and factory, inc. (7035) AI Stock Analysis

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and factory, inc.

(TSE/TYO:7035)

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Rating:47Neutral

Price Target:JPY 217.00▲(16.04% Upside)

Action:reiterated

Date:10/16/26

The overall score reflects significant fundamental and technical weaknesses, primarily driven by a negative P/E ratio, poor price momentum, and persistent operational cash burn. While management has successfully deleveraged the balance sheet to mitigate immediate financial risk, the lack of top-line growth and clear path to sustainable, robust profitability severely caps the stock's near-term upside.

Positive Factors

Lower LeverageThe substantial reduction in debt-to-equity improves financial resilience and gives the company more flexibility to manage operations, invest in its business, and withstand weaker periods. Stable equity alongside lower leverage also reduces balance-sheet pressure compared with prior years.

Negative Factors

Negative Cash GenerationPersistently negative operating and free cash flow weakens the company’s ability to fund expansion internally and may require tighter spending or external financing. The recent cash shortfall is especially concerning because it followed a strong 2024 rather than representing consistent cash generation.

and factory, inc. (7035) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 2.11B
Dividend Yield: ―
Average Volume (3M): 203.22K
Price to Earnings (P/E): 301.6
Beta (1Y): 0.69
Revenue Growth: -2.21%
EPS Growth: ―
Country: Japan
Employees: 131
Sector: Technology
Sector Strength: 61
Industry: Software - Application

and factory, inc. Business Overview & Revenue Model

Company Description

and factory,inc. engages in the development and operation of smartphone apps. The company operates through APP Business and RET Business segments. The APP Business segment is involved in the development and operation of apps; sale of mobile ad space...

and factory, inc. Financial Statement Overview

Summary

A mixed financial profile anchored by a highly conservative balance sheet with low debt-to-equity. However, operational metrics remain weak, evidenced by negative operating and free cash flows, stagnant revenue, and razor-thin margins despite a recent turnaround to slight profitability.

Income Statement

45Neutral

Balance Sheet

75Positive

Cash Flow

40Negative

Financial statement breakdown
Breakdown	TTM	Aug 2026	Aug 2025	Aug 2024	Aug 2023	Aug 2022
Income Statement
Total Revenue	3.14B	3.14B	3.21B	5.02B	2.98B	2.83B
Gross Profit	1.51B	1.51B	1.39B	1.38B	1.75B	1.62B
EBITDA	39.00M	30.00M	-273.15M	202.47M	167.25M	-248.65M
Net Income	8.00M	7.00M	-326.08M	88.94M	79.67M	-350.38M
Balance Sheet
Total Assets	1.87B	1.87B	2.02B	2.63B	5.28B	4.86B
Cash, Cash Equivalents and Short-Term Investments	721.00M	721.00M	860.67M	1.56B	925.36M	479.13M
Total Debt	300.00M	300.00M	357.06M	455.92M	3.31B	3.42B
Total Liabilities	966.00M	966.00M	1.13B	1.42B	4.15B	4.31B
Stockholders Equity	906.00M	906.00M	891.41M	1.21B	1.12B	541.00M
Cash Flow
Free Cash Flow	0	-59.00M	-460.24M	1.82B	-80.78M	-44.03M
Operating Cash Flow	0	-53.00M	-428.88M	1.83B	-71.01M	-32.06M
Investing Cash Flow	0	-30.00M	-122.41M	1.66B	131.67M	69.40M
Financing Cash Flow	0	-56.00M	-151.90M	-2.85B	385.57M	-332.94M

and factory, inc. Technical Analysis

Technical Analysis SentimentNegative

Last Price187.00

Price Trends

50DMA211.90Negative

100DMA231.23Negative

200DMA227.00Negative

Market Momentum

MACD-8.62Negative

RSI35.00Neutral

STOCH47.78Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7035, the sentiment is Negative. The current price of 187.00 is below the 20-day moving average (MA) of 192.75, below the 50-day MA of 211.90, and below the 200-day MA of 227.00, indicating a bearish trend. The MACD of -8.62 indicates Negative momentum. The RSI at 35.00 is Neutral, neither overbought nor oversold. The STOCH value of 47.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7035.

and factory, inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:7035 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4477	73Outperform	JPY 35.74B	16.25	―	1.56%	36.14%	304.76%
JP:3905	65Neutral	JPY 51.14B	4.97	―	―	1178.31%	―
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
JP:5027	59Neutral	JPY 44.56B	34.26	―	0.28%	28.94%	-29.21%
JP:9553	58Neutral	JPY 16.06B	22.46	―	―	30.51%	290.91%
JP:6047	55Neutral	JPY 6.22B	-250.00	―	6.02%	-0.10%	-110.45%
JP:7035	47Neutral	JPY 2.12B	301.61	―	―	-2.21%	―

* Technology Sector Average

Performance Comparison

JP:7035 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:7035	and factory, inc.	187.00	-20.00	-9.66%
JP:3905	Datasection, Inc.	1215.00	-1125.00	-48.08%
JP:4477	BASE, Inc.	321.00	-10.93	-3.29%
JP:5027	AnyMind Group Inc.	717.00	46.13	6.88%
JP:6047	Gunosy, Inc.	300.00	-247.61	-45.22%
JP:9553	MicroAd, Inc.	564.00	-12.00	-2.08%

and factory, inc. Corporate Events

And factory returns to profit but flags operating loss forecast for 2027

Oct 15, 2026

And factory, Inc. reported consolidated net sales of ¥3,138 million for the fiscal year ended August 31, 2026, a slight 2.2% decline year-on-year, but swung from a large loss to a small profit with operating and ordinary profit of ¥6 million and prof...

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 16, 2026

and factory, inc. AI Stock Analysis