MFS,Inc. (196A) AI Stock Analysis

• Market Cap: ¥2.55B
• Dividend Yield: N/A
• Average Volume (3M): 106.15K
• Price to Earnings (P/E): 22.0
• Beta (1Y): 0.09
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: JP
• Employees: 58
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Mortgages
• EPS (TTM): N/A
• Shares Outstanding: 9,179,300
• 10 Day Avg. Volume: 221,380
• 30 Day Avg. Volume: 106,150
• PEG Ratio: -0.15
• Price to Book (P/B): 2.06
• Price to Sales (P/S): 1.58
• P/FCF Ratio: 41.40
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: ¥295.00 ▼(-4.22% Downside)

The score is driven primarily by improved financial performance—strong revenue growth, a return to profitability, and a much cleaner balance sheet—tempered by the company’s history of earnings/cash-flow volatility. Technicals are moderately positive short-term but weaker versus longer-term averages, and valuation is only average given a ~24.4 P/E and no dividend yield provided.

Positive Factors

Return to Profitability

Recent inflection to positive net margin (~5.5%) and EBIT margin (~6.6%) indicates the company has restored operating profitability. Sustained profits enable reinvestment, debt reduction, and strategic investment, improving resilience if management can hold gains through cycles.

Strong Revenue Growth

Reported ~20% top-line growth signals meaningful demand expansion and commercial traction. Durable revenue growth supports scale benefits, helps dilute fixed costs, and, if maintained, should drive improved margins and long-term cash generation in the mortgage business.

De-risked Balance Sheet

Total debt fell to effectively zero by 2025, leaving the company lightly levered with sizable equity. Low leverage materially enhances financial flexibility to invest, withstand downturns, and reduces refinancing risk, strengthening long-term strategic optionality.

Negative Factors

Earnings and Cash-Flow Volatility

The firm experienced multi-year earnings and cash-flow swings, with losses before the 2025 recovery. This cyclicality raises forecasting and operating risk, undermines consistent capital allocation, and increases the probability of pro-cyclical cuts in weaker market periods.

Modest Operating Margins

EBIT margins around ~6.6% are modest for durable margin generation and leave limited buffer against cost inflation or credit/funding stress. Without structural margin expansion, the business may struggle to convert revenue gains into strong, resilient free cash flow over the medium term.

Inconsistent Cash Flow / Working-Capital Sensitivity

While cash generation improved in 2025, prior large cash burns and a negative 2024 show working-capital or timing sensitivity. Recurring cash variability can constrain reinvestment, require external financing in stress, and complicate sustainable free-cash-flow conversion.

MFS,Inc. Business Overview & Revenue Model

Company Description

MFS, Inc. provides online mortgage loan services. It also offers real estate investment loan services. The company was incorporated in 2009 and is headquartered in Tokyo, Japan.

How the Company Makes Money

MFS, Inc. generates revenue through multiple streams, primarily from service contracts and project-based consulting fees. The company works with various industries, providing customized software solutions and consulting services that address specific client needs. Key revenue streams include long-term service agreements with corporate clients, one-time project fees for software development, and ongoing maintenance and support contracts. Additionally, MFS has established strategic partnerships with major technology providers, allowing them to leverage these relationships for co-development opportunities and access to new markets, which further enhances their earnings potential.

MFS,Inc. Financial Statement Overview

Summary

Solid turnaround with strong revenue growth (~20%) and a return to profitability (net margin ~5.5%, EBIT margin ~6.6%), plus a significantly de-risked balance sheet with debt effectively at zero. The main offset is multi-year volatility in earnings and cash flow, with inconsistent cash generation prior to 2025.

Income Statement

Revenue growth is strong in the latest annual period (up ~20%), and profitability has inflected sharply from losses to solid positive earnings (net margin ~5.5% vs. negative in the prior two years). Gross profit margin remains high, but operating profitability is still relatively modest (EBIT margin ~6.6%), suggesting the business is profitable again but not yet firmly in “high-margin” territory. The key weakness is volatility: 2022–2024 showed recurring operating losses before the 2025 turnaround, indicating execution/cycle sensitivity.

Balance Sheet

The balance sheet has materially de-risked: total debt fell from elevated levels in 2022–2023 to low in 2024 and effectively zero in 2025, leaving the company lightly levered. Equity is sizable relative to assets, and returns on equity turned positive (~7.2%) after being negative for several years. The main watch item is that profitability has only recently recovered, so sustained returns and balance-sheet efficiency still need to be proven through a full cycle.

Cash Flow

Cash generation improved meaningfully in 2025 with positive operating cash flow and free cash flow, and free cash flow is close to reported earnings (free cash flow to net income ~0.95), which is a constructive quality signal. However, cash flow has been inconsistent across years (large cash burn in 2022, negative again in 2024), and the latest operating cash flow is still modest versus revenue scale, implying working-capital or timing sensitivity typical of the sector.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022
Income Statement
Total Revenue	2.92B	2.92B	1.89B	1.61B	843.69M
Gross Profit	2.17B	2.17B	1.55B	1.19B	558.91M
EBITDA	225.46M	225.47M	-110.61M	-132.48M	-521.71M
Net Income	160.15M	160.15M	-121.57M	-149.69M	-555.52M
Balance Sheet
Total Assets	2.54B	2.54B	2.42B	1.94B	925.95M
Cash, Cash Equivalents and Short-Term Investments	1.82B	1.82B	1.98B	1.58B	495.63M
Total Debt	0.00	0.00	108.33M	532.00M	350.00M
Total Liabilities	306.70M	306.70M	360.17M	755.49M	457.02M
Stockholders Equity	2.23B	2.23B	2.06B	1.19B	468.93M
Cash Flow
Free Cash Flow	0.00	111.19M	-157.05M	29.33M	-826.76M
Operating Cash Flow	0.00	116.80M	-70.84M	62.19M	-824.88M
Investing Cash Flow	0.00	-256.56M	-91.32M	-130.72M	102.50M
Financing Cash Flow	0.00	-115.56M	556.36M	1.05B	200.00M

MFS,Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 308.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:196A, the sentiment is Negative. The current price of 308 is above the 20-day moving average (MA) of 290.30, above the 50-day MA of 293.16, and below the 200-day MA of 382.86, indicating a bearish trend. The MACD of -6.07 indicates Positive momentum. The RSI at 41.47 is Neutral, neither overbought nor oversold. The STOCH value of 28.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:196A.

MFS,Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7192	71 Outperform	¥7.69B	7.29	―	3.94%	7.06%	34.95%
8772	70 Outperform	¥30.80B	8.02	―	2.41%	15.07%	27.86%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
196A	66 Neutral	¥2.55B	22.04	―	―	―	―
7196	66 Neutral	¥7.39B	7.42	―	4.49%	5.76%	―
7198	59 Neutral	¥39.02B	21.76	―	4.51%	4.86%	-10.59%