potential liquidity issues. Free cash flow has deteriorated significantly, with no positive growth in sight, posing risks to sustaining operations. The operating cash flow to net income ratio is negative, highlighting challenges in converting revenue into cash.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.22B	1.26B	908.40M	725.68M
Gross Profit	510.63M	566.45M	390.82M	238.48M
EBITDA	-340.11M	-249.37M	-297.74M	-355.88M
Net Income	-394.72M	-299.27M	-345.12M	-395.00M
Balance Sheet
Total Assets	1.34B	1.79B	937.12M	1.04B
Cash, Cash Equivalents and Short-Term Investments	668.50M	1.22B	527.30M	675.10M
Total Debt	474.08M	491.66M	400.00M	400.00M
Total Liabilities	709.47M	757.01M	571.15M	559.32M
Stockholders Equity	633.35M	1.03B	365.97M	480.57M
Cash Flow
Free Cash Flow	-531.70M	-350.88M	-377.79M	-334.58M
Operating Cash Flow	-494.23M	-320.20M	-365.24M	-282.44M
Investing Cash Flow	-37.47M	-30.67M	-12.55M	-52.15M
Financing Cash Flow	-21.86M	1.05B	230.00M	400.00M

Blue innovation Co.,Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1986.00
• 50DMA: Positive
• 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:5597, the sentiment is Positive. The current price of 1986 is above the 20-day moving average (MA) of 1632.45, above the 50-day MA of 1445.84, and above the 200-day MA of 1743.55, indicating a neutral trend. The MACD of 66.61 indicates Positive momentum. The RSI at 54.29 is Neutral, neither overbought nor oversold. The STOCH value of 22.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5597.

Blue innovation Co.,Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4335	81 Outperform	¥2.91B	9.62	―	3.28%	9.68%	25.15%
4421	79 Outperform	¥2.94B	10.89	―	2.86%	5.74%	5.97%
5868	73 Outperform	¥4.08B	9.96	―	0.94%	14.35%	105.59%
4261	70 Outperform	¥6.05B	22.33	―	―	27.60%	-15.54%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5597	52 Neutral	¥6.69B	-14.58	―	―	-0.02%	-12.19%
5255	39 Underperform	¥10.99B	-3.20	―	―	-29.41%	79.74%