Goodpatch, Inc. (7351) AI Stock Analysis

• Market Cap: ¥4.23B
• Dividend Yield: 1.54%
• Average Volume (3M): 31.98K
• Price to Earnings (P/E): 21.7
• Beta (1Y): 0.73
• 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: 9,246,820
• 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: 66 Neutral
• Price Target: ¥494.00 ▼(-26.60% Downside)
• Action: Downgraded Date: 01/16/26
• Date: Action: Downgraded 01/16/26

The score is driven by strong financial performance (high growth, strong cash generation, and low leverage), but is meaningfully held back by weak technicals with the stock trading below key moving averages. Valuation is supportive with a moderate P/E and a modest dividend yield.

Positive Factors

Revenue Growth

Sustained 32.6% top-line growth signals durable demand for Goodpatch’s design and consulting services. Persistent revenue expansion supports scale benefits, recurring client relationships and reinvestment in talent and offerings, strengthening long-term competitive positioning.

Free Cash Flow Generation

Very strong free cash flow expansion and efficient conversion of profits into cash provide durable funding for operations, R&D and potential shareholder returns. High cash generation reduces financing reliance and increases resilience through business cycles.

Low Leverage / Strong Capital Base

Extremely low leverage and a high equity ratio give Goodpatch long-term financial flexibility. This capital structure supports investment in growth, cushions downturns, and preserves capacity for M&A or strategic hiring without stressing liquidity.

Negative Factors

Modest Net Margin

A single-digit net margin limits retained earnings and reduces buffer against rising costs. Over the medium term this constrains ability to scale profitability, limits free cash retention per revenue dollar, and makes earnings more sensitive to margin pressure.

Cash Flow Volatility

Historical swings to negative cash flow point to potential variability in client billing, project timing or working capital. Persistent volatility can impair planning, force short-term financing in weak periods, and complicate consistent reinvestment or payout policies.

Moderate Return on Equity

ROE below high-performing peers suggests capital is not being converted into commensurate shareholder returns. Over time this may pressure expectations for efficiency improvements and could limit long-term equity value creation absent margin or asset turnover gains.

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

null

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	Aug 2025	Aug 2024	Aug 2023	Aug 2022	Aug 2021
Income Statement
Total Revenue	5.09B	3.94B	3.93B	3.72B	2.74B
Gross Profit	2.94B	2.18B	2.27B	2.28B	1.73B
EBITDA	708.33M	132.80M	433.21M	234.93M	452.29M
Net Income	407.05M	11.53M	216.04M	72.54M	327.65M
Balance Sheet
Total Assets	5.25B	4.68B	4.67B	4.17B	3.44B
Cash, Cash Equivalents and Short-Term Investments	2.73B	3.28B	3.27B	2.91B	2.78B
Total Debt	248.40M	401.26M	192.73M	361.46M	452.81M
Total Liabilities	1.11B	804.63M	730.54M	963.29M	868.37M
Stockholders Equity	4.15B	3.87B	3.94B	3.21B	2.57B
Cash Flow
Free Cash Flow	842.06M	-70.19M	76.55M	395.57M	461.70M
Operating Cash Flow	844.39M	-57.12M	78.67M	410.65M	483.32M
Investing Cash Flow	-1.08B	-58.49M	-97.20M	-673.68M	-64.85M
Financing Cash Flow	-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: Negative
• RSI: Neutral
• STOCH: Neutral

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 472.50, above the 50-day MA of 516.08, and below the 200-day MA of 680.15, indicating a bearish trend. The MACD of -14.59 indicates Negative momentum. The RSI at 38.02 is Neutral, neither overbought nor oversold. The STOCH value of 33.47 is Neutral, 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
4811	73 Outperform	¥9.37B	19.47	―	1.01%	15.34%	67.96%
4431	71 Outperform	¥39.71B	20.49	―	0.52%	26.98%	19.69%
4686	69 Neutral	¥225.75B	21.08	―	0.43%	15.01%	19.66%
7351	66 Neutral	¥4.23B	21.71	―	1.54%	28.98%	3659.13%
3633	65 Neutral	¥10.06B	13.23	―	2.16%	2.75%	25.24%
4784	65 Neutral	¥195.68B	46.19	―	1.76%	377.76%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Goodpatch, Inc. Corporate Events

Goodpatch Posts Profit Decline but Holds Full-Year Forecast and Dividend Plan

Goodpatch Inc. reported consolidated results for the three months ended November 30, 2025, showing flat net sales of ¥1,206 million, down 0.6% year on year, and a sharp decline in profitability, with operating profit falling 39.9% to ¥77 million and profit attributable to owners of parent sliding 31.5% to ¥60 million; earnings per share dropped to ¥6.98 from ¥9.91 a year earlier. Despite the weaker quarterly earnings, the company’s financial position remains solid, with an equity-to-asset ratio of 84.3% and net assets of ¥4,150 million, and management kept its full-year forecast unchanged, expecting net sales of ¥5,600 million and only modest profit growth, as well as maintaining its planned annual dividend of ¥10 per share, suggesting confidence in medium-term performance but signaling near-term margin pressure for shareholders to monitor.

The most recent analyst rating on (JP:7351) stock is a Buy with a Yen633.00 price target. To see the full list of analyst forecasts on Goodpatch, Inc. stock, see the JP:7351 Stock Forecast page.