Japan Business Systems, Inc. (5036) AI Stock Analysis

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Japan Business Systems, Inc.

(TSE/TYO:5036)

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Rating:63Neutral

Price Target:JPY 2,004.00▲(16.17% Upside)

Action:reiterated

Date:10/17/26

The overall score of 63 reflects a balance between strong technical momentum and attractive valuation against weak financial fundamentals. The stock's price is surging on positive technical signals and a low P/E ratio, but this is tempered by significant risks: persistent negative free cash flow, low profitability margins, and decelerating revenue growth. The elevated leverage and overbought technical indicators add further caution.

Positive Factors

Strong Revenue GrowthRevenue growth of 24.89% indicates strong demand for the company’s enterprise cloud and IT infrastructure services. Sustained expansion can enlarge its customer base, increase operating scale, and create a durable foundation for continued investment in delivery capabilities.

Negative Factors

Weak Cash GenerationWeak free cash flow conversion means reported earnings are not translating fully into cash available for investment, debt reduction, or shareholder returns. Unless generation improves, growth may require greater reliance on external financing and could place pressure on capital allocation.

Japan Business Systems, Inc. (5036) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 78.18B
Dividend Yield: 2.90%
Average Volume (3M): 124.73K
Price to Earnings (P/E): 11.0
Beta (1Y): 0.79
Revenue Growth: 26.65%
EPS Growth: 25.67%
Country: Japan
Employees: 2,839
Sector: Technology
Sector Strength: 61
Industry: Software - Infrastructure

Japan Business Systems, Inc. Business Overview & Revenue Model

Company Description

Founded in Tokyo in 1990, Japan Business Systems, Inc. (JBS) specializes in delivering comprehensive cloud integration and associated services. The company's operations are divided into three core segments: Cloud Integration, Cloud Services, and Lice...

How the Company Makes Money

Japan Business Systems generates revenue primarily by providing IT services to corporate customers across the lifecycle of IT environments. Key revenue streams typically include: (1) system integration and project-based services, where the company is...

Japan Business Systems, Inc. Financial Statement Overview

Summary

Mixed financial health: Strong ROE (20.7%) is offset by low margins (10.4% gross, 3.3% net), persistent negative free cash flow (¥-3.3B), and weak cash conversion. Revenue growth decelerated to 3.5%.

Income Statement

40Negative

Balance Sheet

65Positive

Cash Flow

35Negative

Financial statement breakdown
Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	208.34B	172.58B	140.86B	112.80B	86.33B	74.95B
Gross Profit	19.98B	17.86B	14.57B	13.08B	10.78B	8.40B
EBITDA	10.23B	8.69B	3.98B	5.15B	4.80B	2.96B
Net Income	7.06B	5.63B	1.51B	3.35B	2.65B	1.56B
Balance Sheet
Total Assets	101.62B	75.16B	61.62B	49.87B	38.85B	29.54B
Cash, Cash Equivalents and Short-Term Investments	5.23B	2.94B	3.37B	5.34B	7.57B	4.01B
Total Debt	26.02B	23.78B	19.71B	13.22B	6.46B	5.71B
Total Liabilities	72.79B	47.91B	38.88B	27.65B	19.14B	16.20B
Stockholders Equity	28.68B	27.14B	22.73B	22.22B	19.71B	13.34B
Cash Flow
Free Cash Flow	-3.32B	-3.32B	-7.85B	-4.73B	711.00M	945.00M
Operating Cash Flow	1.14B	1.14B	-320.00M	-206.00M	3.47B	1.96B
Investing Cash Flow	-4.74B	-4.74B	-7.66B	-7.04B	-3.97B	-894.00M
Financing Cash Flow	3.13B	3.13B	6.05B	4.99B	4.01B	-1.08B

Japan Business Systems, Inc. Technical Analysis

Technical Analysis SentimentPositive

Last Price1725.00

Price Trends

50DMA1657.83Positive

100DMA1588.16Positive

200DMA1575.48Positive

Market Momentum

MACD18.26Positive

RSI50.85Neutral

STOCH36.44Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5036, the sentiment is Positive. The current price of 1725.00 is below the 20-day moving average (MA) of 1811.25, above the 50-day MA of 1657.83, and above the 200-day MA of 1575.48, indicating a neutral trend. The MACD of 18.26 indicates Positive momentum. The RSI at 50.85 is Neutral, neither overbought nor oversold. The STOCH value of 36.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5036.

Japan Business Systems, Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

JP:5036 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:3915	86Outperform	JPY 28.02B	13.29	―	0.76%	19.19%	93.45%
JP:4475	83Outperform	JPY 86.86B	41.89	―	0.46%	17.01%	34.74%
JP:3741	79Outperform	JPY 28.90B	12.21	―	2.21%	3.67%	17.00%
JP:4434	71Outperform	JPY 24.37B	19.53	―	1.39%	23.79%	―
JP:3850	66Neutral	JPY 16.18B	15.11	―	1.98%	23.85%	56.39%
JP:5036	63Neutral	JPY 79.83B	11.05	―	2.90%	26.65%	25.67%
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

* Technology Sector Average

Performance Comparison

JP:5036 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:5036	Japan Business Systems, Inc.	1725.00	348.65	25.33%
JP:3741	Systems Engineering Consultants Co., Ltd.	2720.00	190.49	7.53%
JP:3850	NTT Data Intramart Corporation	3315.00	-618.29	-15.72%
JP:3915	TerraSky Co., Ltd.	2106.00	30.39	1.46%
JP:4434	Serverworks Co., Ltd.	2882.00	1154.46	66.83%
JP:4475	HENNGE K.K.	2391.00	1092.35	84.11%

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 17, 2026

Japan Business Systems, Inc. AI Stock Analysis