AeroEdge Co.,Ltd (7409) AI Stock Analysis

• Market Cap: ¥44.68B
• Dividend Yield: N/A
• Average Volume (3M): 50.28K
• Price to Earnings (P/E): 48.3
• Beta (1Y): 1.53
• Revenue Growth: 21.00%
• EPS Growth: 53.61%
• Country: JP
• Employees: 102
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 13.42
• Shares Outstanding: 11,883,636
• 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: ¥4,000.00
• Price Target Upside: 6.38% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: ¥3,782.00 ▲(0.59% Upside)

The score is driven primarily by improved profitability and a stronger balance sheet, tempered by persistent negative free cash flow and a recent revenue growth decline. Technicals are supportive with a strong uptrend, but overbought signals add near-term risk. Valuation is a notable headwind given the high P/E and lack of dividend yield data.

Positive Factors

High profitability

Sustained high gross and net margins indicate durable pricing power and efficient production of complex aerospace components. This margin profile supports reinvestment in R&D and product development and cushions earnings against modest volume volatility over the medium term.

Improved leverage

A materially lower debt-to-equity ratio strengthens financial flexibility and reduces interest burden, enabling the firm to pursue strategic bids, fund R&D or absorb temporary shocks without excessive refinancing risk, improving resilience over multiple quarters.

Contracted and recurring revenue streams

Long-term OEM and government contracts plus after-market MRO work create predictable, recurring cash inflows and deepen customer relationships. This portfolio mix reduces revenue cyclicality and supports steady utilization and aftermarket margins over a multi-quarter horizon.

Negative Factors

Persistent negative free cash flow

Ongoing negative free cash flow limits the company’s ability to self-fund capex, R&D and working capital needs. Over several quarters this can force reliance on external financing, constrain strategic investments, and increase vulnerability to interest rate or liquidity shocks.

Recent revenue decline

A year-over-year revenue decline undermines the scale that supports high margins and fixed-cost absorption in aerospace manufacturing. If the downtrend persists it could pressure margins, reduce bargaining power with suppliers, and limit capacity to fund long-cycle programs.

Moderate equity ratio limits cushion

A moderate equity ratio provides less capital buffer against contract delays or cost overruns. Coupled with negative FCF, this reduces the firm’s ability to absorb shocks or finance large program investments internally, potentially necessitating dilutive or costly external funding.

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 stabilized around ~20%), and leverage has improved 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, which raises execution and funding risk.

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	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.60B	3.60B	3.35B	2.92B	1.96B	848.26M
Gross Profit	1.69B	1.69B	1.51B	1.20B	560.56M	-256.98M
EBITDA	1.03B	1.04B	1.27B	1.08B	532.02M	-283.00M
Net Income	734.25M	734.00M	698.74M	673.04M	7.32M	-766.15M
Balance Sheet
Total Assets	8.21B	8.21B	7.24B	5.79B	5.36B	5.22B
Cash, Cash Equivalents and Short-Term Investments	1.57B	1.57B	1.81B	1.73B	1.12B	1.82B
Total Debt	3.59B	3.59B	3.20B	3.72B	4.06B	4.20B
Total Liabilities	4.32B	4.32B	4.14B	4.17B	4.40B	4.24B
Stockholders Equity	3.89B	3.89B	3.09B	1.62B	955.01M	982.82M
Cash Flow
Free Cash Flow	0.00	-618.00M	-134.86M	938.37M	-756.30M	-154.09M
Operating Cash Flow	0.00	1.33B	1.39B	1.08B	38.84M	-88.41M
Investing Cash Flow	0.00	-1.95B	-1.53B	-137.36M	-794.90M	-53.06M
Financing Cash Flow	0.00	378.00M	234.24M	-337.38M	53.37M	204.23M

AeroEdge Co.,Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3760.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 3760 is above the 20-day moving average (MA) of 3191.95, above the 50-day MA of 2556.55, and above the 200-day MA of 1611.42, indicating a bullish trend. The MACD of 310.88 indicates Negative momentum. The RSI at 72.64 is Negative, neither overbought nor oversold. The STOCH value of 86.15 is Negative, 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	72 Outperform	¥317.40B	15.18	19.39%	1.36%	0.58%	-24.42%
7013	70 Outperform	¥4.09T	30.21	26.54%	0.71%	-1.66%	19.02%
7012	66 Neutral	¥2.33T	23.82	13.25%	1.40%	14.12%	54.64%
7018	66 Neutral	¥28.46B	16.05	―	0.27%	1.60%	314.05%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7409	61 Neutral	¥44.68B	48.33	―	―	21.00%	53.61%
7011	60 Neutral	$15.99T	54.91	10.81%	0.62%	-0.88%	6.85%