The average target price of 4488.T is 3100 and suggests 1% upside potential. Usually, this means a HOLD recommendation among investment firms. This neutral recommendation suggests no significant price movement, up or down, in the next 12 months. The most optimistic analyst has a target price of 3100.0. This translates into 1% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 3100.0. This suggests 1% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

AI inside Inc. provides OCR-services using artificial intelligence-technology in Japan. It offers DX suite, an AI OCR platform. The company was founded in 2015 and is based in Tokyo, japan.

Japan

AI inside Inc.

Technology

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

4488.T reported revenue of JPY 4 327mn in the last 12 months, up 5% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 69% from FY23 to JPY 40.68. Market expects EPS to reach JPY 164.90 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 11ppts and its growth accelerated by 0ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 19.0% in the last 12 months, a decline from 25.3% in FY23. 

Historically, 4488.T has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 3.7%, down from 12.5% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 3.2%, below the peers. The consensus estimate for FY24 for RoCE is -15.5%, again behind the peers. 

AI inside Inc. reported a return on equity (RoE) of 3.2% in the last 12 months, down from 11.2% in FY23. The market consensus projects an RoE of -14.8% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to 2.2% in the last 12 months, a decrease from 7.6% in FY23. The market analysts predict that RoA will be -10.2% in FY24, again weaker than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.6 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

4488.T has very poor trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity is relatively stable and remains favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, and poor working capital management.

In highly turbulent market conditions, 4488.T is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, 4488.T is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Considering past and projected metrics, the stock is 'expensive' compared to its peers. In particular, the stock is overpriced on P/E, of fair value on EV/EBITDA, overvalued on P/FCF. 

AI inside Inc.

¥ 3015

2

AI inside Inc.

¥ 3015

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

¥ 3015

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