AeroEdge Co.,Ltd (7409) AI Stock Analysis

• Market Cap: ¥45.23B
• Dividend Yield: N/A
• Average Volume (3M): 50.28K
• Price to Earnings (P/E): 19.1
• Beta (1Y): 1.63
• Revenue Growth: 21.00%
• EPS Growth: 53.61%
• Country: JP
• Employees: 102
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): N/A
• Shares Outstanding: 11,886,636
• 10 Day Avg. Volume: 65,550
• 30 Day Avg. Volume: 50,283
• PEG Ratio: 3.60
• Price to Book (P/B): 2.98
• Price to Sales (P/S): 3.22
• P/FCF Ratio: -18.80
• 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: ¥6,500.00
• Price Target Upside: 62.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 59 Neutral
• Price Target: ¥4,170.00 ▲(4.51% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven by improved profitability and a stronger balance sheet, but is held back by negative free cash flow and recent revenue contraction. Technicals show a strong uptrend, yet momentum is overextended, and the high P/E valuation adds downside risk if growth or cash generation falters.

Positive Factors

Margin recovery & profitability

Sustained improvement in gross and net margins reflects durable operational fixes and pricing power in precision aerospace components. Higher margins provide internal funds for reinvestment and buffer against cyclical demand, supporting longer-term profitability even if top-line growth slows.

Reduced leverage / stronger balance sheet

Material reduction in leverage materially lowers default and refinancing risk, increasing financial flexibility. A healthier debt profile improves ability to fund working capital and capital expenditures through cycles, making the business more resilient to industry downturns.

Specialized aerospace manufacturing capabilities

High-spec machining and rigorous quality controls create structural barriers to entry and long supplier qualification lead times. These technical capabilities and certifications support stickier customer relationships and defend margins versus general industrial suppliers over the medium term.

Negative Factors

Persistent negative free cash flow

Ongoing negative free cash flow signals the business has not yet converted accounting profits into sustained cash generation. Over time this raises funding risk, may require external financing for capex or working capital, and constrains strategic flexibility.

Recent revenue contraction

A drop in revenue indicates potential demand weakness or order timing issues in aerospace parts. For a manufacturing business with substantial fixed costs, declining volumes can quickly erode utilization, strain margins, and reveal exposure to cyclical aerospace demand patterns.

Moderate equity ratio limits cushion

While leverage has improved, a only-moderate equity ratio implies a limited capital buffer against shocks. Coupled with negative free cash flow, the company may face constrained ability to absorb demand downturns without tapping external capital, increasing long-term funding uncertainty.

AeroEdge Co.,Ltd Business Overview & Revenue Model

Company Description

AeroEdge Co., Ltd. manufactures and sells aerospace engine parts in Japan. It also offers machining and additive manufacturing services; and engineering consulting services. The company was incorporated in 2015 and is headquartered in Ashikaga, Japan.

AeroEdge Co.,Ltd Financial Statement Overview

Summary

Profitability has recovered strongly (gross margin improved to 46.8% and net margin around 20%), and leverage has declined materially (debt-to-equity down to 0.92). Offsetting this, revenue growth turned negative (-3.4% in 2025) and free cash flow has been persistently negative, raising execution and funding-risk concerns.

Income Statement

AeroEdge Co.,Ltd has shown a strong recovery in its income statement metrics over the past few years. The gross profit margin has improved significantly from negative values in 2021 to a healthy 46.8% in 2025. The net profit margin has also stabilized at around 20%, indicating strong profitability. However, the recent revenue growth rate of -3.4% in 2025 suggests a potential slowdown in growth, which could be a concern if it continues.

Balance Sheet

The company's balance sheet shows a reduction in leverage, with the debt-to-equity ratio decreasing from over 4 in 2021 to 0.92 in 2025, indicating improved financial stability. Return on equity has been positive and relatively stable, reflecting efficient use of equity. However, the equity ratio remains moderate, suggesting a balanced but cautious approach to financing.

Cash Flow

AeroEdge's cash flow statement reveals challenges, particularly with free cash flow, which has been negative in recent years. The operating cash flow to net income ratio is healthy, but the negative free cash flow to net income ratio indicates potential issues in generating sufficient cash flow from operations to cover investments. This could pose risks if not addressed.

Breakdown	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	3.60B	3.35B	2.92B	1.96B	848.26M
Gross Profit	1.67B	1.49B	1.18B	526.00M	-291.40M
EBITDA	1.04B	1.09B	918.33M	343.78M	-283.00M
Net Income	734.43M	698.74M	673.04M	7.32M	-766.15M
Balance Sheet
Total Assets	8.21B	7.24B	5.79B	5.36B	5.22B
Cash, Cash Equivalents and Short-Term Investments	1.57B	1.81B	1.73B	1.12B	1.82B
Total Debt	3.59B	3.20B	3.72B	4.06B	4.00B
Total Liabilities	4.32B	4.14B	4.17B	4.40B	4.24B
Stockholders Equity	3.89B	3.09B	1.62B	955.01M	982.82M
Cash Flow
Free Cash Flow	-617.48M	-128.53M	958.52M	-694.34M	-146.39M
Operating Cash Flow	1.33B	1.39B	1.08B	38.84M	-88.41M
Investing Cash Flow	-1.95B	-1.53B	-137.36M	-794.90M	-53.06M
Financing Cash Flow	378.65M	234.24M	-337.38M	53.37M	204.23M

AeroEdge Co.,Ltd Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3990.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7409, the sentiment is Neutral. The current price of 3990 is below the 20-day moving average (MA) of 4872.00, below the 50-day MA of 4160.16, and above the 200-day MA of 2240.14, indicating a neutral trend. The MACD of -16.81 indicates Positive momentum. The RSI at 38.83 is Neutral, neither overbought nor oversold. The STOCH value of 8.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7409.

AeroEdge Co.,Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6381	75 Outperform	¥64.03B	13.24	―	3.95%	-1.67%	-4.39%
7003	72 Outperform	¥617.03B	17.86	13.69%	0.60%	7.78%	-53.68%
6363	70 Outperform	¥67.96B	4.09	―	3.09%	6.35%	-34.20%
6480	67 Neutral	¥60.03B	11.27	―	2.82%	8.75%	177.16%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7409	59 Neutral	¥45.23B	19.10	―	―	21.00%	53.61%
186A	49 Neutral	¥133.69B	-15.61	―	―	85.06%	43.93%