GDEP ADVANCE,Inc. (5885) AI Stock Analysis

• Market Cap: ¥15.81B
• Dividend Yield: 0.86%
• Average Volume (3M): 75.15K
• Price to Earnings (P/E): 10.9
• Beta (1Y): 1.23
• 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: ¥3,145.00 ▲(5.15% 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

Conservative balance sheet

Near-zero debt and materially grown equity from 2021–2025 provide durable financial flexibility. Low leverage reduces insolvency risk, supports investment or opportunistic M&A without refinancing, and preserves capacity to weather cyclical downturns while maintaining returns.

Accelerating revenue growth

Sustained and accelerating top-line expansion indicates strengthening product-market fit and market share gains. Durable revenue momentum underpins scalability, supports reinvestment in R&D and sales, and increases the odds of continued profit growth if execution remains consistent.

Healthy profitability metrics

Consistent operating and net margins with robust returns on equity point to an economically viable business model. Margins and ROE provide internal cash to fund growth, signal pricing power or cost efficiency, and support sustainable shareholder returns over the medium term.

Negative Factors

Weak cash conversion

Operating cash flow lagging net income and a 2025 decline in both OCF and FCF suggest working-capital or timing pressures. Persistently weak cash conversion can constrain real investment capacity, raise reliance on external financing for growth, and reduce margin of safety despite low debt.

Margin compression

Step-down in margins amid faster revenue growth signals rising input costs or pricing pressure that erodes unit economics. If structural (supply, input inflation, competitive pricing), compressed margins can persist and limit free cash flow and return expansion despite top-line strength.

Small organizational scale

A very small headcount increases execution and key-person risk and limits operational bandwidth for rapid scaling. Organizational concentration can slow product deployment, constrain sales coverage and support, and amplify single-person or small-team turnover impacts on performance.

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: Negative
• 100DMA: Positive
• 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:5885, the sentiment is Positive. The current price of 2991 is above the 20-day moving average (MA) of 2890.85, above the 50-day MA of 2902.74, and above the 200-day MA of 2914.30, indicating a neutral trend. The MACD of -29.17 indicates Positive momentum. The RSI at 50.98 is Neutral, neither overbought nor oversold. The STOCH value of 33.52 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	¥15.81B	10.94	―	0.86%	27.84%	15.69%
7739	76 Outperform	¥148.12B	23.25	―	1.92%	7.46%	-8.01%
6727	72 Outperform	¥108.99B	8.23	17.33%	4.06%	-8.93%	48.98%
6737	69 Neutral	¥90.80B	11.91	―	4.76%	1.81%	9.07%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
5871	58 Neutral	¥6.97B	-211.99	―	3.12%	13.88%	-155.89%
7709	46 Neutral	¥2.31B	-5.75	―	―	-23.14%	-829.31%

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.