AeroEdge Co.,Ltd (7409) AI Stock Analysis

• Market Cap: ¥65.02B
• Dividend Yield: N/A
• Average Volume (3M): 50.28K
• Price to Earnings (P/E): 62.5
• Beta (1Y): 1.62
• 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: 3.97
• Price to Book (P/B): 3.32
• Price to Sales (P/S): 3.59
• P/FCF Ratio: -20.92
• 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: ¥6,000.00
• Price Target Upside: 9.69% 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: ¥5,622.00 ▲(2.78% 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

Improved profitability

Margins have recovered materially, with gross margin at 46.8% and net margin near 20%. Sustained higher margins indicate stronger pricing power and operational execution, creating durable earnings resilience and more room to absorb cost variability or invest in product quality over the next several quarters.

Material deleveraging

Leverage has fallen sharply, improving financial stability and lowering interest and refinancing risk. A debt-to-equity near 0.92 gives the company more flexibility to fund working capital, capex or strategic moves without immediate solvency pressure, enhancing resilience through industry cycles.

Aerospace manufacturing specialization

Focus on precision aerospace components and advanced processing creates high barriers: certification requirements, tight quality controls and specialized capabilities. This supports durable customer relationships, pricing stickiness, and competitive differentiation versus general industrial suppliers.

Negative Factors

Persistently negative free cash flow

Sustained negative free cash flow undermines self-funded growth and raises reliance on external financing. Even with healthy operating cash to net income, continued negative FCF can strain liquidity, limit reinvestment capacity and elevate funding risk if margins or revenues weaken.

Recent revenue contraction

A drop to -3.4% revenue growth signals possible demand softness or execution issues. Revenue decline can reverse operating leverage gains, pressure utilization of specialized capacity, and make margin maintenance harder, complicating the path to consistent cash generation.

Moderate equity ratio and funding risk

A moderate equity ratio provides a limited capital cushion against shocks. Coupled with negative FCF, this raises the likelihood of needing external capital or constrained investment choices. That combination heightens execution risk and could limit ability to pursue larger aerospace contracts.

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.

How the Company Makes Money

AeroEdge Co., Ltd generates revenue primarily through the sale of its aerospace components and systems to original equipment manufacturers (OEMs) and government defense contracts. The company has established key partnerships with major airlines and defense contractors, which provide a steady stream of orders and long-term contracts. Additionally, AeroEdge benefits from after-market services, including maintenance, repair, and overhaul (MRO) services, which contribute to recurring revenue. The company's focus on research and development allows it to innovate and expand its product offerings, further driving sales and profitability.

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	1.69B	1.51B	1.20B	560.56M	-256.98M
EBITDA	1.04B	1.27B	1.08B	532.02M	-283.00M
Net Income	734.00M	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	4.20B
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	-618.00M	-134.86M	938.37M	-756.30M	-154.09M
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	378.00M	234.24M	-337.38M	53.37M	204.23M

AeroEdge Co.,Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5470.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7409, the sentiment is Positive. The current price of 5470 is above the 20-day moving average (MA) of 4603.75, above the 50-day MA of 3481.85, and above the 200-day MA of 1963.40, indicating a bullish trend. The MACD of 587.42 indicates Negative momentum. The RSI at 72.99 is Negative, neither overbought nor oversold. The STOCH value of 76.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7409.

AeroEdge Co.,Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7014	75 Outperform	¥386.86B	20.27	19.39%	1.36%	0.58%	-24.42%
7011	69 Neutral	¥16.86T	59.23	10.81%	0.62%	-0.88%	6.85%
7013	67 Neutral	¥4.64T	37.70	26.54%	0.71%	-1.66%	19.02%
7012	64 Neutral	¥3.06T	27.84	13.25%	1.40%	14.12%	54.64%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7018	63 Neutral	¥29.73B	17.45	―	0.27%	1.60%	314.05%
7409	59 Neutral	¥65.02B	62.54	―	―	21.00%	53.61%