Convano Inc. (6574) AI Stock Analysis

• Market Cap: ¥64.15B
• Dividend Yield: N/A
• Average Volume (3M): 5.06M
• Price to Earnings (P/E): 20.0
• Beta (1Y): -0.17
• Revenue Growth: 101.48%
• EPS Growth: N/A
• Country: JP
• Employees: 424
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Personal Products & Services
• EPS (TTM): 3.55
• Shares Outstanding: 509,156,000
• 10 Day Avg. Volume: 3,330,560
• 30 Day Avg. Volume: 5,056,660
• PEG Ratio: -0.08
• Price to Book (P/B): 0.47
• Price to Sales (P/S): 0.25
• P/FCF Ratio: 5.21
• 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: 73 Outperform
• Price Target: ¥152.00 ▲(47.57% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by strong TTM financial performance (rapid growth, high margins, improved balance sheet, and solid FCF), partially offset by concerns about sustainability given prior-year volatility and weaker operating cash conversion. Technicals are supportive with a positive trend and moderate momentum, while valuation (P/E ~23.65 with no dividend) is neither compellingly cheap nor severely stretched.

Positive Factors

Recurring revenue model

A subscription-heavy, multi-channel revenue mix supports predictable recurring cash flows and higher lifetime value. Coupling subscriptions with licensing and professional services enables cross-sell, higher retention and smoother revenue visibility over the next several quarters, aiding planning and reinvestment.

Low leverage and high ROE

A very low debt-to-equity ratio and elevated ROE indicate balance-sheet flexibility and efficient capital use. This reduces financing risk, lowers fixed interest burden, and gives management optionality to fund growth initiatives or cushion cyclical slowdowns without immediate refinancing pressure.

Strong recent revenue and margin expansion

Large TTM top-line growth alongside markedly improved margins signifies meaningful operating leverage and improved product-market fit. Elevated gross and operating margins point to a scalable SaaS/solutions mix that can convert sales into free cash flow to sustain R&D and sales investments over the medium term.

Negative Factors

Durability risk from historical volatility

The recent turnaround follows multiple years of losses and uneven metrics, so current results may be partly cyclical or timing-driven. Persistent volatility in prior periods raises the chance that margins or growth could regress, making sustained execution and repeatable revenue the primary ongoing risk to fundamentals.

Weak operating cash conversion

Low OCF-to-EBIT conversion suggests earnings are not fully turning into cash, limiting internally generated funding for capex, acquisitions, or shareholder returns. If working-capital needs persist with growth, the company may require external financing or cutbacks, which could pressure margins and strategic investments.

Legacy high leverage and earlier negative returns

A history of heavy leverage and negative returns indicates past operational and capital-allocation weaknesses. Although current metrics improved, legacy financial stress may reflect structural issues in customer mix, contract terms, or cost base that could re-emerge if growth slows or macro conditions tighten.

Convano Inc. Business Overview & Revenue Model

Company Description

Convano Inc. (6574) is a leading technology company specializing in innovative solutions for the digital transformation of businesses. Operating primarily in the software and IT services sector, Convano focuses on providing cloud-based platforms, data analytics tools, and cybersecurity services. Their core products include enterprise software solutions designed to enhance operational efficiency and customer engagement for clients across various industries, including finance, healthcare, and retail.

How the Company Makes Money

Convano Inc. generates revenue through a multi-faceted model that includes subscription-based services, licensing fees, and consulting contracts. The company primarily earns money from its cloud-based software offerings, where customers pay recurring fees to access and utilize the platform. Additionally, Convano generates income from one-time software licensing agreements and professional services related to implementation and integration of their solutions. Key partnerships with major tech firms and strategic alliances in various sectors also contribute to its revenue stream, as these collaborations often lead to joint marketing efforts and expanded customer reach.

Convano Inc. Financial Statement Overview

Summary

Strong turnaround in TTM results: very high revenue growth (+80.9%), sharply higher profitability (net margin ~26.2%), low leverage (debt-to-equity ~0.08), and solid earnings quality (FCF ~0.99x net income). The key risk is durability given multi-year historical volatility (losses and weaker cash flow conversion in prior years) and current OCF-to-EBIT coverage (~0.45).

Income Statement

Profitability and growth have improved sharply. TTM (Trailing-Twelve-Months) revenue growth is extremely strong (+80.9%) with very high margins (gross ~59.5%, operating ~39.1%, net ~26.2%), a major step-up from the most recent annual period (2025) where net margin was ~2.4%. The key weakness is historical volatility: earnings were negative in multiple prior years (2021–2024), so the sustainability of the current margin profile is still the main watch item.

Balance Sheet

Leverage and capital structure look strong on a TTM (Trailing-Twelve-Months) basis, with low debt relative to equity (~0.08) and high return on equity (~32%), indicating improved profitability and balance-sheet efficiency. However, the trend across annual reports shows the company previously carried much higher leverage (debt-to-equity above 1x in 2021–2023) and returns were negative in several years, suggesting the current strength reflects a major turnaround that investors should monitor for durability.

Cash Flow

Cash generation is solid in TTM (Trailing-Twelve-Months), with free cash flow nearly matching net income (~0.99), which supports earnings quality, and free cash flow growth is very strong (+124%). The main concern is conversion: operating cash flow is meaningfully below EBIT (coverage ~0.45), implying working-capital or timing effects. Cash flow performance has also been uneven historically (including negative operating/free cash flow in 2021 and weaker conversion in 2023–2025 annual periods).

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	10.09B	3.24B	2.59B	2.33B	2.14B	1.62B
Gross Profit	5.38B	1.29B	979.33M	864.00M	765.49M	202.45M
EBITDA	4.30B	412.93M	202.65M	210.27M	316.24M	-60.03M
Net Income	3.12B	77.84M	-198.70M	-34.36M	51.03M	-216.78M
Balance Sheet
Total Assets	22.82B	3.16B	3.00B	2.54B	2.42B	2.41B
Cash, Cash Equivalents and Short-Term Investments	3.45B	806.17M	923.10M	398.95M	392.63M	364.94M
Total Debt	3.75B	894.62M	816.90M	1.32B	1.13B	1.20B
Total Liabilities	7.89B	1.42B	1.36B	1.72B	1.57B	1.62B
Stockholders Equity	14.93B	1.74B	1.64B	815.66M	848.40M	789.10M
Cash Flow
Free Cash Flow	2.39B	156.00M	273.60M	90.77M	276.79M	-120.65M
Operating Cash Flow	2.42B	165.66M	336.50M	126.51M	365.52M	-80.32M
Investing Cash Flow	-11.80B	-9.51M	-81.20M	-41.09M	-93.24M	-48.62M
Financing Cash Flow	12.01B	-273.07M	268.86M	-79.09M	-244.60M	213.32M

Convano Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 103.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6574, the sentiment is Negative. The current price of 103 is below the 20-day moving average (MA) of 125.75, below the 50-day MA of 124.60, and below the 200-day MA of 131.36, indicating a bearish trend. The MACD of -0.77 indicates Positive momentum. The RSI at 46.23 is Neutral, neither overbought nor oversold. The STOCH value of 8.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:6574.

Convano Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9251	77 Outperform	¥19.44B	20.28	―	5.16%	6.58%	―
6574	73 Outperform	¥64.15B	20.00	―	―	101.48%	―
4331	69 Neutral	¥10.87B	215.52	―	5.06%	0.36%	81.58%
2418	68 Neutral	¥33.29B	6.94	21.87%	2.14%	15.35%	45.10%
7358	68 Neutral	¥14.12B	12.43	―	2.82%	7.95%	13.67%
6571	62 Neutral	¥18.02B	16.16	―	2.53%	4.71%	-0.41%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%