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

• Market Cap: ¥6.52B
• Dividend Yield: N/A
• Average Volume (3M): 104.66K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.90
• 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: 46 Neutral
• Price Target: ¥1,588.00 ▼(-20.04% Downside)

The score is held down primarily by weak financial performance (declining revenue, ongoing losses, and worsening negative operating/free cash flow). Technicals provide some support via improving near-term momentum, but valuation remains constrained by a negative P/E and no dividend yield data.

Positive Factors

Conservative leverage

Low debt-to-equity provides durable financial flexibility, reducing default risk while cash flows are negative. This conservative capital structure supports the firm's ability to fund R&D, weather operating losses, and pursue strategic investments or partnerships without immediate refinancing pressure.

Diverse product and revenue streams

Exposure to AI, IoT, automation and multiple end markets plus subscription and services revenue creates structural resilience. Recurring contracts and cross-selling across industries can stabilize revenues over the medium term and support scalable margins as penetration grows.

Stable equity base

An improving equity ratio signals a firmer balance sheet that reduces insolvency risk and provides a buffer for continued investment. A stable equity base supports long-term initiatives like product development and partnerships without immediate reliance on debt markets.

Negative Factors

Declining revenue trend

Sustained revenue decline erodes scale benefits, limits ability to absorb fixed R&D and SG&A costs, and undermines long-term margin recovery. Continued top-line contraction makes it harder to finance growth initiatives organically and weakens competitive positioning.

Persistent unprofitability

Ongoing losses and negative operating margins indicate structural profitability issues. Without margin improvement, the company risks long-term viability concerns, constrained reinvestment capacity, and increased reliance on external financing or dilution to sustain operations.

Worsening operating and free cash flow

Negative and deteriorating operating/free cash flow creates lasting liquidity pressure, limiting capex and go-to-market investment. Even with low leverage, persistent cash burn can force asset sales, cost cuts, or dilutive capital raises that harm long-term competitiveness.

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

The company is experiencing significant financial difficulties, with declining revenues, negative profit margins, and deteriorating cash flows. Despite a low debt-to-equity ratio, the negative return on equity and worsening liquidity highlight severe financial challenges.

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: Negative
• RSI: Neutral
• STOCH: Negative

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 1264.15, above the 50-day MA of 1478.98, and above the 200-day MA of 1694.12, indicating a neutral trend. The MACD of 6.65 indicates Negative momentum. The RSI at 62.20 is Neutral, neither overbought nor oversold. The STOCH value of 84.01 is Negative, 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	¥2.89B	9.53	―	3.28%	9.68%	25.15%
4421	72 Outperform	¥2.98B	11.04	―	2.86%	5.74%	5.97%
4261	70 Outperform	¥6.54B	24.18	―	―	27.60%	-15.54%
5868	68 Neutral	¥4.08B	9.97	―	0.94%	14.35%	105.59%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5597	46 Neutral	¥6.52B	-14.20	―	―	-0.02%	-12.19%
5255	39 Underperform	¥12.03B	-3.50	―	―	-29.41%	79.74%