NEC (6701) AI Stock Analysis

• Market Cap: $6.49T
• Dividend Yield: 0.55%
• Average Volume (3M): 4.22M
• Price to Earnings (P/E): 31.8
• Beta (1Y): 1.06
• Revenue Growth: 2.68%
• EPS Growth: 56.38%
• Country: JP
• Employees: 105,276
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): N/A
• Shares Outstanding: 1,364,249,300
• 10 Day Avg. Volume: 5,395,680
• 30 Day Avg. Volume: 4,216,096
• PEG Ratio: 1.40
• Price to Book (P/B): 2.15
• Price to Sales (P/S): 1.22
• P/FCF Ratio: 19.23
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 1.65
• Enterprise Value/Gross Profit: 5.23
• Enterprise Value/Ebitda: 12.70
• 1Y Price Target: $5,239.33
• Price Target Upside: -6.74% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 72 Outperform
• Price Target: ¥6,410.00 ▲(14.10% Upside)

NEC's strong financial performance is the primary driver of its overall score, supported by robust growth and profitability metrics. Technical analysis indicates a bullish trend, though caution is advised due to overbought signals. Valuation concerns arise from a high P/E ratio, suggesting potential overvaluation. The absence of earnings call and corporate events data limits additional insights.

NEC Business Overview & Revenue Model

Company Description

NEC Corporation operates as a provider of information and communication technology solutions in Japan and internationally. The company operates in five segments: Public Solutions, Public Infrastructure, Enterprise, Network Services, and Global. It provides systems integration services comprising systems implementation and consulting; maintenance and support services; outsourcing and cloud services; and system equipment. The company also offers network infrastructure products, including core network equipment, mobile phone base stations, optical transmission systems, and routers and switches; and services and management solutions, such as operation support system (OSS), business support system (BSS), and services. In addition, it provides safer city solutions, including public safety, digital government, and digital finance; software services for service providers, including OSS/BSS; network infrastructure comprising submarine systems and wireless backhaul; and system devices, such as display and projectors, and energy storage systems. Further, the company offers hardware products, such as servers, mainframes, supercomputers, storage products, business and personal computers, point-of-sale systems, automatic teller machines, control equipment, and wireless LAN routers; and software products, including integrated operation management, application servers, security, and database software. It serves public, healthcare, government and media, manufacturing, retail and services, telecommunications, and finance industries. NEC Corporation has collaboration with Analog Devices, Inc. to provide a 5G Network Massive MIMO Antenna Radio Unit for Rakuten Mobile. The company was formerly known as Nippon Electric Company, Limited and changed its name to NEC Corporation in April 1983. NEC Corporation was incorporated in 1899 and is headquartered in Tokyo, Japan.

How the Company Makes Money

NEC generates revenue through multiple streams, primarily from the sale of hardware, software, and integrated solutions in the IT and telecommunications sectors. Key revenue sources include network systems, which provide hardware and software for telecommunications operators, and public safety solutions that cater to government contracts. The company also earns income through systems integration, where it designs and implements complex IT systems for enterprises and public organizations. Significant partnerships with telecom operators and government agencies play a crucial role in securing large-scale contracts, contributing to NEC's earnings. Furthermore, the company's investments in R&D enable it to innovate and stay competitive, allowing for potential growth in emerging markets such as AI and cloud services.

NEC Financial Statement Overview

Summary

NEC demonstrates strong financial performance with robust profitability metrics and efficient operations. The company maintains a healthy balance sheet with moderate leverage and strong cash flow generation. However, recent revenue growth has slightly dipped, and increasing capital expenditures need monitoring.

Income Statement

NEC has shown robust performance with improving profitability metrics. The gross profit margin stands at 30.99% for the latest year, indicating efficient cost management. The net profit margin has increased to 5.12%, reflecting a solid bottom line. Revenue growth has been positive over the years, although there was a slight dip in the latest year. Both EBIT and EBITDA margins indicate strong operational efficiency, with an EBIT margin of 8.27% and an EBITDA margin of 12.41%.

Balance Sheet

The balance sheet of NEC shows a healthy equity base with a debt-to-equity ratio of 0.34, suggesting moderate leverage. The return on equity is 8.97%, demonstrating effective use of equity financing. With an equity ratio of 45.23%, the company maintains a balanced capital structure. However, the increase in total debt over the years warrants cautious monitoring.

Cash Flow

NEC's cash flow statement reflects strong cash generation capabilities. The free cash flow has grown consistently, with a free cash flow to net income ratio of 1.24, highlighting robust cash earnings relative to net income. The operating cash flow to net income ratio of 1.97 further underscores healthy cash conversion from operations. The trajectory of free cash flow growth is positive, though capital expenditures have increased, which may impact future free cash flow if not managed.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.45T	3.42T	3.48T	3.31T	3.01T	2.99T
Gross Profit	1.09T	1.06T	1.01T	958.25B	886.41B	861.18B
EBITDA	447.75B	422.03B	382.92B	356.76B	330.96B	331.06B
Net Income	200.33B	175.18B	149.52B	114.50B	141.28B	149.61B
Balance Sheet
Total Assets	3.87T	4.32T	4.23T	4.04T	3.82T	3.73T
Cash, Cash Equivalents and Short-Term Investments	526.69B	584.62B	476.49B	419.46B	430.78B	523.35B
Total Debt	513.49B	666.36B	573.64B	608.48B	597.38B	702.86B
Total Liabilities	1.90T	2.24T	2.14T	2.13T	2.04T	2.16T
Stockholders Equity	1.89T	1.95T	1.92T	1.62T	1.51T	1.31T
Cash Flow
Free Cash Flow	381.19B	218.00B	171.46B	74.41B	76.41B	203.97B
Operating Cash Flow	493.73B	344.41B	271.23B	152.13B	147.52B	274.91B
Investing Cash Flow	-346.91B	-242.17B	-76.02B	-49.59B	-63.38B	-87.49B
Financing Cash Flow	-118.42B	7.03B	-155.51B	-122.79B	-189.62B	-33.61B

NEC Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5618.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:6701, the sentiment is Positive. The current price of 5618 is above the 20-day moving average (MA) of 5005.40, above the 50-day MA of 4732.98, and above the 200-day MA of 3794.00, indicating a bullish trend. The MACD of 205.48 indicates Negative momentum. The RSI at 68.60 is Neutral, neither overbought nor oversold. The STOCH value of 74.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:6701.

NEC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4307	―	$3.15T	31.98	22.48%	1.10%	4.50%	16.64%
3626	―	¥1.12T	21.62	―	1.32%	4.95%	9.54%
6701	―	$6.49T	31.79	11.69%	0.55%	2.68%	56.38%
6702	―	$6.99T	17.60	15.02%	0.75%	-8.58%	83.16%
9719	―	¥1.31T	26.48	―	1.48%	42.98%	48.88%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
9613	―	―	―	―	―	3.73%	11.64%

NEC Corporate Events

NEC Corporation Reports Strong Financial Growth

NEC Corporation is a leading Japanese multinational company specializing in information technology and network solutions, primarily serving the telecommunications and IT services sectors. The company is known for its innovative approach in integrating IT and network technologies to provide solutions for society.

NEC Corporation Acquires CSG Systems to Strengthen U.S. Market Presence

NEC Corporation has announced its acquisition of CSG Systems International, a U.S.-based software company serving telecom and broadband businesses, for approximately $2.887 billion. This strategic move aims to bolster NEC’s presence in the U.S. market and enhance its global software and services business. The acquisition will enable NEC to leverage CSG’s strong U.S. customer base and Netcracker’s global expertise to offer enhanced digital transformation solutions across various industries, including telecom and broadband, ultimately strengthening NEC’s industry positioning and providing greater value to its customers.

The most recent analyst rating on (JP:6701) stock is a Buy with a Yen5588.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Corporation Reports Strong Financial Growth in 2025

NEC Corporation reported significant financial growth for the six-month period ending September 30, 2025, with a 5.6% increase in revenue and substantial rises in operating profit and net profit compared to the previous year. The company’s strategic initiatives, including a share split and adjustments in operating profits, have positively impacted its financial performance and market positioning, indicating strong underlying profitability and a promising outlook for stakeholders.

The most recent analyst rating on (JP:6701) stock is a Buy with a Yen5588.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Corporation to Merge with NEC Patent Service to Strengthen Intellectual Property Strategy

NEC Corporation has announced a merger with its wholly-owned subsidiary, NEC Patent Service, Ltd., effective April 1, 2026. This strategic move aims to optimize NEC’s intellectual property resources by integrating NEPAS into its Intellectual Property & Rule-Making Division, enhancing its ability to manage patents and analyze competitors’ trends. The merger is expected to streamline operations and reinforce NEC’s market positioning by leveraging intellectual property as a core strategic asset.

The most recent analyst rating on (JP:6701) stock is a Buy with a Yen5740.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.

NEC Restructures Fire and Disaster Prevention Business

NEC Corporation is restructuring its fire and disaster prevention business through a series of corporate splits involving its wholly-owned subsidiaries. This strategic move aims to strengthen NEC’s business foundation in the digital transformation and social infrastructure domains by transferring operations to NEC Networks & System Integration Corporation. The reorganization is part of NEC’s broader plan to streamline its operations and enhance its market positioning in domestic regions.

The most recent analyst rating on (JP:6701) stock is a Sell with a Yen3500.00 price target. To see the full list of analyst forecasts on NEC stock, see the JP:6701 Stock Forecast page.