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Headwaters Co., Ltd. (4011) AI Stock Analysis
Headwaters Co., Ltd.
(TSE/TYO:4011)
The score is held back primarily by weakening fundamentals—profitability compression, materially higher leverage, and negative operating/free cash flow—despite strong revenue growth. Technicals are supportive with the stock trading above major moving averages and moderate positive momentum, but valuation is unattractive/unclear due to a negative P/E and no dividend support.
Headwaters Co., Ltd. (4011) vs. iShares MSCI Japan ETF (EWJ)
- Market Cap
- JPY 12.86B
- Dividend Yield
- ―
- Average Volume (3M)
- 51.99K
- Price to Earnings (P/E)
- -163.7
- Beta (1Y)
- 1.31
- Revenue Growth
- 74.81%
- EPS Growth
- -141.25%
- Country
- Japan
- Employees
- 389
- Sector
- Technology
- Sector Strength
- 61
- Industry
- Software - Application
Headwaters Co., Ltd. Business Overview & Revenue Model
Company Description
Headwaters Co.,Ltd engages in planning and developing artificial intelligence (AI) applications in Japan. The company offers digital transformation, AI, and other solutions. It also offers AI integration services, including consulting and development...
How the Company Makes Money
Headwaters makes money primarily by delivering DX/AI projects to corporate clients and recognizing revenue through fees tied to professional services and project execution. Key revenue streams generally consist of (1) consulting and solution planning...
Headwaters Co., Ltd. Financial Statement Overview
Summary
Strong and accelerating revenue growth (~21% in 2025) and healthy gross margin (~44%) are positives, but the overall profile is pressured by a sharp profitability decline (net margin ~1.5% vs ~9.4% in 2024), a meaningful leverage increase (debt-to-equity ~1.43x), and a reversal to negative operating and free cash flow in 2025.
Income Statement
62PositiveBalance Sheet
49NeutralCash Flow
34Negative| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.21B | 3.90B | 2.91B | 2.32B | 1.57B | 1.17B |
| Gross Profit | 1.36B | 1.73B | 1.24B | 855.09M | 645.54M | 524.26M |
| EBITDA | 104.18M | 256.72M | 327.00M | 110.03M | 121.43M | 70.42M |
| Net Income | 119.39M | 57.66M | 272.79M | 70.68M | 75.14M | 27.04M |
Balance Sheet | ||||||
| Total Assets | 1.66B | 3.85B | 1.81B | 1.29B | 1.17B | 973.21M |
| Cash, Cash Equivalents and Short-Term Investments | 833.10M | 625.14M | 843.23M | 897.90M | 818.61M | 765.55M |
| Total Debt | 0 | 1.90B | 0 | 0 | 0 | 0 |
| Total Liabilities | 448.06M | 2.50B | 534.95M | 332.58M | 293.80M | 172.91M |
| Stockholders Equity | 1.20B | 1.33B | 1.27B | 958.44M | 875.44M | 800.30M |
Cash Flow | ||||||
| Free Cash Flow | 0 | -60.64M | 117.83M | 71.44M | 43.41M | 45.34M |
| Operating Cash Flow | 0 | -38.71M | 144.41M | 87.66M | 84.27M | 48.08M |
| Investing Cash Flow | 0 | -2.09B | -210.97M | -13.48M | -31.21M | -52.78M |
| Financing Cash Flow | 0 | 1.91B | 10.25M | 5.40M | 0 | 16.75M |
Headwaters Co., Ltd. Technical Analysis
Price Trends
Market Momentum
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4011, the sentiment is Negative. The current price of 2100.00 is below the 20-day moving average (MA) of 2264.60, below the 50-day MA of 2328.82, and below the 200-day MA of 2373.99, indicating a bearish trend. The MACD of -51.36 indicates Positive momentum. The RSI at 41.90 is Neutral, neither overbought nor oversold. The STOCH value of 26.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4011.
Headwaters Co., Ltd. Peers Comparison
Overall Rating
JP:406072Outperform
JP:444872Outperform
JP:525667Neutral
JP:503366Neutral
JP:439761Neutral- JP:401151Neutral
Financial Indicators
| Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| JP:4060 | 72Outperform | JPY 6.63B | 24.56 | ― | 0.79% | 37.13% | -7.58% |
| JP:4448 | 72Outperform | JPY 14.50B | 19.86 | ― | ― | 14.06% | ― |
| JP:5256 | 67Neutral | JPY 3.89B | 71.48 | ― | ― | 23.30% | -70.98% |
| JP:5033 | 66Neutral | JPY 7.96B | 47.99 | ― | ― | 7.04% | -67.36% |
| Sector * | 61Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
| JP:4397 | 61Neutral | JPY 6.01B | 16.11 | ― | ― | 23.50% | 2.72% |
| JP:4011 | 51Neutral | JPY 12.86B | -163.68 | ― | ― | 74.81% | -141.25% |
* Technology Sector Average
Performance Comparison
| Show on chart | Ticker | Company Name | Price | Change | % Change |
|---|---|---|---|---|---|
| JP:4011 | Headwaters Co., Ltd. | 2100.00 | -1320.00 | -38.60% | |
| JP:4060 | rakumo Inc. | 1136.00 | 30.04 | 2.72% | |
| JP:4397 | TeamSpirit, Inc. | 364.00 | -143.00 | -28.21% | |
| JP:4448 | Chatwork Co.Ltd. | 340.00 | -53.00 | -13.49% | |
| JP:5033 | Nulab Inc. | 1228.00 | 465.00 | 60.94% | |
| JP:5256 | Fusic Co.,Ltd. | 3015.00 | 442.00 | 17.18% |
Headwaters Co., Ltd. Corporate Events
Headwaters Doubles Sales on AI Expansion but Profitability Still Lagging
Headwaters reported a sharp expansion in first-half FY2026 consolidated net sales, which more than doubled year on year to about ¥3.35 billion, driven mainly by growth in Enterprise AI Solutions and AI Workflow Engineering. The company also inte...
Headwaters Posts Strong Sales Growth and Projects Profit Rebound for 2026
Headwaters Co., Ltd. reported a sharp increase in net sales for the first half of fiscal 2026, with revenue more than doubling year-on-year to ¥3,351 million and operating profit turning positive. Despite this topline growth, the company posted...
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: Oct 07, 2026