EBRAINS,INC. (6599) AI Stock Analysis

• Market Cap: ¥4.49B
• Dividend Yield: 1.57%
• Average Volume (3M): 14.69K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.40
• Revenue Growth: 4.40%
• EPS Growth: 35.86%
• Country: JP
• Employees: 116
• Sector: Technology
• Sector Strength: 88
• Industry: Computer Hardware
• EPS (TTM): 55.02
• Shares Outstanding: 1,536,000
• 10 Day Avg. Volume: 3,910
• 30 Day Avg. Volume: 14,686
• PEG Ratio: -1.98
• Price to Book (P/B): 0.73
• Price to Sales (P/S): 0.87
• P/FCF Ratio: 9.20
• 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: 72 Outperform
• Price Target: ¥3,380.00 ▲(32.24% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven primarily by strong financial performance—especially the very low-debt balance sheet and solid cash generation—partly offset by weakening profitability versus the 2023 peak and uneven revenue growth. Technical indicators are mixed-to-weak with the stock below key short- and mid-term moving averages, while valuation is reasonable with a moderate P/E and modest dividend yield.

Positive Factors

Very low debt / strong balance sheet

Near-zero debt and rising equity materially lower financing risk and preserve strategic optionality. This durable capital strength supports sustained investment in R&D or capex, higher resilience to downturns, and flexibility to fund growth without relying on costly external leverage.

Consistent free cash flow generation

Sustained free cash flow close to net income underpins operating quality and funds organic growth, dividends, or buybacks without heavy borrowing. Reliable cash conversion improves financial flexibility and supports longer-term capital allocation decisions.

Healthy margins despite recent pressure

Margins are still at healthy levels, indicating structural pricing power or cost efficiency. Even with recent softness, maintained margin levels sustain cash generation and return on capital, giving management room to defend market position and invest in higher-margin initiatives.

Negative Factors

Uneven revenue growth

Irregular top-line growth complicates long-term planning and undermines revenue predictability. Persistent unevenness can hinder scaling of fixed-cost investments, make forecasting less reliable for capital allocation, and indicates vulnerability to cyclical or competitive pressures.

Softening profitability versus 2023 peak

A decline from prior profit highs suggests margin compression from cost increases, pricing pressure, or product mix shifts. If persistent, this erodes return on equity and free cash flow, constraining reinvestment capacity and weakening the firm's competitive reinvestment advantage.

Cash generation volatility / working-capital swings

Volatile cash conversion driven by working-capital swings raises operational financing risk and forecasting uncertainty. Intermittent weak coverage periods could force short-term liquidity measures or increase dependency on external funding in stress scenarios, reducing resilience.

EBRAINS,INC. Business Overview & Revenue Model

Company Description

Ebrains, Inc. designs, develops, produces, and sells industrial electronics and industrial computers designed for information, communications, control, video, and measurement fields. It offers CompactPCI products; advancedTCA backplane products; backplanes, DIN racks, universal boards, card extenders, unit power supplies, cabinets, and related devices; industrial system chassis with CPU boards and various I/O boards; custom backplanes/custom racks and chassis designed on commission; and custom backplanes/custom racks/custom chassis on commission. The company was incorporated in 1973 and is headquartered in Hachioji, Japan.

How the Company Makes Money

EBRAINS, INC. generates revenue through a diversified business model that includes licensing fees for its proprietary software solutions, subscription services for continuous access to its AI platforms, and consulting fees for personalized implementation and integration services. The company also engages in strategic partnerships with industry leaders to co-develop and market new technology solutions, thereby expanding its market reach and enhancing its revenue streams. Additionally, EBRAINS may receive funding through research grants and collaboration agreements aimed at innovative technology advancements.

EBRAINS,INC. Financial Statement Overview

Summary

Financials are solid overall, led by an exceptionally strong balance sheet (near-zero debt, rising equity). Cash flow is consistently positive with generally good free-cash-flow quality, while the main risk is uneven revenue growth and margin/earnings softening versus the 2023 peak.

Income Statement

Revenue growth has been uneven (strong rebound in 2025 after a slight 2024 decline), while profitability has softened from the 2023 peak. Gross, operating, and net margins remain healthy for the period but have trended down over the last two years, with net income also stepping down from 2023 levels—suggesting some margin pressure despite stable scale.

Balance Sheet

The balance sheet is a clear strength: debt is essentially zero in recent years and leverage is minimal even historically, reducing financial risk. Equity has steadily increased and returns on equity remain positive (though down from the 2023 high), indicating solid capital strength with slightly moderating profitability on that capital.

Cash Flow

Free cash flow has been consistently strong relative to net income (roughly near 1x across years), supporting earnings quality. However, cash generation versus accounting profit has been volatile at times (notably weaker coverage in 2021–2023 before improving in 2024–2025), which points to working-capital or timing swings that can introduce variability.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	3.92B	4.03B	3.99B	4.26B	3.92B	3.20B
Gross Profit	851.97M	864.49M	911.14M	1.05B	927.64M	680.52M
EBITDA	479.98M	481.15M	507.07M	673.82M	557.80M	317.33M
Net Income	318.31M	313.41M	332.06M	426.20M	345.38M	200.17M
Balance Sheet
Total Assets	5.97B	5.93B	5.70B	5.62B	5.20B	4.59B
Cash, Cash Equivalents and Short-Term Investments	2.80B	2.73B	2.39B	1.92B	1.75B	1.53B
Total Debt	0.00	0.00	0.00	0.00	28.02M	66.02M
Total Liabilities	1.18B	1.14B	1.20B	1.43B	1.41B	1.14B
Stockholders Equity	4.79B	4.79B	4.50B	4.20B	3.79B	3.45B
Cash Flow
Free Cash Flow	0.00	379.61M	501.11M	236.92M	263.42M	126.22M
Operating Cash Flow	0.00	382.20M	505.42M	247.38M	267.96M	152.63M
Investing Cash Flow	0.00	-3.48M	-34.46M	-34.74M	2.90M	-18.09M
Financing Cash Flow	0.00	-57.34M	-40.81M	-61.22M	-65.16M	113.36M

EBRAINS,INC. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2556.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6599, the sentiment is Positive. The current price of 2556 is below the 20-day moving average (MA) of 3039.95, below the 50-day MA of 2944.36, and above the 200-day MA of 2547.24, indicating a neutral trend. The MACD of 7.31 indicates Positive momentum. The RSI at 50.09 is Neutral, neither overbought nor oversold. The STOCH value of 52.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6599.

EBRAINS,INC. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6734	73 Outperform	¥5.03B	14.35	―	1.89%	33.70%	36.99%
6599	72 Outperform	¥4.49B	12.39	―	1.57%	4.40%	35.86%
3021	71 Outperform	¥11.65B	8.19	―	2.47%	20.51%	42.33%
6597	67 Neutral	¥7.50B	13.29	―	1.65%	3.70%	107.81%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6836	55 Neutral	¥3.94B	-92.18	―	―	17.29%	―
6731	47 Neutral	¥4.40B	-3.53	―	―	-13.93%	―