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Headwaters Co., Ltd.
(4011)
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Rating:51Neutral
Price Target:
¥2,472.00
▼(-14.37% Downside)
Action:Reiterated
Date:10/07/26
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.
Positive Factors
Strong Revenue Growth
Strong and accelerating revenue growth indicates that Headwaters is expanding its DX and AI project activity with corporate clients. Continued top-line progress can support greater scale, broaden implementation experience, and create a stronger base for improving profitability over the next several quarters.
Negative Factors
Sharp Profitability Compression
The sharp margin decline shows that higher sales are not currently translating proportionally into earnings. Rising costs or weaker operating leverage could persist as the business scales, reducing internal funding capacity and making future profit improvement dependent on better delivery efficiency.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Revenue Growth
Strong and accelerating revenue growth indicates that Headwaters is expanding its DX and AI project activity with corporate clients. Continued top-line progress can support greater scale, broaden implementation experience, and create a stronger base for improving profitability over the next several quarters.
Read all positive factors
Headwaters Co., Ltd. (4011) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥15.06B
Dividend YieldN/A
Average Volume (3M)43.62K
Price to Earnings (P/E)―
Beta (1Y)1.30
Revenue Growth74.81%
EPS Growth-141.25%
CountryJP
Employees389
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)30.35
Shares Outstanding6,123,553
10 Day Avg. Volume21,180
30 Day Avg. Volume43,620
Financial Highlights & Ratios
PEG Ratio-2.36
Price to Book (P/B)8.06
Price to Sales (P/S)2.75
P/FCF Ratio-176.84
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 developm...
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 plann...
Headwaters Co., Ltd. Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
49
Neutral
Cash Flow
34
Negative
| 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 | 0.00 | 1.90B | 0.00 | 0.00 | 0.00 | 0.00 |
| 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 | 0.00 | -60.64M | 117.83M | 71.44M | 43.41M | 45.34M |
| Operating Cash Flow | 0.00 | -38.71M | 144.41M | 87.66M | 84.27M | 48.08M |
| Investing Cash Flow | 0.00 | -2.09B | -210.97M | -13.48M | -31.21M | -52.78M |
| Financing Cash Flow | 0.00 | 1.91B | 10.25M | 5.40M | 0.00 | 16.75M |
Headwaters Co., Ltd. Technical Analysis
Positive
2887.00
Price Trends
2256.36
Positive
2197.33
Positive
2417.97
Negative
Market Momentum
15.51
Positive
53.78
Neutral
54.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4011, the sentiment is Positive. The current price of 2887 is above the 20-day moving average (MA) of 2370.85, above the 50-day MA of 2256.36, and above the 200-day MA of 2417.97, indicating a neutral trend. The MACD of 15.51 indicates Positive momentum. The RSI at 53.78 is Neutral, neither overbought nor oversold. The STOCH value of 54.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4011.
Headwaters Co., Ltd. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | ¥6.94B | 26.05 | ― | 0.76% | 37.13% | -7.58% | |
68 Neutral | ¥6.13B | 13.54 | ― | ― | 23.42% | 457.78% | |
67 Neutral | ¥8.03B | 48.50 | ― | ― | 7.04% | -67.36% | |
63 Neutral | ¥15.18B | 20.79 | ― | ― | 14.06% | ― | |
62 Neutral | ¥4.94B | 89.50 | ― | ― | 23.30% | -70.98% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
51 Neutral | ¥15.06B | -187.06 | ― | ― | 74.81% | -141.25% |
* Technology Sector Average
JP:4011
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Headwaters Co., Ltd. Corporate Events
Headwaters Doubles Sales on AI Expansion but Profitability Still Lagging
Sep 15, 2026
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 i...
Headwaters Posts Strong Sales Growth and Projects Profit Rebound for 2026
Sep 15, 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 post...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.