Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

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<li>
<a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">Freee KK (4478 JP)</a> offers cloud-based online accounting and HR/Payroll software to small and medium businesses (SMBs) in Japan. The company operates a subscription-based revenue model.</li>
<li>Freee reported its first-ever profits recently and we expect continued improvement in freee’s profitability driven by its strong business model vs MF whose business model has started to breakdown.</li>
<li>Freee’s current valuation multiples are cheap and there is significant upside to the current share price, hence we recommend making an entry.</li>
</ul>



Freee KK (4478 JP) offers cloud-based online accounting and HR/Payroll software to small and medium businesses (SMBs) in Japan. The company operates a subscription-based revenue model.
Freee reported its first-ever profits recently and we expect continued improvement in freee’s profitability driven by its strong business model vs MF whose business model has started to breakdown.
Freee’s current valuation multiples are cheap and there is significant upside to the current share price, hence we recommend making an entry.


2025 High Conviction: Freee KK – Becoming Free From Losses; Significant Upside

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<li>
<a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">Freee KK (4478 JP)</a> reported 1QFY06/2025 results which saw the company generating its first-ever Adj. operating profit, earlier than we expected.</li>
<li>The company has begun capitalising its software assets (decline in R&amp;D costs as % of revenue) and this coupled with fall in S&amp;M costs have contributed to profits.</li>
<li>The corporate paying customers surpassed more than 200k for the first time and we expect freee’s earnings to continue to improve going forward.</li>
</ul>



Freee KK (4478 JP) reported 1QFY06/2025 results which saw the company generating its first-ever Adj. operating profit, earlier than we expected.
The company has begun capitalising its software assets (decline in R&amp;D costs as % of revenue) and this coupled with fall in S&amp;M costs have contributed to profits.
The corporate paying customers surpassed more than 200k for the first time and we expect freee’s earnings to continue to improve going forward.


Freee 1Q: Turns Profitable Sooner Than We Expected

Japan Specialist

Mark Chadwick

<ul>
<li>In Q3, Money Forward demonstrated continued strong performance, with consolidated net sales posting 31% growth year-on-year to ¥9.81 billion</li>
<li>EBITDA for the cumulative nine months stands at ¥1.48 billion, comfortably within the company’s full year guidance range of ¥1-3 billion.</li>
<li>We now see a very modest 2% upside to our target price of ¥6,440, based on an 8x forward revenue multiple. </li>
</ul>


In Q3, Money Forward demonstrated continued strong performance, with consolidated net sales posting 31% growth year-on-year to ¥9.81 billion
EBITDA for the cumulative nine months stands at ¥1.48 billion, comfortably within the company’s full year guidance range of ¥1-3 billion.
We now see a very modest 2% upside to our target price of ¥6,440, based on an 8x forward revenue multiple. 


Money Forward (3994) | Q3 Priced In; Look for Pull-Back

<ul>
<li>With results due October 15, we expect net sales growth of 29% YoY, bringing 9-month revenue on track to meet full-year guidance.</li>
<li>Money Forward’s businesses are Japan-centric, creating a steady revenue stream insulated from yen volatility and uncertain global macro conditions.</li>
<li>By targeting larger corporations, Money Forward aims to unlock substantial cross-selling potential, supporting long-term growth and market penetration.</li>
</ul>


With results due October 15, we expect net sales growth of 29% YoY, bringing 9-month revenue on track to meet full-year guidance.
Money Forward’s businesses are Japan-centric, creating a steady revenue stream insulated from yen volatility and uncertain global macro conditions.
By targeting larger corporations, Money Forward aims to unlock substantial cross-selling potential, supporting long-term growth and market penetration.


Money Forward (3994) | Q3 Results and Strategic Expansion Fueling Long-Term Upside

<ul>
<li>
<a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">Freee KK (4478 JP)</a> reported 4QFY06/2024 and full-year results today. Earnings were in line with guidance, but operating losses have declined significantly beating consensus by a huge margin.</li>
<li>The company has issued guidance which calls for a break-even or an adj. OPM of 3% for FY06/2025E suggesting freee’s investments in marketing and client acquisition have finally paid off.</li>
<li>Freee’s share price has moved up slightly during the last few weeks, but still trading at a discount to its own multiples and at a steep discount to Money Forward.</li>
</ul>



Freee KK (4478 JP) reported 4QFY06/2024 and full-year results today. Earnings were in line with guidance, but operating losses have declined significantly beating consensus by a huge margin.
The company has issued guidance which calls for a break-even or an adj. OPM of 3% for FY06/2025E suggesting freee’s investments in marketing and client acquisition have finally paid off.
Freee’s share price has moved up slightly during the last few weeks, but still trading at a discount to its own multiples and at a steep discount to Money Forward.


Freee 4Q: Significant Decline in Losses; Soon to Turn Profitable

Japan

Money Forward, Inc. develops mobile application software. The Company produces automatic household account book softwares, household account book application softwares, and other products. Money Forward also provides personal financial management, cloud based accounting solutions, and other services.

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Money Forward (3994 JP)

2025 High Conviction: Freee KK – Becoming Free From Losses; Significant Upside

Freee has proved that its business model is solid vs Money Forward by beginning to make profits without compromising on growth. freee's shares are...

Shifara Samsudeen, FCMA, CGMA

Freee 1Q: Turns Profitable Sooner Than We Expected

The key highlight of freee's 1Q results was the first-ever Adj. operating profits for the company, earlier than we expected. The Corporate Paying...

Shifara Samsudeen, FCMA, CGMA

Money Forward (3994) | Q3 Priced In; Look for Pull-Back

Money Forward's Q3 performance shows strong growth with net sales up 31% year-on-year, EBITDA at ¥1.48 billion, and a 2% upside to target price of...

Mark Chadwick

Money Forward (3994) | Q3 Results and Strategic Expansion Fueling Long-Term Upside

Upcoming Q3 Results: With results due October 15, we expect net sales growth of 29% YoY, bringing 9-month revenue on track to meet full-year guidance.

Mark Chadwick

Freee 4Q: Significant Decline in Losses; Soon to Turn Profitable

Freee's 4Q losses declined significantly, which beat consensus by a wide margin. Guidance for FY06/2025E calls for operating profits as...

Shifara Samsudeen, FCMA, CGMA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

2025 High Conviction: Freee KK – Becoming Free From Losses; Significant Upside

Freee has proved that its business model is solid vs Money Forward by beginning to make profits without compromising on growth. freee's shares are...

Shifara Samsudeen, FCMA, CGMA

Freee 1Q: Turns Profitable Sooner Than We Expected

The key highlight of freee's 1Q results was the first-ever Adj. operating profits for the company, earlier than we expected. The Corporate Paying...

Shifara Samsudeen, FCMA, CGMA

Money Forward (3994) | Q3 Priced In; Look for Pull-Back

​Money Forward's Q3 performance shows strong growth with net sales up 31% year-on-year, EBITDA at ¥1.48 billion, and a 2% upside to target price of...

Mark Chadwick

Money Forward (3994) | Q3 Results and Strategic Expansion Fueling Long-Term Upside

Upcoming Q3 Results: With results due October 15, we expect net sales growth of 29% YoY, bringing 9-month revenue on track to meet full-year guidance.

Mark Chadwick

Freee 4Q: Significant Decline in Losses; Soon to Turn Profitable

​Freee's 4Q losses declined significantly, which beat consensus by a wide margin. Guidance for FY06/2025E calls for operating profits as...

Shifara Samsudeen, FCMA, CGMA

Money Forward's Q3 performance shows strong growth with net sales up 31% year-on-year, EBITDA at ¥1.48 billion, and a 2% upside to target price of...

Freee's 4Q losses declined significantly, which beat consensus by a wide margin. Guidance for FY06/2025E calls for operating profits as...