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Neural Group Inc. (4056) AI Stock Analysis

JP:4056

Neural Group Inc.

(TSE/TYO:4056)

Select Model
Rating:43Neutral
Price Target:JPY 193.00â–²(6.04% Upside)
Action:reiterated
Date:10/03/26

The score is primarily held down by weak profitability and lingering leverage risk despite strong gross margins and improved cash flow, alongside bearish technicals with the price below all major moving averages and negative MACD. Valuation provides limited support because earnings are negative and no dividend yield is available.

Positive Factors
Strong Gross MarginsConsistently high gross margins indicate favorable underlying unit economics and provide a meaningful base for future operating leverage. If management can stabilize revenue and control expenses, this margin profile could support stronger earnings conversion over the next several quarters.
Negative Factors
Revenue ContractionThe reversal from revenue growth to an 8.78% decline signals weakening business momentum and makes it harder to absorb fixed operating costs. Continued contraction could limit investment capacity, delay operating leverage, and prevent the company from converting strong gross margins into durable earnings.

Neural Group Inc. (4056) vs. iShares MSCI Japan ETF (EWJ)

-80%-60%-40%-20%0%20%40%JP:4056-66.67%EWJ+15.87%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26
Market Cap
JPY 3.13B
Dividend Yield
―
Average Volume (3M)
453.29K
Price to Earnings (P/E)
-7.5
Beta (1Y)
0.72
Revenue Growth
-6.88%
EPS Growth
-929.79%
Country
Japan
Employees
204
Sector
Technology
Sector Strength
61
Industry
Software - Application

Neural Group Inc. Business Overview & Revenue Model

Company Description

Neural Pocket Inc. develops and holds proprietary rights to a diverse portfolio of artificial intelligence technologies. These AI solutions are adept at tasks such as image and video recognition, data classification, comprehending spatial environment...

Neural Group Inc. Financial Statement Overview

Summary

Financials are mixed: gross margin remains strong (~64–66%) and operating/free cash flow turned positive in 2024–2025, but revenue growth turned negative in 2025 and profitability is still weak with net losses in 2024–2025. Balance-sheet risk remains an overhang despite improved debt-to-equity (~1.02x in 2025) because leverage is still meaningful and ROE remains negative.

Income Statement

42Neutral

Balance Sheet

38Negative

Cash Flow

57Neutral
Financial statement breakdown
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue3.15B3.30B3.56B3.18B2.88B1.01B
Gross Profit2.01B2.15B2.37B2.06B1.85B787.57M
EBITDA-84.66M142.80M187.38M-490.05M-21.77M111.26M
Net Income-266.29M-107.66M-60.93M-650.12M-909.18M11.27M
Balance Sheet
Total Assets4.44B4.20B2.98B3.41B3.89B2.42B
Cash, Cash Equivalents and Short-Term Investments2.12B2.22B670.06M821.19M1.11B1.43B
Total Debt2.14B1.91B1.88B2.42B2.85B961.40M
Total Liabilities2.76B2.31B2.36B2.94B3.46B1.10B
Stockholders Equity1.68B1.88B614.24M466.59M432.44M1.32B
Cash Flow
Free Cash Flow0149.40M193.65M-451.39M-455.36M-159.02M
Operating Cash Flow0150.17M194.60M-386.99M-318.24M-788.00K
Investing Cash Flow0-28.52M4.83M-55.73M-262.96M-494.58M
Financing Cash Flow01.40B-344.24M237.69M162.82M496.55M

Neural Group Inc. Technical Analysis

Technical Analysis SentimentNegative
Last Price182.00

Price Trends

50DMA210.36Negative
100DMA212.32Negative
200DMA278.70Negative

Market Momentum

MACD-7.46Negative
RSI39.28Neutral
STOCH45.63Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4056, the sentiment is Negative. The current price of 182.00 is below the 20-day moving average (MA) of 191.60, below the 50-day MA of 210.36, and below the 200-day MA of 278.70, indicating a bearish trend. The MACD of -7.46 indicates Negative momentum. The RSI at 39.28 is Neutral, neither overbought nor oversold. The STOCH value of 45.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4056.

Neural Group Inc. Peers Comparison

Overall Rating

UnderperformOutperform
Sector (61)

Financial Indicators

JP:4056 against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
JP:3984JP:398480OutperformJPY 22.67B13.74―1.70%16.61%15.32%
JP:5574JP:557466NeutralJPY 22.68B20.73――27.68%126.99%
JP:6572JP:657265NeutralJPY 13.67B14.34―2.27%16.73%105.01%
Sector *61Neutral$37.18B12.37-10.20%1.83%8.50%-7.62%
JP:2158JP:215857NeutralJPY 28.61B47.02――27.44%131.69%
JP:4056JP:405643NeutralJPY 3.13B-7.54――-6.88%-929.79%

* Technology Sector Average

Performance Comparison

-60%-40%-20%0%JP:4056JP:2158JP:3984JP:5574JP:6572Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26
JP:4056 and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
JP:4056Neural Group Inc.182.00-364.00-66.67%
JP:2158FRONTEO, Inc.726.00-180.00-19.87%
JP:3984User Local, Inc.1410.00-524.58-27.12%
JP:5574ABEJA,Inc.2220.00-653.00-22.73%
JP:6572RPA Holdings, Inc.216.00-104.84-32.68%
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.

Date of analysis: Oct 03, 2026