Goodpatch, Inc. (7351) AI Stock Analysis

• Market Cap: ¥4.87B
• Dividend Yield: 1.54%
• Average Volume (3M): 31.98K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.82
• Revenue Growth: 28.98%
• EPS Growth: 3659.13%
• Country: JP
• Employees: 264
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 6.98
• Shares Outstanding: 9,246,620
• 10 Day Avg. Volume: 28,110
• 30 Day Avg. Volume: 31,976
• PEG Ratio: <0.01
• Price to Book (P/B): 1.94
• Price to Sales (P/S): 1.58
• P/FCF Ratio: 9.56
• 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: 71 Outperform
• Price Target: ¥635.00 ▼(-5.65% Downside)

Score is primarily supported by strong financial performance (rapid revenue growth, solid margins, strong free cash flow growth, and a low-leverage balance sheet). Offsetting this is weak technical positioning, with the stock trading below all major moving averages and subdued momentum indicators. Valuation is moderately supportive with a mid-teens P/E and a modest dividend yield.

Positive Factors

Strong revenue growth

Sustained 32.6% top-line growth points to durable demand for Goodpatch's UX and digital product services. Persistent revenue expansion supports reinvestment in talent, broadening service offerings and scaling account relationships, strengthening competitive position over months.

Robust cash generation

Very strong free cash flow growth and high OCF-to-net-income conversion indicate efficient cash conversion from operations. This enhances financial flexibility to fund working capital, invest in capabilities, and absorb cyclical downturns without recurring external financing.

Conservative balance sheet

Extremely low leverage and a high equity ratio provide resilience and strategic optionality. The conservative capital structure lowers financial risk, enables opportunistic M&A or hiring, and supports continued client investment without pressuring cash flow in adverse environments.

Negative Factors

Modest net profit margin

An 8.0% net margin is moderate for a software/UX services firm and limits internal ROI from revenue growth. Lower margin reduces cushion against cost pressures, constrains reinvestment capacity per revenue dollar, and may signal scope to improve pricing or cost structure.

Relatively low ROE

ROE below many high-growth tech peers indicates more moderate capital efficiency. Over time this can cap shareholder returns and suggest the need for stronger margin expansion, higher utilization, or capital allocation shifts to boost profitability per equity unit.

Revenue and cash volatility risk

Historical negative cash flow and a business model centered on project-based, variable-fee work imply lumpy revenue and cash timing swings. Such structural variability can stress working capital, complicate hiring and retention pacing, and require larger cash buffers.

Goodpatch, Inc. Business Overview & Revenue Model

Company Description

Goodpatch, Inc. (7351) is a design and technology company based in Japan, specializing in user experience (UX) and digital product development. The company operates primarily in the technology and creative sectors, offering services that include product design, user interface (UI) design, and consulting for digital transformation. Goodpatch is known for its innovative approach to design, leveraging a user-centered methodology to create impactful and functional digital solutions for a wide range of clients.

How the Company Makes Money

Goodpatch generates revenue primarily through its design services, which include project-based work for clients seeking to develop or enhance their digital products. The company charges fees for consulting, design, and development services, which can vary based on the project's complexity and duration. Additionally, Goodpatch may have recurring revenue from retainer agreements with clients who require ongoing support and updates for their digital solutions. Strategic partnerships with technology firms and collaborations on joint projects may also contribute to revenue, as these relationships can lead to new business opportunities and increased visibility in the market.

Goodpatch, Inc. Financial Statement Overview

Summary

Strong overall fundamentals supported by 32.6% revenue growth and sharp free cash flow growth (156.7%). Balance sheet leverage is very low (debt-to-equity 0.06) with a high equity ratio (79%). Offsets include a comparatively modest net margin (8.0%) and ROE (9.8%), plus prior-year negative cash flow indicating some volatility.

Income Statement

Goodpatch, Inc. has demonstrated strong revenue growth with a 32.6% increase in the latest year, indicating robust demand for its offerings. The company maintains healthy profitability with a gross profit margin of 57.9% and a net profit margin of 8.0%. EBIT and EBITDA margins have also improved, reflecting efficient operations. However, the net profit margin is relatively lower compared to the industry average, suggesting room for improvement in cost management.

Balance Sheet

The company exhibits a strong balance sheet with a low debt-to-equity ratio of 0.06, indicating prudent financial leverage. The equity ratio stands at a solid 79.0%, showcasing a strong capital structure. Return on equity has improved to 9.8%, reflecting better utilization of shareholder funds. However, the relatively low ROE compared to industry peers suggests potential for enhancing shareholder returns.

Cash Flow

Goodpatch, Inc. has shown impressive free cash flow growth of 156.7%, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 2.1 suggests efficient conversion of profits into cash. The free cash flow to net income ratio is nearly 1, highlighting effective cash management. However, the previous year's negative cash flow figures indicate potential volatility in cash generation.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.83B	5.09B	3.94B	3.93B	3.72B	2.74B
Gross Profit	2.21B	2.94B	2.18B	2.27B	2.28B	1.73B
EBITDA	601.85M	708.33M	132.80M	433.21M	234.93M	452.29M
Net Income	364.27M	407.05M	11.53M	216.04M	72.54M	327.65M
Balance Sheet
Total Assets	5.12B	5.25B	4.68B	4.67B	4.17B	3.44B
Cash, Cash Equivalents and Short-Term Investments	2.63B	2.73B	3.28B	3.27B	2.91B	2.78B
Total Debt	287.68M	248.40M	401.26M	192.73M	361.46M	452.81M
Total Liabilities	1.01B	1.10B	803.62M	727.92M	960.59M	868.37M
Stockholders Equity	4.10B	4.15B	3.87B	3.94B	3.21B	2.57B
Cash Flow
Free Cash Flow	328.00M	842.06M	-70.19M	76.55M	395.57M	461.70M
Operating Cash Flow	329.00M	844.39M	-57.12M	78.67M	410.65M	483.32M
Investing Cash Flow	-49.00M	-1.08B	-58.49M	-97.20M	-673.68M	-64.85M
Financing Cash Flow	-212.00M	-310.33M	116.90M	373.91M	389.55M	1.42B

Goodpatch, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 673.00
• 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:7351, the sentiment is Negative. The current price of 673 is above the 20-day moving average (MA) of 585.70, above the 50-day MA of 590.04, and below the 200-day MA of 710.93, indicating a bearish trend. The MACD of -20.18 indicates Positive momentum. The RSI at 27.34 is Positive, neither overbought nor oversold. The STOCH value of <0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7351.

Goodpatch, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4270	77 Outperform	¥5.12B	11.74	―	―	―	―
4494	75 Outperform	¥3.44B	9.22	―	―	1.62%	9.93%
4391	74 Outperform	¥3.57B	14.58	―	1.59%	8.31%	-2.44%
3623	73 Outperform	¥6.24B	15.75	―	1.18%	6.95%	-9.62%
7351	71 Outperform	¥4.87B	12.06	―	1.54%	28.98%	3659.13%
4374	71 Outperform	¥9.59B	19.18	―	0.47%	19.35%	71.74%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Goodpatch, Inc. Corporate Events

Goodpatch Inc. Reports Strong Financial Growth for Fiscal Year 2025

Goodpatch Inc. reported a significant increase in its consolidated financial results for the fiscal year ended August 31, 2025, with net sales rising by 29% to 5,085 million yen. The company achieved substantial growth in operating and ordinary profits, marking a recovery from the previous year’s declines. This financial performance underscores Goodpatch’s strengthened market position and operational efficiency, which could positively impact stakeholders and enhance its competitive edge in the design and technology sector.

The most recent analyst rating on (JP:7351) stock is a Buy with a Yen992.00 price target. To see the full list of analyst forecasts on Goodpatch, Inc. stock, see the JP:7351 Stock Forecast page.