GDEP ADVANCE,Inc. (5885) AI Stock Analysis

• Market Cap: ¥15.06B
• Dividend Yield: 0.86%
• Average Volume (3M): 75.15K
• Price to Earnings (P/E): 10.9
• Beta (1Y): 1.19
• Revenue Growth: 27.84%
• EPS Growth: 15.69%
• Country: JP
• Employees: 21
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 57.57
• 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: ¥3,148.00 ▲(5.25% 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

A near-zero-debt balance sheet materially reduces financial risk and provides durable optionality for the business: it supports sustaining operations through cycles, funds capex or R&D internally, and enables opportunistic M&A or buybacks without near-term refinancing risk, preserving flexibility over the next 2–6 months and beyond.

Accelerating revenue growth

Sustained and accelerating top-line growth signals expanding product adoption or market share, improving the revenue base's quality. This creates structural advantages: greater scale to absorb fixed costs, enhanced negotiating leverage with suppliers, and more runway for product investment, which supports durable earnings growth if the trend persists.

Strong returns on equity and growing equity base

Robust ROE and a rising equity base indicate historically effective capital allocation and profitable reinvestment. High mid‑teens to mid‑twenty percent ROE levels show the company converts capital into returns efficiently, supporting long‑term shareholder value creation and capacity to self-fund growth initiatives without excessive external financing.

Negative Factors

Weak cash conversion / declining OCF and FCF

Persistent operating cash below reported earnings and a drop in OCF/FCF in 2025 point to working‑capital pressure or cash‑timing issues. This weakens the company's ability to self-fund investment and increases sensitivity to liquidity shocks, reducing durable financial flexibility even with strong reported profitability.

Margin compression in 2025

Stepped‑down gross, operating, and net margins indicate rising input costs or pricing pressure that erodes the leverage benefits of revenue growth. If structural, sustained margin compression will reduce free cash generation and hinder reinvestment capacity, making future earnings growth less durable despite higher sales.

Easing return on equity from prior peak

An easing ROE signals diminishing efficiency in converting equity into profits, which may reflect rising costs, competitive pressure, or less profitable incremental sales. Continued downward ROE drift would weaken long‑term return prospects and suggest limits to scalability of the business model absent corrective actions.

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

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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	4.34B	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	0.00	0.00
Total Liabilities	1.76B	1.95B	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: Negative
• Last Price: 2991.00
• 50DMA: Negative
• 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:5885, the sentiment is Negative. The current price of 2991 is above the 20-day moving average (MA) of 2831.90, above the 50-day MA of 2901.12, and above the 200-day MA of 2942.75, indicating a bearish trend. The MACD of -28.64 indicates Positive momentum. The RSI at 46.44 is Neutral, neither overbought nor oversold. The STOCH value of 57.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥15.06B	10.94	―	0.86%	27.84%	15.69%
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%
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%

GDEP ADVANCE,Inc. Corporate Events

GDEP ADVANCE Overhauls Solutions Structure and Leadership to Speed Decision‑Making

GDEP ADVANCE, Inc. will reorganize its internal structure on April 1, 2026, abolishing the existing Solutions Headquarters and creating a new Solutions Business Unit that will house three key business lines: Business Development BL, Solutions Sales BL, and a newly formed Sales Promotion BL. The Business Promotion Office and Solutions Sales Department will be renamed and repositioned within this unit, in a move aimed at accelerating decision‑making and strengthening business execution in its solutions operations.

The overhaul is accompanied by a set of senior personnel changes, including the appointment of executive officers to lead each of the new business lines within the Solutions Business Unit. These shifts, including a new general manager for human resources planning, are expected to streamline governance, clarify leadership responsibilities, and support the company’s drive to enhance sales promotion and business development capabilities in its core solutions business.

The most recent analyst rating on (JP:5885) stock is a Buy with a Yen3050.00 price target. To see the full list of analyst forecasts on GDEP ADVANCE,Inc. stock, see the JP:5885 Stock Forecast page.

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.