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FRONTEO, Inc. (2158) AI Stock Analysis
FRONTEO, Inc.
(TSE/TYO:2158)
FRONTEO's moderate overall score is primarily constrained by its weak cash flow generation, rising debt leverage, and a premium valuation. While the company achieved robust 26% top-line growth and stable gross margins, its poor cash conversion raises earnings quality concerns. Short-term technical indicators show mild bullish momentum, but the stock remains in a long-term downtrend and lacks a dividend to support its high earnings multiple.
FRONTEO, Inc. (2158) vs. iShares MSCI Japan ETF (EWJ)
- Market Cap
- JPY 28.45B
- Dividend Yield
- ―
- Average Volume (3M)
- 259.41K
- Price to Earnings (P/E)
- 47.0
- Beta (1Y)
- 1.50
- Revenue Growth
- 27.44%
- EPS Growth
- 131.69%
- Country
- Japan
- Employees
- 272
- Sector
- Technology
- Sector Strength
- 61
- Industry
- Information Technology Services
FRONTEO, Inc. Business Overview & Revenue Model
Company Description
FRONTEO, Inc. specializes in eDiscovery and related services, particularly for Asian languages, serving clients across Japan, the United States, Korea, and internationally. The company operates through two primary divisions: its LegalTech AI Business...
How the Company Makes Money
FRONTEO primarily generates revenue by providing technology-enabled services and software related to legal and compliance data analysis. Key revenue streams include (1) fees for e-discovery and litigation support services, where the company assists l...
FRONTEO, Inc. Financial Statement Overview
Summary
Strong revenue growth and a return to profitability are heavily offset by doubling debt levels and severely deteriorating cash flow generation with weak earnings conversion.
Income Statement
74PositiveBalance Sheet
62PositiveCash Flow
45Neutral| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.73B | 7.64B | 6.10B | 7.38B | 7.22B | 10.93B |
| Gross Profit | 3.73B | 3.91B | 3.45B | 3.73B | 3.26B | 5.57B |
| EBITDA | 1.17B | 1.17B | 614.80M | -1.93B | -728.90M | 2.69B |
| Net Income | 607.12M | 544.24M | 555.09M | -2.84B | -1.70B | 1.31B |
Balance Sheet | ||||||
| Total Assets | 8.83B | 9.20B | 6.82B | 7.63B | 9.60B | 12.37B |
| Cash, Cash Equivalents and Short-Term Investments | 1.45B | 1.73B | 2.60B | 3.04B | 1.48B | 3.46B |
| Total Debt | 3.90B | 4.02B | 1.99B | 2.93B | 3.09B | 3.75B |
| Total Liabilities | 5.08B | 5.36B | 3.60B | 4.79B | 4.55B | 5.93B |
| Stockholders Equity | 3.75B | 3.84B | 3.23B | 2.84B | 5.05B | 6.44B |
Cash Flow | ||||||
| Free Cash Flow | 0 | 117.94M | 668.34M | 1.23B | -1.54B | 1.72B |
| Operating Cash Flow | 0 | 319.07M | 751.47M | 1.71B | -914.62M | 2.38B |
| Investing Cash Flow | 0 | -2.55B | -254.03M | -181.86M | -625.06M | -618.21M |
| Financing Cash Flow | 0 | 1.34B | -911.48M | -32.15M | -606.32M | -1.46B |
FRONTEO, Inc. Technical Analysis
Price Trends
Market Momentum
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2158, the sentiment is Positive. The current price of 715.00 is above the 20-day moving average (MA) of 709.55, above the 50-day MA of 666.64, and below the 200-day MA of 726.10, indicating a neutral trend. The MACD of 21.52 indicates Negative momentum. The RSI at 56.38 is Neutral, neither overbought nor oversold. The STOCH value of 66.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2158.
FRONTEO, Inc. Peers Comparison
Overall Rating
JP:391686Outperform
JP:398480Outperform
JP:472573Outperform
JP:557466Neutral- JP:215857Neutral
Financial Indicators
| Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| JP:3916 | 86Outperform | JPY 32.56B | 14.90 | ― | 3.54% | 5.74% | -3.58% |
| JP:3984 | 80Outperform | JPY 22.67B | 13.74 | ― | 1.70% | 16.61% | 15.32% |
| JP:4725 | 73Outperform | JPY 33.35B | 9.33 | 10.39% | 5.06% | 3.46% | 6.90% |
| JP:5574 | 66Neutral | JPY 22.68B | 20.73 | ― | ― | 27.68% | 126.99% |
| Sector * | 61Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
| JP:2158 | 57Neutral | JPY 28.61B | 47.02 | ― | ― | 27.44% | 131.69% |
* Technology Sector Average
Performance Comparison
| Show on chart | Ticker | Company Name | Price | Change | % Change |
|---|---|---|---|---|---|
| JP:2158 | FRONTEO, Inc. | 726.00 | -180.00 | -19.87% | |
| JP:4725 | CAC Holdings Corporation | 1975.00 | -50.12 | -2.47% | |
| JP:3916 | Digital Information Technologies Corp. | 1059.00 | -142.91 | -11.89% | |
| JP:3984 | User Local, Inc. | 1410.00 | -501.91 | -26.25% | |
| JP:5574 | ABEJA,Inc. | 2220.00 | -653.00 | -22.73% |
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.
Date of analysis: Aug 19, 2026