Alue Co., Ltd. (7043) AI Stock Analysis

• Market Cap: ¥2.16B
• Dividend Yield: 0.66%
• Average Volume (3M): 4.16K
• Price to Earnings (P/E): 11.0
• Beta (1Y): >-0.01
• Revenue Growth: 14.27%
• EPS Growth: N/A
• Country: JP
• Employees: 195
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): 39.71
• Shares Outstanding: 2,554,400
• 10 Day Avg. Volume: 8,190
• 30 Day Avg. Volume: 4,156
• PEG Ratio: -0.03
• Price to Book (P/B): 1.87
• Price to Sales (P/S): 0.73
• P/FCF Ratio: 4.92
• 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: 64 Neutral
• Price Target: ¥973.00 ▼(-6.62% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by improved financial performance (restored profitability and strong recent free cash flow) and a supportive low P/E valuation. These positives are tempered by weak technical momentum (below key moving averages with negative MACD) and the company’s history of cyclical earnings and cash flow volatility.

Positive Factors

Improved profitability & high gross margin

Alue regained operating profitability with gross margins near 63%, showing durable service economics across training deliveries. High gross margins provide a structural buffer to fund content development and client-specific programs, supporting sustainable operating profits if revenue growth persists.

Stronger cash generation

Recent operating cash flow and free cash flow turned strongly positive and roughly matched net income, indicating earnings are converting into cash. Reliable cash conversion enhances investment capacity for program development and working-capital needs and improves ability to service debt over time.

Manageable leverage and equity growth

Debt around one-third of equity and recent equity growth signal improved balance-sheet resilience versus earlier periods. Lower relative leverage since 2020 gives the company financial flexibility to fund growth initiatives or absorb cyclical revenue shocks without immediate refinancing stress.

Negative Factors

Cyclical earnings and cash-flow volatility

Historical swings—including losses and negative cash flow in discrete years—reflect sensitivity to economic cycles and client demand for training. Persistent cyclicality raises execution and liquidity risk, making multi-period planning and consistent free cash flow generation harder without more recurring contracts.

Moderate net margin

Despite strong gross margin, net margin around 6.7% indicates significant fixed or SG&A absorption that limits operating leverage. A modest net margin constrains long-term free-cash-flow upside and leaves less buffer against revenue declines unless structural cost efficiencies are achieved.

Recent uptick in debt vs prior year

Although leverage is manageable overall, debt increased versus 2023 and lacks a consistent downward trend. Rising indebtedness amid cyclical earnings elevates refinancing and interest-rate exposure risk and could limit strategic optionality during weaker demand periods.

Alue Co., Ltd. Business Overview & Revenue Model

Company Description

Alue Co.,Ltd. provides educational services for working adults using human resource development data and machine learning technology primarily in Japan. Its services include level-specific training, global human resource development, thematic training, and e-training services. The company was incorporated in 2003 and is based in Tokyo, Japan.

How the Company Makes Money

Alue Co., Ltd. generates revenue primarily through its diverse portfolio of technology solutions. The company earns money by selling software licenses, providing cloud-based services, and offering consulting services related to digital transformation. Key revenue streams include subscription fees from cloud services, one-time fees from software sales, and ongoing maintenance and support contracts. Additionally, Alue Co., Ltd. has established significant partnerships with major tech firms, which not only expands its market reach but also enhances its product offerings, thereby contributing to its overall earnings.

Alue Co., Ltd. Financial Statement Overview

Summary

Income statement and cash flow show a meaningful rebound: return to operating profit and positive net income with strong gross margin (~63%), plus solid free cash flow conversion in the latest period. Offsetting this, results have been cyclical historically (loss/negative cash flow in 2020 and 2024), and net margin remains moderate (~6.7%). Balance sheet leverage is manageable (debt ~1/3 of equity) but debt rose versus 2023.

Income Statement

Profitability has improved materially after last year’s loss: the latest annual period shows a return to solid operating profit and positive net income, supported by a strong gross margin (~63%). Revenue growth re-accelerated (~8.6% vs. ~2.0% prior year), and operating margins rebounded meaningfully versus 2024. Offsetting this, earnings quality looks somewhat cyclical across the history (losses in 2020 and 2024), and net margin remains moderate (~6.7%) versus the company’s stronger years (2021–2022).

Balance Sheet

Leverage appears manageable with debt at roughly one-third of equity in the latest period, and equity has grown versus prior years—signs of improving balance sheet resilience. The company has also reduced leverage meaningfully from the 2020 peak (when debt exceeded equity). The main watch-out is that debt levels have not consistently trended down year-over-year (debt ticked up versus 2023), so maintaining profitability is important to keep leverage contained.

Cash Flow

Cash generation strengthened sharply in the latest period, with operating cash flow and free cash flow both solidly positive and free cash flow roughly matching net income—an encouraging sign of earnings translating into cash. However, cash flow has been volatile historically (negative operating and free cash flow in 2024 and 2020), which adds execution risk and suggests working-capital and/or demand sensitivity that could pressure liquidity in weaker years.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.35B	3.64B	3.09B	3.03B	2.77B	2.40B
Gross Profit	2.03B	2.28B	1.83B	1.86B	1.77B	1.50B
EBITDA	207.29M	426.79M	-12.42M	128.31M	276.41M	323.70M
Net Income	59.86M	242.21M	-73.71M	56.85M	166.87M	183.29M
Balance Sheet
Total Assets	2.27B	2.40B	1.90B	1.72B	1.86B	2.02B
Cash, Cash Equivalents and Short-Term Investments	1.29B	1.30B	822.00M	986.86M	1.10B	1.33B
Total Debt	682.21M	467.03M	448.00M	214.15M	397.61M	667.09M
Total Liabilities	1.01B	987.02M	716.89M	464.04M	652.61M	979.99M
Stockholders Equity	1.25B	1.42B	1.18B	1.26B	1.20B	1.04B
Cash Flow
Free Cash Flow	0.00	539.38M	-86.79M	83.62M	44.41M	309.40M
Operating Cash Flow	0.00	539.65M	-37.30M	133.10M	90.02M	365.85M
Investing Cash Flow	0.00	-69.93M	-218.84M	-52.35M	-48.21M	-60.54M
Financing Cash Flow	0.00	1.54M	76.01M	-201.21M	-286.18M	-285.63M

Alue Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1042.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7043, the sentiment is Negative. The current price of 1042 is above the 20-day moving average (MA) of 912.60, above the 50-day MA of 941.84, and above the 200-day MA of 904.21, indicating a bearish trend. The MACD of -19.48 indicates Positive momentum. The RSI at 22.87 is Positive, neither overbought nor oversold. The STOCH value of 17.38 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7043.

Alue Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7089	75 Outperform	¥8.67B	9.23	―	―	21.37%	93.71%
4377	67 Neutral	¥37.99B	30.08	―	0.39%	41.23%	50.13%
7043	64 Neutral	¥2.16B	10.95	―	0.66%	14.27%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
3900	51 Neutral	¥11.16B	426.22	―	2.24%	32.39%	-127.51%
9331	44 Neutral	¥1.35B	30.71	―	―	3.33%	-80.47%