Nihon Knowledge Co. Ltd. (5252) AI Stock Analysis

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Nihon Knowledge Co. Ltd.

(TSE/TYO:5252)

Select Model

Rating:50Neutral

Price Target:JPY 868.00▼(-13.20% Downside)

Action:reiterated

Date:11/06/26

The overall score is constrained by significant financial weaknesses, primarily the sharp decline in profitability and weak cash flow generation, which are the most impactful factors. The stock's bearish technical posture, trading below all major moving averages, further pressures the score. A solid balance sheet and a modest dividend yield provide some support but are insufficient to offset the core operational challenges.

Positive Factors

Steady Revenue GrowthA sustained revenue expansion trend indicates continued demand for the company’s software testing, quality assurance, and related support services. Even as growth moderated recently, ongoing top-line increases provide a durable base for utilization, client retention, and future operating leverage.

Negative Factors

Profitability DeteriorationThe sharp decline in net income and operating profit shows that revenue growth has not translated consistently into earnings. Unless profitability recovers, weaker earnings power can limit internal funding, reduce returns on the expanding asset base, and make results more sensitive to execution or cost pressures.

Nihon Knowledge Co. Ltd. (5252) vs. iShares MSCI Japan ETF (EWJ)

Market Cap: JPY 4.06B
Dividend Yield: 1.07%
Average Volume (3M): 25.47K
Price to Earnings (P/E): 38.1
Beta (1Y): 0.63
Revenue Growth: 11.29%
EPS Growth: -4.15%
Country: Japan
Employees: 377
Sector: General
Sector Strength: 55
Industry: Software - Application

Nihon Knowledge Co. Ltd. Business Overview & Revenue Model

Company Description

Founded in 1985 and headquartered in Tokyo, Japan, Nihon Knowledge Co,Ltd. provides a range of technology services across the country. The company specializes in software system verification, custom system development, and comprehensive business syst...

How the Company Makes Money

The company primarily generates revenue by providing professional services to corporate customers, including contracted software testing/verification (QA) work and related engineering support delivered on a project or contract basis. Revenue is earne...

Nihon Knowledge Co. Ltd. Financial Statement Overview

Summary

Financial performance is mixed. The balance sheet is healthy with low leverage (D/E 0.33), but profitability has deteriorated sharply with EBIT margin falling to 1.4% and cash flow generation is weak, with declining operating cash flow and inconsistent free cash flow.

Income Statement

45Neutral

Balance Sheet

75Positive

Cash Flow

40Negative

Financial statement breakdown
Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	4.56B	4.56B	4.15B	4.08B	3.55B	3.23B
Gross Profit	728.89M	728.85M	704.49M	813.19M	689.05M	527.37M
EBITDA	120.34M	118.10M	162.04M	287.67M	212.77M	155.50M
Net Income	87.23M	86.50M	82.00M	202.15M	137.25M	94.28M
Balance Sheet
Total Assets	2.26B	2.26B	2.13B	2.13B	1.81B	1.32B
Cash, Cash Equivalents and Short-Term Investments	671.83M	671.83M	738.49M	848.67M	922.37M	508.15M
Total Debt	400.87M	400.87M	381.83M	340.10M	235.21M	298.04M
Total Liabilities	1.05B	1.05B	990.06M	1.04B	908.26M	799.40M
Stockholders Equity	1.21B	1.21B	1.14B	1.08B	898.72M	516.45M
Cash Flow
Free Cash Flow	0	39.93M	-112.13M	-167.06M	266.43M	-99.73M
Operating Cash Flow	0	56.75M	53.90M	127.94M	286.38M	-32.83M
Investing Cash Flow	0	-113.07M	-167.08M	-285.53M	-29.83M	-89.70M
Financing Cash Flow	0	-10.33M	2.99M	81.90M	159.66M	10.70M

Nihon Knowledge Co. Ltd. Technical Analysis

Technical Analysis SentimentPositive

Last Price1000.00

Price Trends

50DMA973.42Positive

100DMA878.23Positive

200DMA831.22Positive

Market Momentum

MACD-21.89Positive

RSI51.68Neutral

STOCH62.48Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:5252, the sentiment is Positive. The current price of 1000.00 is below the 20-day moving average (MA) of 1015.55, above the 50-day MA of 973.42, and above the 200-day MA of 831.22, indicating a neutral trend. The MACD of -21.89 indicates Positive momentum. The RSI at 51.68 is Neutral, neither overbought nor oversold. The STOCH value of 62.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:5252.

Nihon Knowledge Co. Ltd. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (55)

Financial Indicators

JP:5252 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JP:4475	83Outperform	JPY 81.23B	41.66	―	0.46%	17.01%	34.74%
JP:4430	74Outperform	JPY 8.16B	8.47	―	3.85%	9.66%	6.85%
JP:4811	73Outperform	JPY 10.24B	15.49	―	2.26%	7.28%	-14.91%
JP:4434	71Outperform	JPY 22.95B	20.67	―	1.31%	23.79%	―
JP:3850	66Neutral	JPY 16.06B	14.79	―	1.99%	23.85%	56.39%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
JP:5252	50Neutral	JPY 4.85B	38.12	―	1.07%	11.29%	-4.15%

* General Sector Average

Performance Comparison

JP:5252 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
JP:5252	Nihon Knowledge Co. Ltd.	1000.00	500.56	100.22%
JP:3850	NTT Data Intramart Corporation	3245.00	-762.04	-19.02%
JP:4430	TOKAI SOFT CO.,LTD.	1688.00	60.35	3.71%
JP:4434	Serverworks Co., Ltd.	3050.00	1276.38	71.96%
JP:4475	HENNGE K.K.	2378.00	1039.55	77.67%
JP:4811	DreamArts Corp.	885.00	-377.59	-29.91%

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 06, 2026

Nihon Knowledge Co. Ltd. AI Stock Analysis