SOLIZE Corporation (5871) AI Stock Analysis

• Market Cap: ¥7.32B
• Dividend Yield: 3.12%
• Average Volume (3M): 4.27K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.85
• Revenue Growth: 13.88%
• EPS Growth: -155.89%
• Country: JP
• Employees: 2,167
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 60.22
• Shares Outstanding: 6,000,000
• 10 Day Avg. Volume: 5,150
• 30 Day Avg. Volume: 4,266
• PEG Ratio: 1.87
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.30
• P/FCF Ratio: -15.61
• 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): 106.5
• Revenue Forecast (FY): ¥30.24B

• Rating: 58 Neutral
• Price Target: ¥1,576.00 ▲(10.99% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is held back primarily by the sharp drop in profitability and the shift to negative operating and free cash flow in 2025, despite strong revenue growth and a very low-debt balance sheet. Technicals are moderately supportive with positive momentum, while valuation is mixed due to a negative P/E offset by a solid dividend yield.

Positive Factors

Consistent Revenue Growth

Sustained top-line growth over multiple years shows durable demand for SOLIZE's engineering and IT services in manufacturing and automotive verticals. This revenue expansion supports scale economies, cross-sell of services, and provides a runway to restore margins if cost discipline returns.

Very Low Leverage

Near-zero debt gives SOLIZE long-term financial flexibility to invest in tooling, R&D, or targeted M&A without solvency pressure. A conservative capital structure reduces bankruptcy risk and preserves capacity to fund strategic initiatives during cyclical downturns.

Stable Gross Margins

Consistent gross margins imply underlying pricing power or efficient delivery of core services. That stability provides a structural buffer: if operating costs are controlled, operating profitability can recover, supporting sustainable cash generation and competitive pricing.

Negative Factors

Earnings & Margin Compression

A sharp decline in operating margins and the swing to a net loss indicate structural pressure on profitability—possibly from higher operating costs, pricing pressure, or project mix shifts. Persistently low margins would impair reinvestment, dividend sustainability, and ROE over time.

Weak Cash Generation

Negative operating cash flow and recurring free cash flow deficits signal risky working-capital dynamics or deteriorating project cash conversion. Over months this erodes liquidity, forces reliance on reserves or financing, and constrains capital expenditures and strategic spending.

Declining Returns on Capital

Falling ROE reflects weaker profitability relative to equity and indicates capital is generating less value. Over the medium term, declining returns pressure shareholder returns and could necessitate operational restructuring, asset reallocation, or changes in strategy to restore capital efficiency.

SOLIZE Corporation Business Overview & Revenue Model

Company Description

SOLIZE Corporation provides 3D CAD, CAE, MBD, 3D printing, and innovation engineering services in Japan, North America, China, India, and Europe. It serves automobiles and automobile parts, appliances and electronic devices, medical equipment, energy and infrastructure, heavy industry, construction civil engineering, process industry, aerospace, software, finance and insurance, and BPO sectors. The company was founded in 1990 and is based in Chiyoda, Japan.

How the Company Makes Money

SOLIZE Corporation generates revenue through multiple streams, primarily by offering engineering consulting services, IT solutions, and software tools tailored to the needs of the manufacturing and automotive industries. Key revenue sources include project-based contracts where clients pay for specific engineering services, licensing fees for proprietary software, and long-term maintenance agreements. The company also benefits from strategic partnerships with technology firms and industry leaders, which enhance its service offerings and expand its market reach, contributing significantly to its overall earnings.

SOLIZE Corporation Financial Statement Overview

Summary

Revenue has grown steadily (about ¥15.9B in 2021 to ¥25.8B in 2025) and the balance sheet is very conservative with near-zero debt, but profitability deteriorated sharply (EBIT margin ~4% in 2022–2023 to ~0.3% in 2025) with net income turning slightly negative in 2025. Cash generation also weakened, with operating cash flow turning negative and free cash flow materially negative in 2025.

Income Statement

Revenue has grown steadily from 2021 to 2025 (about ¥15.9B to ¥25.8B), but profitability has weakened materially. Gross margin has been fairly stable (~25%–28%), yet operating profitability fell sharply: EBIT margin declined from ~4.0% in 2022–2023 to ~0.3% in 2025, and net income turned slightly negative in 2025 after healthy profits in 2022–2024. Overall, growth is a positive, but the recent margin compression and earnings reversal are key concerns.

Balance Sheet

The balance sheet is very conservatively positioned with minimal to zero debt (debt-to-equity near 0% across the period, and zero debt in 2025). Equity remains sizable and relatively stable versus assets, indicating strong financial flexibility and low solvency risk. The main weakness is returns to shareholders weakening alongside earnings (return on equity moved from ~5%–6% in 2022–2023 to slightly negative in 2025), suggesting the issue is profitability rather than leverage.

Cash Flow

Cash generation has become inconsistent and deteriorated recently. Operating cash flow was positive in 2022–2024 but turned negative in 2025, and free cash flow was negative in both 2021 and 2025, with 2025 showing a meaningful cash burn (about -¥0.5B). While free cash flow exceeded net income in 2025 (helped by the small net loss), the more important signal is the swing to negative operating cash flow, which raises questions about working-capital or operating efficiency in the latest year.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	24.19B	25.78B	22.71B	20.08B	17.83B	15.85B
Gross Profit	6.73B	7.27B	6.45B	5.51B	4.81B	4.01B
EBITDA	193.00M	449.00M	685.00M	1.10B	883.00M	286.00M
Net Income	-16.00M	-36.00M	254.00M	580.00M	566.00M	292.00M
Balance Sheet
Total Assets	15.09B	15.70B	15.47B	13.06B	13.68B	12.54B
Cash, Cash Equivalents and Short-Term Investments	4.89B	4.69B	7.24B	6.21B	7.29B	6.90B
Total Debt	0.00	0.00	54.00M	101.00M	118.00M	128.00M
Total Liabilities	4.12B	4.37B	3.99B	3.39B	3.36B	2.87B
Stockholders Equity	10.96B	11.33B	11.48B	9.67B	10.32B	9.67B
Cash Flow
Free Cash Flow	0.00	-489.00M	7.00M	381.00M	706.00M	-271.00M
Operating Cash Flow	0.00	-208.00M	297.00M	488.00M	863.00M	270.00M
Investing Cash Flow	0.00	-2.21B	-718.00M	-275.00M	-408.00M	-528.00M
Financing Cash Flow	0.00	-181.00M	1.38B	-1.34B	-129.00M	-34.00M

SOLIZE Corporation Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1420.00
• 50DMA: Negative
• 100DMA: Negative
• 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:5871, the sentiment is Neutral. The current price of 1420 is above the 20-day moving average (MA) of 1381.90, above the 50-day MA of 1415.32, and below the 200-day MA of 1575.86, indicating a neutral trend. The MACD of -10.74 indicates Negative momentum. The RSI at 53.31 is Neutral, neither overbought nor oversold. The STOCH value of 74.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:5871.

SOLIZE Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7739	76 Outperform	¥148.33B	22.89	―	1.92%	7.46%	-8.01%
6727	72 Outperform	¥101.53B	8.23	22.46%	4.06%	-8.93%	48.98%
6737	69 Neutral	¥87.77B	11.91	―	4.76%	1.81%	9.07%
6724	67 Neutral	¥624.61B	9.47	6.07%	3.69%	0.48%	6.92%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5871	58 Neutral	¥7.32B	-211.99	―	3.12%	13.88%	-155.89%
7709	46 Neutral	¥2.22B	-5.75	―	―	-23.14%	-829.31%