Nippon Ichi Software, Inc. (3851) AI Stock Analysis

• Market Cap: ¥4.38B
• Dividend Yield: 0.58%
• Average Volume (3M): 3.88K
• Price to Earnings (P/E): 41.9
• Beta (1Y): 0.31
• Revenue Growth: -5.41%
• EPS Growth: -151.67%
• Country: JP
• Employees: 185
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): -33.43
• Shares Outstanding: 5,151,100
• 10 Day Avg. Volume: 3,890
• 30 Day Avg. Volume: 3,880
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥900.00
• Price Target Upside: 3.93% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 58 Neutral
• Price Target: ¥900.00 ▲(3.93% Upside)

The overall stock score of 58 reflects the company's strong balance sheet but significant challenges in profitability and cash flow. Technical indicators provide a neutral outlook, while valuation metrics highlight concerns due to negative earnings. The absence of earnings call data and corporate events further limits the assessment.

Nippon Ichi Software, Inc. Business Overview & Revenue Model

Company Description

Nippon Ichi Software, Inc. develops and sells computer software in Japan, Asia, North America, Europe, and other countries. It operates through Entertainment Business, and Student Dormitories and Other Businesses segments. The company offers home video game software; and game content for mobile phones and smartphones. It also manages student dormitories. The company was founded in 1993 and is headquartered in Kakamigahara, Japan.

How the Company Makes Money

Nippon Ichi Software generates revenue primarily through the development and sale of video games. The company's core revenue streams include direct sales of physical and digital game copies through various retail and online platforms. Additionally, NIS leverages licensing agreements and partnerships with other gaming companies for distribution and co-development opportunities. The company also engages in merchandise sales, offering products related to its popular game franchises. Significant partnerships with platforms like PlayStation and Nintendo contribute to its earnings by ensuring widespread availability and promotion of its titles. Furthermore, international subsidiaries, such as NIS America, help expand its market reach and drive sales in overseas markets.

Nippon Ichi Software, Inc. Financial Statement Overview

Summary

Nippon Ichi Software, Inc. shows a strong balance sheet with low leverage and high equity ratios. However, it faces significant challenges in income generation and cash conversion, with declining revenues, negative net profit margin, and negative free cash flow growth.

Income Statement

The income statement reveals a mixed performance. The company experienced a revenue decline of approximately 0.75% from 2024 to 2025, following a drop in gross profit margin. Net profit margin turned negative due to a significant net loss in 2025, indicating challenges in maintaining profitability. However, EBIT and EBITDA margins have seen volatility, signaling inconsistent operational efficiency.

Balance Sheet

The balance sheet remains robust with a strong equity base, as seen in the consistently high equity ratio. Despite a relatively low debt-to-equity ratio, indicating prudent leverage management, the company has experienced a decline in stockholders' equity. Return on equity has also turned negative due to recent losses, suggesting pressure on shareholder value creation.

Cash Flow

Cash flow analysis shows a decline in operating and free cash flow from 2024 to 2025, with negative free cash flow growth. Although the company maintains a positive operating cash flow to net income ratio, the free cash flow to net income ratio is negative, reflecting difficulties in converting income to free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.30B	5.30B	5.34B	4.83B	5.72B	5.30B
Gross Profit	1.95B	1.95B	2.58B	2.74B	3.33B	2.89B
EBITDA	49.35M	49.05M	950.30M	1.05B	1.78B	1.31B
Net Income	-157.02M	-157.22M	593.40M	672.48M	1.27B	905.32M
Balance Sheet
Total Assets	11.15B	11.15B	10.82B	9.38B	8.23B	6.39B
Cash, Cash Equivalents and Short-Term Investments	5.94B	5.94B	5.36B	4.35B	4.77B	3.78B
Total Debt	1.67B	1.67B	1.17B	1.06B	769.67M	367.10M
Total Liabilities	3.29B	3.29B	2.73B	2.43B	2.09B	1.75B
Stockholders Equity	7.87B	7.87B	8.08B	6.95B	6.14B	4.64B
Cash Flow
Free Cash Flow	0.00	177.03M	358.53M	-188.74M	606.70M	1.42B
Operating Cash Flow	0.00	404.15M	794.38M	50.42M	1.19B	1.55B
Investing Cash Flow	0.00	-225.98M	-1.04B	-1.02B	-820.70M	552.41M
Financing Cash Flow	0.00	471.21M	78.71M	269.02M	343.30M	-83.00M

Nippon Ichi Software, Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 866.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3851, the sentiment is Neutral. The current price of 866 is below the 20-day moving average (MA) of 872.20, above the 50-day MA of 862.00, and above the 200-day MA of 839.07, indicating a neutral trend. The MACD of 1.44 indicates Positive momentum. The RSI at 47.87 is Neutral, neither overbought nor oversold. The STOCH value of 20.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3851.

Nippon Ichi Software, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3907	74 Outperform	2.76B	10.11	5.00%	―	1.02%	3129.12%
3723	68 Neutral	17.87B	27.13	0.00%	1.15%	1.15%	-8.55%
3851	58 Neutral	¥4.38B	41.88		0.58%	-5.41%	-151.67%
3758	54 Neutral	6.56B	-35.32	-8.81%	1.59%	-11.94%	37.14%
3911	54 Neutral	12.80B	9.00	-5.89%	―	4.13%	0.00%
3810	39 Underperform	7.85B	-2.92	-310.44%	―	-16.14%	12.49%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%