Goodpatch, Inc. (7351) AI Stock Analysis

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Goodpatch, Inc.

(TSE/TYO:7351)

Select Model

Rating:55Neutral

Price Target:JPY 473.00▲(13.16% Upside)

Action:downgraded

Date:10/16/26

The overall score is constrained by a significant divergence between reported profits and weak cash flow generation, which is a critical risk. While the company's balance sheet is a fortress and the valuation is undemanding, the bearish technical picture and poor earnings quality weigh heavily on the outlook.

Positive Factors

Conservative balance sheetVery low leverage gives Goodpatch financial flexibility to withstand weaker periods and continue investing in its digital product design capabilities. A predominantly equity-funded capital structure also limits interest burden and refinancing exposure, supporting resilience over the next several quarters.

Negative Factors

Material cash-flow deteriorationThe steep decline in operating and free cash flow weakens confidence that reported earnings consistently convert into usable cash. Although free cash flow remains positive, the deterioration can restrict internally funded investment and makes future cash generation more dependent on operating execution.

Goodpatch, Inc. (7351) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 3.66B
Dividend Yield: 2.39%
Average Volume (3M): 14.98K
Price to Earnings (P/E): 10.3
Beta (1Y): 0.50
Revenue Growth: 2.20%
EPS Growth: -12.53%
Country: Japan
Employees: 262
Sector: General
Sector Strength: 55
Industry: Information Technology Services

Goodpatch, Inc. Business Overview & Revenue Model

Company Description

Goodpatch, Inc. engages in the provision of UI/UX design consulting services. The company offers UI/UX design, business model design, brand experience design, organizational design, and software development services. It provides ReDesigner, a designe...

Goodpatch, Inc. Financial Statement Overview

Summary

The financial performance is mixed. A strong revenue recovery and an exceptionally solid, nearly debt-free balance sheet are offset by declining margins and a severe deterioration in cash flow conversion, which is a major risk.

Income Statement

58Neutral

Balance Sheet

82Very Positive

Cash Flow

35Negative

Financial statement breakdown
Breakdown	TTM	Aug 2026	Aug 2025	Aug 2024	Aug 2023	Aug 2022
Income Statement
Total Revenue	5.20B	5.20B	5.09B	3.94B	3.93B	3.72B
Gross Profit	2.93B	2.93B	2.94B	2.18B	2.27B	2.28B
EBITDA	579.92M	544.19M	708.33M	132.80M	433.21M	234.93M
Net Income	353.68M	353.68M	407.05M	11.53M	216.04M	72.54M
Balance Sheet
Total Assets	5.11B	5.11B	5.25B	4.68B	4.67B	4.17B
Cash, Cash Equivalents and Short-Term Investments	2.53B	2.53B	2.73B	3.28B	3.27B	2.91B
Total Debt	116.61M	116.61M	248.40M	401.26M	192.73M	361.46M
Total Liabilities	660.94M	660.94M	1.11B	804.63M	730.54M	963.29M
Stockholders Equity	4.45B	4.45B	4.15B	3.87B	3.94B	3.21B
Cash Flow
Free Cash Flow	0	140.91M	842.06M	-70.19M	76.55M	395.57M
Operating Cash Flow	0	182.88M	844.39M	-57.12M	78.67M	410.65M
Investing Cash Flow	0	-1.26B	-1.08B	-58.49M	-97.20M	-673.68M
Financing Cash Flow	0	-236.51M	-310.33M	116.90M	373.91M	389.55M

Goodpatch, Inc. Technical Analysis

Technical Analysis SentimentNegative

Last Price418.00

Price Trends

50DMA463.48Negative

100DMA452.35Negative

200DMA461.52Negative

Market Momentum

MACD-12.36Positive

RSI32.08Neutral

STOCH19.44Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7351, the sentiment is Negative. The current price of 418.00 is below the 20-day moving average (MA) of 446.15, below the 50-day MA of 463.48, and below the 200-day MA of 461.52, indicating a bearish trend. The MACD of -12.36 indicates Positive momentum. The RSI at 32.08 is Neutral, neither overbought nor oversold. The STOCH value of 19.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7351.

Goodpatch, Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:7351 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4431	83Outperform	JPY 70.23B	26.21	―	0.70%	20.70%	56.44%
JP:4686	77Outperform	JPY 299.93B	19.36	―	0.64%	5.45%	11.35%
JP:4811	73Outperform	JPY 10.48B	14.97	―	2.29%	7.28%	-14.91%
JP:3633	67Neutral	JPY 12.73B	7.71	―	2.78%	-3.72%	138.33%
JP:4784	64Neutral	JPY 123.22B	17.73	―	5.46%	80.85%	61.80%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:7351	55Neutral	JPY 3.84B	10.32	―	2.39%	2.20%	-12.53%

* General Sector Average

Performance Comparison

JP:7351 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:7351	Goodpatch, Inc.	418.00	-169.93	-28.90%
JP:3633	GMO Pepabo, Inc.	2324.00	196.23	9.22%
JP:4431	Smaregi, Inc.	3450.00	656.06	23.48%
JP:4686	Justsystems Corporation	4700.00	-460.10	-8.92%
JP:4784	GMO AD Partners Inc.	396.00	-395.64	-49.98%
JP:4811	DreamArts Corp.	855.00	-407.59	-32.28%

Goodpatch, Inc. Corporate Events

Goodpatch Nine-Month Profit Slips Despite Stable Sales and Strong Balance Sheet

Jul 23, 2026

Goodpatch Inc. reported consolidated net sales of ¥3,847 million for the nine months ended May 31, 2026, essentially flat year on year, while operating profit fell 35.2% to ¥329 million and profit attributable to owners of parent declined 21.9% to ¥2...

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

Goodpatch, Inc. AI Stock Analysis