CRI Middleware Co., Ltd. (3698) AI Stock Analysis

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CRI Middleware Co., Ltd.

(TSE/TYO:3698)

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Rating:70Outperform

Price Target:JPY 1,217.00▲(13.95% Upside)

Action:reiterated

Date:11/11/26

The overall stock score of 70 is driven primarily by the company's exceptional balance sheet stability and attractive valuation, though weighed down by near-term technical weakness. The complete elimination of debt provides outstanding financial flexibility, complementing a favorable P/E ratio of 14.6 and a 2.44% dividend yield. Despite consistent revenue growth, recent cash flow volatility poses a minor fundamental headwind. Technically, the stock faces bearish short-term momentum as it trades below key near-term moving averages, though heavily oversold RSI conditions suggest a potential turnaround opportunity.

Positive Factors

Revenue and Profit RecoveryRevenue growth across 2023–2026, alongside a material recovery from the 2022 loss, indicates that the business has rebuilt earnings power rather than relying only on a single reporting period. Continued sales expansion supports product development and customer adoption.

Negative Factors

Cash-Flow VolatilityThe sharp 2026 decline in operating and free cash flow weakens cash conversion and makes internally funded reinvestment less predictable. Even with positive free cash flow, sustained volatility could complicate product investment, working-capital management, and the quality of reported earnings.

CRI Middleware Co., Ltd. (3698) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 5.61B
Dividend Yield: 2.53%
Average Volume (3M): 6,391
Price to Earnings (P/E): 14.9
Beta (1Y): 0.79
Revenue Growth: 4.19%
EPS Growth: -10.87%
Country: Japan
Employees: 173
Sector: Communication Services
Sector Strength: 60
Industry: Electronic Gaming & Multimedia

CRI Middleware Co., Ltd. Business Overview & Revenue Model

Company Description

CRI Middleware Co., Ltd., established in Tokyo, Japan in 1983, specializes in delivering advanced audio and video technology solutions to the gaming sector. The company's key offerings include ADX, an audio middleware designed to empower sound design...

How the Company Makes Money

CRI Middleware primarily makes money by licensing its proprietary middleware to customers (notably game developers/publishers and other companies that need embedded audio/video playback and related functionality). Key revenue streams typically includ...

CRI Middleware Co., Ltd. Financial Statement Overview

Summary

The company exhibits a fundamentally sound financial profile anchored by a pristine, zero-debt balance sheet and consistent top-line growth. While profitability remains stable overall, the score is slightly tempered by recent volatility in free cash flow generation and a mild dip in net earnings.

Income Statement

78Positive

Balance Sheet

92Very Positive

Cash Flow

60Neutral

Financial statement breakdown
Breakdown	TTM	Sep 2026	Sep 2025	Sep 2024	Sep 2023	Sep 2022
Income Statement
Total Revenue	3.59B	3.59B	3.45B	3.17B	2.99B	2.84B
Gross Profit	2.24B	2.24B	2.07B	1.72B	1.73B	1.35B
EBITDA	558.93M	558.93M	683.21M	522.10M	477.65M	235.87M
Net Income	375.03M	375.03M	420.71M	304.47M	232.58M	-339.60M
Balance Sheet
Total Assets	4.79B	4.79B	5.84B	5.36B	5.16B	5.02B
Cash, Cash Equivalents and Short-Term Investments	3.18B	3.18B	4.24B	3.63B	3.49B	3.32B
Total Debt	0	0	1.00B	1.00B	1.00B	1.00B
Total Liabilities	496.23M	496.23M	1.74B	1.59B	1.61B	1.48B
Stockholders Equity	4.25B	4.25B	4.06B	3.74B	3.52B	3.51B
Cash Flow
Free Cash Flow	0	230.67M	831.41M	292.67M	483.39M	-64.67M
Operating Cash Flow	0	253.61M	849.68M	328.33M	495.42M	23.32M
Investing Cash Flow	0	-126.06M	-135.08M	-9.12M	-209.43M	-527.02M
Financing Cash Flow	0	-1.20B	-104.50M	-77.87M	-215.38M	-97.01M

CRI Middleware Co., Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price1068.00

Price Trends

50DMA1199.88Negative

100DMA1182.18Negative

200DMA1089.11Negative

Market Momentum

MACD-31.56Positive

RSI31.97Neutral

STOCH39.16Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3698, the sentiment is Negative. The current price of 1068.00 is below the 20-day moving average (MA) of 1184.60, below the 50-day MA of 1199.88, and below the 200-day MA of 1089.11, indicating a bearish trend. The MACD of -31.56 indicates Positive momentum. The RSI at 31.97 is Neutral, neither overbought nor oversold. The STOCH value of 39.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3698.

CRI Middleware Co., Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

JP:3698 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:3698	70Outperform	JPY 5.86B	14.88	―	2.53%	4.19%	-10.87%
JP:3793	68Neutral	JPY 13.27B	4.24	―	―	4.52%	―
JP:4728	67Neutral	JPY 4.71B	6.59	―	4.01%	-4.82%	186.71%
Sector *	60Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
JP:3904	56Neutral	JPY 6.28B	11.45	―	1.00%	20.33%	15.26%
JP:3907	50Neutral	JPY 3.08B	-12.36	―	0.92%	-6.31%	-176.88%
JP:5240	39Underperform	JPY 1.72B	-3.10	―	―	-53.59%	-71.56%

* Communication Services Sector Average

Performance Comparison

JP:3698 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:3698	CRI Middleware Co., Ltd.	1068.00	40.36	3.93%
JP:3793	Drecom Co., Ltd.	453.00	3.00	0.67%
JP:3904	KAYAC, Inc.	393.00	-90.30	-18.68%
JP:3907	Silicon Studio Corp.	1085.00	274.14	33.81%
JP:4728	Tose Co., Ltd.	624.00	16.88	2.78%
JP:5240	monoAI technology Co.,Ltd.	138.00	-56.00	-28.87%

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: Nov 11, 2026

CRI Middleware Co., Ltd. AI Stock Analysis