itsumo.inc. (7694) AI Stock Analysis

• Market Cap: ¥3.33B
• Dividend Yield: N/A
• Average Volume (3M): 21.21K
• Price to Earnings (P/E): 12.3
• Beta (1Y): 0.64
• Revenue Growth: 5.77%
• EPS Growth: -277.31%
• Country: JP
• Employees: 279
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 15.86
• Shares Outstanding: 5,953,158
• 10 Day Avg. Volume: 12,410
• 30 Day Avg. Volume: 21,213
• PEG Ratio: 0.18
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.17
• P/FCF Ratio: 38.84
• 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: 60 Neutral
• Price Target: ¥588.00 ▲(11.15% Upside)
• Action: Reiterated Date: 12/27/25
• Date: Action: Reiterated 12/27/25

The score is primarily driven by mixed financial performance: profitability has worsened into losses and leverage is high, partially offset by improved operating and free cash flow. Technicals are also mixed (negative MACD and weak longer-term trend despite better short-term momentum). Valuation is pressured by negative earnings and the absence of dividend yield support.

Positive Factors

Operating Cash Flow Recovery

A sustained shift to positive operating cash flow improves the company’s ability to fund day-to-day operations and service obligations without relying on new external financing. Over a 2–6 month horizon this enhances liquidity, reduces short-term refinancing risk, and provides a foundation for orderly deleveraging or targeted investment despite recent losses.

Improved Free Cash Flow

Recovery in free cash flow indicates the business is beginning to convert revenue into discretionary cash. This durable improvement supports capex, working capital needs, and potential debt reduction. Over months it strengthens balance-sheet flexibility and provides optionality for management to prioritize investments or reduce leverage.

Stable Gross Margin

A stable gross margin signals persistent product-level pricing power or consistent cost control at the production level. This structural margin resilience supports the company’s ability to generate operating cash as revenue scales, making recovery more achievable even while SG&A or other line items are adjusted to restore overall profitability.

Negative Factors

Net Losses / Negative Profitability

Turning to net losses undermines retained earnings and reduces capacity to self-fund strategic initiatives. Persisting negative profitability pressures ROE and investor confidence, may constrain access to capital, and requires sustained operational improvement or restructuring to restore durable earnings power over the medium term.

Elevated Leverage

A high debt-to-equity ratio increases interest and refinancing burden, particularly risky when earnings are negative. Structurally, elevated leverage limits flexibility to invest or weather shocks, raising solvency risk and forcing prioritization of debt service over growth until leverage is meaningfully reduced.

Weakened Operational Margins

Declining EBIT and EBITDA margins point to deteriorating operating efficiency or increased competitive pressure. Over a multi-month horizon, compressed margins reduce cash conversion and make earnings recovery harder, requiring either pricing power restoration or structural cost reductions to return to sustainable profitability.

itsumo.inc. Business Overview & Revenue Model

Company Description

Itsumo Inc. (7694) is a Japanese technology company specializing in software development and IT services, particularly in the fields of artificial intelligence and cloud computing. The company focuses on creating innovative solutions that enhance business efficiency and productivity across various sectors, including finance, healthcare, and logistics. Its core products include AI-driven analytics platforms and cloud-based enterprise management tools.

How the Company Makes Money

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itsumo.inc. Financial Statement Overview

Summary

Mixed fundamentals: revenue growth has slowed and profitability deteriorated with net income turning negative and weaker EBIT/EBITDA margins. Balance sheet leverage is elevated (high debt-to-equity) and ROE is negative, but operating cash flow and free cash flow have improved, signaling some recovery in cash generation.

Income Statement

The company's revenue growth has slowed down significantly from past years, with a minor increase from 2024 to 2025. The gross profit margin is stable, but net income has turned negative in the recent year, resulting in a negative net profit margin. EBIT and EBITDA margins have decreased, indicating weakened operational efficiency.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio, suggesting elevated leverage levels that could pose financial risks. However, the company's equity ratio is stable, reflecting a solid base of stockholder equity relative to total assets. Return on equity has turned negative due to recent losses, which could affect investor confidence.

Cash Flow

The cash flow statement reveals a turnaround in operating cash flow, now positive, improving the operating cash flow to net income ratio. Free cash flow has also improved from the previous year's negative figure, but the free cash flow to net income ratio is still a concern due to negative net income.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	13.85B	13.94B	13.86B	12.31B	11.65B	8.80B
Gross Profit	3.48B	2.98B	3.27B	3.06B	3.03B	2.07B
EBITDA	212.03M	245.99M	456.46M	456.75M	752.63M	577.91M
Net Income	-136.13M	-98.09M	258.96M	-219.83M	361.14M	419.76M
Balance Sheet
Total Assets	8.91B	8.64B	7.42B	6.60B	6.93B	4.43B
Cash, Cash Equivalents and Short-Term Investments	2.52B	2.93B	2.13B	2.70B	4.12B	2.83B
Total Debt	3.82B	4.12B	2.90B	2.50B	2.94B	920.98M
Total Liabilities	6.63B	6.28B	4.97B	4.40B	4.52B	2.40B
Stockholders Equity	2.28B	2.36B	2.45B	2.20B	2.41B	2.03B
Cash Flow
Free Cash Flow	0.00	61.30M	-782.97M	-347.01M	388.81M	657.00M
Operating Cash Flow	0.00	65.31M	-609.17M	-344.31M	399.82M	668.15M
Investing Cash Flow	0.00	-486.29M	-356.31M	-650.34M	-925.65M	-25.62M
Financing Cash Flow	0.00	1.22B	376.18M	-429.20M	1.89B	1.10B

itsumo.inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 529.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7694, the sentiment is Negative. The current price of 529 is below the 20-day moving average (MA) of 603.75, below the 50-day MA of 642.64, and below the 200-day MA of 746.53, indicating a bearish trend. The MACD of -21.08 indicates Positive momentum. The RSI at 37.45 is Neutral, neither overbought nor oversold. The STOCH value of 16.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7694.

itsumo.inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7805	77 Outperform	¥3.53B	4.67	―	1.93%	-1.00%	105.56%
3958	70 Outperform	¥3.27B	5.78	―	3.30%	-3.41%	-24.95%
7919	66 Neutral	¥3.61B	6.84	―	3.69%	0.62%	-24.08%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7916	61 Neutral	¥5.60B	-22.35	―	2.72%	-1.30%	―
7694	60 Neutral	¥3.33B	12.35	―	―	5.77%	-277.31%
3948	53 Neutral	¥6.78B	45.76	―	2.94%	-2.81%	57.37%