Koei Tecmo Holdings Co., Ltd. (3635) AI Stock Analysis

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Koei Tecmo Holdings Co., Ltd.

(TSE/TYO:3635)

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Rating:78Outperform

Price Target:JPY 1,884.00▲(3.60% Upside)

Action:reiterated

Date:10/30/26

The score is anchored by strong financial performance—especially high profitability and an exceptionally low-debt balance sheet—tempered by the latest-year free cash flow drop that reduces confidence in near-term cash consistency. Valuation is supportive with a low P/E and ~4% dividend yield, while technical signals are mostly neutral and do not add meaningful momentum tailwinds.

Positive Factors

High ProfitabilityExceptional gross and net margins indicate strong monetization of the company’s game portfolio and intellectual property. This profitability provides capacity to fund development, marketing, and content investment internally, while giving earnings greater resilience than a low-margin entertainment model.

Negative Factors

Free Cash Flow DeclineThe sharp reduction in free cash flow weakens confidence that reported profits are converting consistently into cash in the near term. If sustained, lower cash generation could constrain reinvestment, distributions, or acquisition flexibility even though operating cash flow remains positive.

Koei Tecmo Holdings Co., Ltd. (3635) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 609.31B
Dividend Yield: 3.63%
Average Volume (3M): 1.10M
Price to Earnings (P/E): 12.6
Beta (1Y): 0.04
Revenue Growth: 19.23%
EPS Growth: 29.13%
Country: Japan
Employees: 2,835
Sector: Communication Services
Sector Strength: 60
Industry: Electronic Gaming & Multimedia

Koei Tecmo Holdings Co., Ltd. Business Overview & Revenue Model

Company Description

Koei Tecmo Holdings Co., Ltd., along with its various subsidiaries, operates as a global entertainment enterprise with a presence in Japan, North America, Europe, the wider Asian region, and other international markets. The company's operations are o...

How the Company Makes Money

Koei Tecmo Holdings makes money primarily by monetizing game software and related intellectual property through several complementary revenue streams. (1) Game sales (consumer/console/PC): The company earns revenue from the sale of packaged and digit...

Koei Tecmo Holdings Co., Ltd. Financial Statement Overview

Summary

Strong overall fundamentals driven by premium profitability (high gross and net margins) and an exceptionally conservative balance sheet with minimal debt. The key offset is the sharp latest-year decline in free cash flow versus prior years, raising a near-term cash-conversion/quality-of-earnings concern.

Income Statement

88Very Positive

Balance Sheet

93Very Positive

Cash Flow

66Positive

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	90.96B	88.39B	83.15B	84.58B	78.42B	72.76B
Gross Profit	58.75B	57.06B	62.77B	55.30B	57.10B	50.60B
EBITDA	55.72B	59.00B	51.90B	47.14B	41.61B	50.19B
Net Income	48.11B	42.83B	37.63B	33.79B	30.93B	35.36B
Balance Sheet
Total Assets	333.92B	313.66B	209.83B	245.80B	210.89B	219.80B
Cash, Cash Equivalents and Short-Term Investments	116.19B	115.16B	44.49B	70.09B	20.61B	45.42B
Total Debt	10.78B	0	467.00M	46.91B	47.52B	48.31B
Total Liabilities	53.96B	41.12B	20.41B	70.25B	68.20B	81.70B
Stockholders Equity	279.96B	272.54B	189.42B	175.55B	142.68B	138.10B
Cash Flow
Free Cash Flow	0	8.99B	32.82B	34.81B	28.86B	23.52B
Operating Cash Flow	0	33.01B	34.37B	36.60B	29.69B	24.82B
Investing Cash Flow	0	-12.08B	40.97B	-24.86B	-21.39B	-13.17B
Financing Cash Flow	0	12.87B	-63.17B	-15.47B	-16.59B	-4.56B

Koei Tecmo Holdings Co., Ltd. Technical Analysis

Technical Analysis SentimentPositive

Last Price1818.50

Price Trends

50DMA1688.46Positive

100DMA1633.46Positive

200DMA1629.32Positive

Market Momentum

MACD39.88Negative

RSI60.64Neutral

STOCH81.38Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3635, the sentiment is Positive. The current price of 1818.50 is above the 20-day moving average (MA) of 1724.57, above the 50-day MA of 1688.46, and above the 200-day MA of 1629.32, indicating a bullish trend. The MACD of 39.88 indicates Negative momentum. The RSI at 60.64 is Neutral, neither overbought nor oversold. The STOCH value of 81.38 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3635.

Koei Tecmo Holdings Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

JP:3635 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:9766	83Outperform	JPY 3.93T	29.00	23.05%	0.89%	24.75%	56.61%
JP:7974	82Outperform	JPY 9.74T	21.96	15.08%	2.64%	25.17%	21.53%
JP:3635	78Outperform	JPY 608.98B	12.64	―	3.63%	19.23%	29.13%
JP:9697	75Outperform	JPY 1.85T	26.11	25.41%	1.09%	20.96%	15.58%
JP:9684	66Neutral	JPY 1.16T	32.15	11.04%	1.36%	8.69%	111.67%
Sector *	60Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
JP:6460	55Neutral	JPY 691.78B	256.70	0.68%	1.65%	19.27%	-81.25%

* Communication Services Sector Average

Performance Comparison

JP:3635 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:3635	Koei Tecmo Holdings Co., Ltd.	1818.50	-252.49	-12.19%
JP:9766	KONAMI HOLDINGS	28150.00	4508.72	19.07%
JP:9697	Capcom Co	4389.00	577.42	15.15%
JP:7974	Nintendo Co	8371.00	-4957.80	-37.20%
JP:6460	Sega Sammy Holdings	3337.00	886.04	36.15%
JP:9684	Square Enix Holdings Co	3168.00	136.96	4.52%

Koei Tecmo Holdings Co., Ltd. Corporate Events

Koei Tecmo Raises Earnings Outlook and Year-End Dividend Forecast

Oct 26, 2026

Koei Tecmo has revised its consolidated earnings forecast for the fiscal year ending March 31, 2027, raising expected net sales to 91 billion yen and profit attributable to owners of the parent to 37 billion yen. The upgrade follows interim results t...

Koei Tecmo Delivers Strong Interim Earnings but Trims Full-Year Outlook and Dividend

Oct 26, 2026

Koei Tecmo reported robust results for the six months ended Sept. 30, 2026, with net sales rising 19.4% year on year to ¥37.3 billion and profit attributable to owners of parent jumping 38.1% to ¥18.6 billion, lifting basic earnings per share to ¥55....

Koei Tecmo sharply lifts interim earnings forecast on strong game sales

Oct 19, 2026

Koei Tecmo Holdings Co., Ltd., a Japanese video game publisher and developer listed on the TSE Prime Market, derives revenue from major game releases and a robust back catalog while also generating income from financial asset management. This blend o...

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 30, 2026

Koei Tecmo Holdings Co., Ltd. AI Stock Analysis