GDEP ADVANCE,Inc. (5885) AI Stock Analysis

• Market Cap: ¥16.19B
• Dividend Yield: 0.86%
• Average Volume (3M): 75.15K
• Price to Earnings (P/E): 25.1
• Beta (1Y): 1.35
• Revenue Growth: 27.84%
• EPS Growth: 15.69%
• Country: JP
• Employees: 21
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): N/A
• Shares Outstanding: 5,452,800
• 10 Day Avg. Volume: 123,550
• 30 Day Avg. Volume: 75,146
• PEG Ratio: 1.13
• Price to Book (P/B): 4.65
• Price to Sales (P/S): 2.00
• P/FCF Ratio: 28.12
• 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: 78 Outperform
• Price Target: ¥3,086.00 ▲(3.18% Upside)
• Action: Reiterated Date: 01/16/26
• Date: Action: Reiterated 01/16/26

The score is driven primarily by strong financial quality (rapid growth and a very conservative, near-zero-debt balance sheet). Technicals add support via a positive trend and constructive momentum, while the overall score is held back by weaker 2025 cash conversion and a relatively high P/E with a low dividend yield.

Positive Factors

Very conservative balance sheet, near-zero debt

Near-zero debt and material equity growth materially reduce financial risk and preserve strategic optionality. This durable asset-light balance sheet supports investment, M&A or cyclical cushioning without refinancing stress, improving resilience and long-term capital allocation flexibility.

Accelerating revenue growth with healthy 2025 margins

Sustained acceleration in top-line growth combined with solid operating and net margins suggests expanding market traction and the ability to monetize demand. Over months, this reinforces the business model's scalability and supports reinvestment into product and distribution to sustain durable growth.

Strong multi-year free cash flow conversion

High FCF relative to net income across multiple years indicates earnings convert into real cash, enabling internal funding for capex, R&D or shareholder returns. This persistent cash generation capacity strengthens long-term financial independence and lowers reliance on external financing.

Negative Factors

2025 margin compression versus prior years

Stepped-down margins in 2025 signal rising input costs or pricing pressure that can erode profitability even amid revenue gains. If structural, margin compression reduces reinvestment capacity and long-term return generation, making sustained high-growth profitability harder to maintain.

Operating cash flow below net income and weakened in 2025

Persistent OCF below net income and a marked 2025 decline highlights working-capital or timing pressures that impair cash conversion. Over several months this can strain liquidity for growth initiatives, force external financing, or constrain the firm’s ability to fund operations from internally generated cash.

Return on equity has eased from 2022–2023 peak

A declining ROE from peak levels indicates the company is generating lower returns on shareholder capital than earlier, which may reflect margin pressure, increased capital base, or rising competitive intensity. Persistently lower ROE reduces long-term shareholder wealth creation potential.

GDEP ADVANCE,Inc. Business Overview & Revenue Model

Company Description

GDEP ADVANCE, Inc. (5885) is a Japanese technology company specializing in providing advanced computing solutions. The company operates in sectors such as high-performance computing (HPC), artificial intelligence (AI), and data analytics, offering hardware, software, and integrated systems to meet the computational needs of various industries. GDEP ADVANCE, Inc. aims to support innovation and efficiency in research, development, and operational processes through its cutting-edge technologies.

How the Company Makes Money

GDEP ADVANCE, Inc. generates revenue by selling high-performance computing equipment and software solutions to businesses and research institutions. The company's key revenue streams include direct sales of hardware systems, such as servers and GPUs, and licensing fees for its proprietary software products. Additionally, GDEP ADVANCE, Inc. may engage in strategic partnerships with technology vendors and service providers to enhance its product offerings and expand its market reach, further contributing to its earnings. The company also provides consulting and support services, which serve as additional sources of income.

GDEP ADVANCE,Inc. Financial Statement Overview

Summary

Strong and accelerating revenue growth with solid profitability, supported by an exceptionally low-debt balance sheet. Offsetting factors are 2025 margin compression and weaker cash conversion, with operating/free cash flow declining versus 2024 despite higher revenue and earnings.

Income Statement

Revenue growth has been strong and accelerating over the last several years (2025: +43.7% vs. 2024: +17.0% vs. 2023: +8.2%), showing clear momentum. Profitability is solid with healthy operating and net margins in 2025 (about 12.7% operating margin and 8.1% net margin). The main weakness is margin compression versus 2023–2024 (gross, operating, and net margins all stepped down in 2025), suggesting higher costs and/or pricing pressure despite the faster top-line growth.

Balance Sheet

The balance sheet is very conservative, with essentially no debt in recent years (debt-to-equity at or near 0), which meaningfully reduces financial risk. Equity has grown materially from 2021 to 2025, supporting a stronger capital base, and returns on equity remain robust (~18–25% across the period). A watch item is that return on equity has eased from the 2022–2023 peak, indicating profitability is not scaling as efficiently as before.

Cash Flow

Cash generation is generally healthy: free cash flow tracks net income reasonably well (free cash flow was ~79% of net income in 2025 and ~90–99% in 2022–2024), supporting earnings quality. However, operating cash flow has been consistently below net income (roughly 0.58–0.90x across the period, and ~0.58x in 2025), and both operating cash flow and free cash flow declined in 2025 versus 2024 despite higher revenue and earnings—pointing to working-capital or cash-timing headwinds.

Breakdown	May 2024	May 2023	May 2023	May 2022	May 2021
Income Statement
Total Revenue	6.63B	4.42B	3.78B	3.49B	3.44B
Gross Profit	1.34B	1.03B	901.73M	740.07M	588.47M
EBITDA	894.96M	689.46M	585.20M	435.77M	393.15M
Net Income	536.80M	432.30M	378.29M	283.18M	233.06M
Balance Sheet
Total Assets	4.61B	4.33B	2.73B	2.15B	1.76B
Cash, Cash Equivalents and Short-Term Investments	3.33B	3.01B	1.88B	1.35B	929.77M
Total Debt	0.00	0.00	0.00	3.56M	3.56M
Total Liabilities	1.76B	1.94B	1.21B	945.77M	794.79M
Stockholders Equity	2.85B	2.39B	1.52B	1.20B	964.48M
Cash Flow
Free Cash Flow	471.62M	682.43M	575.50M	457.77M	236.52M
Operating Cash Flow	596.34M	757.57M	581.66M	465.58M	280.03M
Investing Cash Flow	-126.87M	-94.49M	-6.97M	-7.73M	-45.10M
Financing Cash Flow	-78.67M	435.58M	-56.63M	-46.61M	0.00

GDEP ADVANCE,Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2991.00
• 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:5885, the sentiment is Positive. The current price of 2991 is above the 20-day moving average (MA) of 2898.40, above the 50-day MA of 2889.44, and above the 200-day MA of 2888.93, indicating a bullish trend. The MACD of 14.15 indicates Negative momentum. The RSI at 52.53 is Neutral, neither overbought nor oversold. The STOCH value of 38.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5885.

GDEP ADVANCE,Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5885	78 Outperform	¥16.19B	25.08	―	0.86%	27.84%	15.69%
6862	71 Outperform	¥20.69B	12.76	―	1.03%	17.06%	30.17%
6597	67 Neutral	¥8.77B	16.09	―	1.65%	3.70%	107.81%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5871	58 Neutral	¥7.33B	-216.71	―	3.12%	13.88%	-155.89%
6918	56 Neutral	¥17.84B	29.28	―	2.91%	-17.73%	-83.81%
6836	55 Neutral	¥4.30B	128.02	―	―	17.29%	―

GDEP ADVANCE,Inc. Corporate Events

GDEP ADVANCE Lifts Profit and EPS Despite Lower Sales, Confirms Full-Year Growth Outlook

GDEP ADVANCE reported non-consolidated results for the six months ended November 30, 2025, showing net sales of ¥3.08 billion, down 22.8% year on year, but with operating profit up 23.1% to ¥613 million and profit up 30.3% to ¥448 million, reflecting improved profitability despite lower revenue. Earnings per share rose to ¥82.63, equity increased to ¥3.18 billion with a solid equity ratio of 59.1%, and the company maintained its dividend plan of no interim payout but a higher full-year forecast dividend of ¥29 per share; management also reaffirmed its full-year outlook, projecting FY2025/26 net sales growth of 10.2% and a 15.0% increase in profit, underscoring confidence in sustaining margin gains and shareholder returns.

The most recent analyst rating on (JP:5885) stock is a Buy with a Yen3390.00 price target. To see the full list of analyst forecasts on GDEP ADVANCE,Inc. stock, see the JP:5885 Stock Forecast page.