Convano Inc. (6574) AI Stock Analysis

• Market Cap: ¥69.24B
• Dividend Yield: N/A
• Average Volume (3M): 5.06M
• Price to Earnings (P/E): 44.6
• Beta (1Y): -0.21
• Revenue Growth: 101.48%
• EPS Growth: N/A
• Country: JP
• Employees: 424
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Personal Products & Services
• EPS (TTM): 2.56
• 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: 74 Outperform
• Price Target: ¥152.00 ▲(47.57% Upside)

The score is driven primarily by strong financial performance (rapid growth, higher margins, solid cash flow, and low leverage). Technicals are moderately supportive with positive momentum but mixed longer-term trend signals. Valuation is the main offset due to a high P/E and no dividend yield provided.

Positive Factors

Recurring Revenue Model

A subscription-heavy business model provides durable, repeatable revenue and higher customer lifetime value. Recurring fees improve cash predictability, enable multi-year customer relationships and cross-sell, and support sustainable growth as cloud adoption continues across target industries.

Strong Revenue and Margin Expansion

Sustained double-digit revenue growth paired with materially improved gross and net margins signals scalable core software economics and pricing power. If maintained, this combination supports reinvestment in product, market share gains, and long-term profitability resilience.

Robust Cash Generation and Low Leverage

High free cash flow growth together with very low leverage and elevated ROE gives the company financial flexibility for R&D, strategic M&A, or buffer in downturns. Strong cash conversion supports durable investment capacity without stressing the balance sheet.

Negative Factors

Historical Margin & Cash Flow Volatility

Past swings in margins and cash flow suggest earnings and cash generation are sensitive to project timing, pricing or mix shifts. This raises execution risk for maintaining current profitability and complicates medium-term planning and capital allocation decisions.

Prior Higher Leverage Episodes

Although current debt is low, historical episodes of higher leverage indicate the balance sheet has been riskier before. If leverage returns during aggressive expansion or M&A, it could reduce flexibility and increase vulnerability to economic stress, affecting long-term resilience.

Revenue Mix Includes One-time Sales

Significant reliance on one-time licensing and professional services dilutes recurring revenue mix and predictability. These components can be lower margin and resource-intensive, limiting scalability of margins and making long-term revenue visibility more dependent on new deal flow.

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

Convano Inc. exhibits solid financial performance with improvements in revenue growth and operational efficiency. The income statement shows a positive trajectory with a 25.1% revenue increase and improved gross profit margin. The balance sheet is stable with a moderate debt-to-equity ratio, though leverage should be monitored. Cash flow management is strong, ensuring liquidity and operational flexibility.

Income Statement

Convano Inc. has shown a positive trajectory in revenue growth, with a significant increase of 25.1% from 2024 to 2025. The gross profit margin improved to 39.8% in 2025, reflecting better cost management. However, the net profit margin is modest at 2.4%, indicating room for improvement in profitability. The EBIT margin turned positive, reaching 4.4% in 2025, a significant recovery from negative figures in previous years, suggesting operational improvements.

Balance Sheet

The company's debt-to-equity ratio stands at 0.40, indicating a moderate level of leverage. The return on equity improved to 4.5% in 2025, showing better utilization of equity to generate profits. The equity ratio is 55.1%, reflecting a stable financial structure with a strong equity base. However, the overall leverage and liabilities remain areas to monitor closely.

Cash Flow

Convano Inc. has demonstrated strong cash flow management, with a free cash flow of 156 million in 2025. The operating cash flow to net income ratio is 2.13, indicating robust cash generation relative to net income. The free cash flow to net income ratio is 2.00, reflecting efficient conversion of earnings into cash. Despite a decrease in free cash flow from the previous year, the company maintains a healthy cash flow position.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.58B	3.24B	2.59B	2.33B	2.14B	1.62B
Gross Profit	3.32B	1.29B	979.33M	864.00M	765.49M	202.45M
EBITDA	2.47B	412.93M	202.65M	210.27M	316.24M	-60.03M
Net Income	1.46B	77.84M	-198.70M	-34.36M	51.03M	-216.78M
Balance Sheet
Total Assets	15.94B	3.16B	3.00B	2.54B	2.42B	2.41B
Cash, Cash Equivalents and Short-Term Investments	2.24B	806.17M	923.10M	398.95M	392.63M	364.94M
Total Debt	1.08B	894.62M	816.90M	1.32B	1.13B	1.20B
Total Liabilities	2.68B	1.42B	1.36B	1.72B	1.57B	1.62B
Stockholders Equity	13.26B	1.74B	1.64B	815.66M	848.40M	789.10M
Cash Flow
Free Cash Flow	1.06B	156.00M	273.60M	90.77M	276.79M	-120.65M
Operating Cash Flow	1.08B	165.66M	336.50M	126.51M	365.52M	-80.32M
Investing Cash Flow	-9.54B	-9.51M	-81.20M	-41.09M	-93.24M	-48.62M
Financing Cash Flow	9.93B	-273.07M	268.86M	-79.09M	-244.60M	213.32M

Convano Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 103.00
• 50DMA: Positive
• 100DMA: Negative
• 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:6574, the sentiment is Positive. The current price of 103 is below the 20-day moving average (MA) of 116.70, below the 50-day MA of 115.80, and below the 200-day MA of 113.84, indicating a bullish trend. The MACD of 4.82 indicates Negative momentum. The RSI at 60.33 is Neutral, neither overbought nor oversold. The STOCH value of 63.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	¥18.80B	19.61	―	5.16%	6.58%	―
7358	74 Outperform	¥14.02B	13.07	―	2.82%	7.95%	13.67%
6574	74 Outperform	¥69.24B	44.65	―	―	101.48%	―
4331	69 Neutral	¥11.65B	4.49	―	5.06%	0.36%	81.58%
2418	64 Neutral	¥28.62B	4.19	21.87%	2.14%	15.35%	45.10%
6571	64 Neutral	¥18.62B	17.49	―	2.53%	4.71%	-0.41%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%