Innotech Corporation (9880) AI Stock Analysis

• Market Cap: ¥29.07B
• Dividend Yield: 3.25%
• Average Volume (3M): 166.29K
• Price to Earnings (P/E): 22.4
• Beta (1Y): 1.03
• Revenue Growth: 0.17%
• EPS Growth: 21.01%
• Country: JP
• Employees: 1,775
• Sector: Technology
• Sector Strength: 88
• Industry: Technology Distributors
• EPS (TTM): 29.63
• Shares Outstanding: 13,700,000
• 10 Day Avg. Volume: 181,790
• 30 Day Avg. Volume: 166,290
• PEG Ratio: -0.76
• Price to Book (P/B): 0.68
• Price to Sales (P/S): 0.42
• P/FCF Ratio: 15.55
• 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: 73 Outperform
• Price Target: ¥2,473.00 ▲(15.78% Upside)

Innotech Corporation's stock is supported by strong technical indicators, reflecting bullish momentum, and a solid financial performance with stable revenue growth and a strong capital structure. However, the overbought RSI suggests caution, and the valuation is fair but not particularly attractive. Continued focus on operational efficiency and cash flow management will be crucial for sustaining financial health.

Positive Factors

Recurring revenue & diversified contracts

A high mix of cloud subscriptions and recurring support, plus partnerships and government renewable contracts, creates durable, predictable cash flows and customer lock-in. This diversification reduces cyclicality, supports multi-year revenue visibility and enables sustained investment in product development.

Conservative leverage and capital structure

Low debt-to-equity and a strong equity ratio give the company financial flexibility to fund R&D, strategic partnerships, or acquisitions without stressing liquidity. Conservative leverage supports resilience in downturns and preserves borrowing capacity for long-term strategic initiatives.

Strong operating cash generation

Operating cash flow materially exceeds net income, indicating effective cash conversion from operations. Persistent cash generation underpins reinvestment in cloud infrastructure and product development, funds dividends or buybacks, and reduces reliance on external financing over the medium term.

Negative Factors

Margin compression and falling free cash flow

A trend of falling EBIT/EBITDA margins and lower free cash flow signals structural cost or pricing pressure that can erode reinvestment capacity. Over time, sustained margin compression would constrain R&D, marketing, and competitiveness, weakening long-term profit potential.

Thin net profitability

A net margin under 3% leaves limited buffer against rising costs or revenue shocks and restricts retained earnings available for growth. Persistently thin profitability reduces the firm's ability to self-fund expansion or absorb cyclical downturns without cutting investment or increasing leverage.

Moderate ROE and slight equity erosion

ROE around 4.7% signals modest capital efficiency relative to peers; coupled with a decline in stockholders' equity, this suggests limited effectiveness in generating shareholder returns. Over months, weak ROE can pressure growth funding choices and may necessitate external capital for larger investments.

Innotech Corporation Business Overview & Revenue Model

Company Description

Innotech Corporation, together with its subsidiaries, imports and sells electronic design automation software, electric components, and semiconductor products. The company also develops and sells testers and CPU boards. Its products include industrial boards/embedded systems, environmentally resistant boards/systems, EDA and OrCAD software, servers/storage solutions, noise analysis solutions, model-based development solutions, digital media analysis and inspection solutions, testers/probe cards, face recognition AI solution, and robot automation services. The company was incorporated in 1976 and is headquartered in Yokohama, Japan.

How the Company Makes Money

Innotech Corporation generates revenue primarily through the sale of software licenses, cloud services subscriptions, and consulting fees for technology integration. Key revenue streams include recurring income from cloud-based service models, one-time payments for software installations, and ongoing support contracts. The company has established significant partnerships with major industry players, allowing it to leverage collaborative projects and joint ventures that expand its market reach. Additionally, Innotech benefits from government contracts focused on renewable energy initiatives, further diversifying its income sources.

Innotech Corporation Financial Statement Overview

Summary

Innotech Corporation demonstrates stable revenue growth and a strong capital structure, with moderate profitability and cash flow generation. While the company maintains a healthy gross profit margin and conservative leverage, declining EBIT and EBITDA margins, along with reduced free cash flow, highlight areas for improvement.

Income Statement

Innotech Corporation shows a stable revenue growth trend with a 1.5% increase in the latest year. The gross profit margin is healthy at 30.1%, though it has slightly decreased from the previous year. The net profit margin stands at 2.9%, indicating moderate profitability. However, there is a noticeable decline in EBIT and EBITDA margins, suggesting increased operational costs or reduced efficiency.

Balance Sheet

The company's debt-to-equity ratio is 0.38, reflecting a conservative leverage position. Return on equity is moderate at 4.7%, indicating average efficiency in generating returns from equity. The equity ratio is strong at 54.1%, highlighting a solid capital structure. However, there is a slight decrease in stockholders' equity, which could be a concern if it continues.

Cash Flow

Operating cash flow to net income ratio is 1.43, showing strong cash generation relative to net income. However, free cash flow has decreased by 20.9% compared to the previous year, indicating potential challenges in cash generation or increased capital expenditures. The free cash flow to net income ratio is 0.93, suggesting that the company is generating adequate free cash flow relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	41.22B	41.98B	41.36B	38.63B	37.24B	32.54B
Gross Profit	12.34B	12.65B	13.16B	12.24B	11.22B	9.95B
EBITDA	2.98B	3.67B	3.96B	3.91B	3.88B	3.20B
Net Income	951.89M	1.20B	1.48B	1.67B	2.19B	1.53B
Balance Sheet
Total Assets	46.71B	47.01B	47.83B	43.63B	40.54B	37.68B
Cash, Cash Equivalents and Short-Term Investments	6.91B	6.53B	8.88B	6.60B	6.66B	5.63B
Total Debt	10.06B	9.62B	11.42B	9.14B	8.60B	8.55B
Total Liabilities	21.58B	20.88B	22.51B	19.04B	17.37B	16.55B
Stockholders Equity	24.50B	25.44B	24.73B	23.73B	22.34B	20.37B
Cash Flow
Free Cash Flow	-45.76M	1.12B	1.42B	110.17M	1.46B	-202.23M
Operating Cash Flow	85.64M	1.71B	2.62B	1.68B	2.74B	836.88M
Investing Cash Flow	-1.01B	-410.03M	-1.44B	-1.69B	-1.15B	-2.21B
Financing Cash Flow	-1.06B	-3.38B	808.50M	-517.24M	-900.07M	685.72M

Innotech Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2136.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9880, the sentiment is Positive. The current price of 2136 is below the 20-day moving average (MA) of 2145.95, above the 50-day MA of 2051.18, and above the 200-day MA of 1570.98, indicating a bullish trend. The MACD of 57.52 indicates Negative momentum. The RSI at 62.13 is Neutral, neither overbought nor oversold. The STOCH value of 76.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9880.

Innotech Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8154	81 Outperform	¥197.60B	8.44	14.97%	2.94%	9.67%	45.58%
8093	76 Outperform	¥23.38B	6.25	―	3.83%	41.87%	167.99%
7537	75 Outperform	¥35.88B	11.54	―	5.16%	1.71%	-29.37%
8137	74 Outperform	¥48.68B	19.67	―	4.12%	-4.88%	-26.05%
9880	73 Outperform	¥29.07B	22.35	―	3.25%	0.17%	21.01%
8023	72 Outperform	¥15.30B	9.16	―	4.62%	-2.98%	4.56%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%