Interspace Co., Ltd. (2122) AI Stock Analysis

• Market Cap: ¥9.05B
• Dividend Yield: 2.61%
• Average Volume (3M): 29.95K
• Price to Earnings (P/E): 32.0
• Beta (1Y): 0.19
• Revenue Growth: 11.84%
• EPS Growth: 246.10%
• Country: JP
• Employees: 414
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 23.25
• Shares Outstanding: 6,967,200
• 10 Day Avg. Volume: 7,440
• 30 Day Avg. Volume: 29,946
• PEG Ratio: 0.15
• Price to Book (P/B): 1.38
• Price to Sales (P/S): 0.88
• P/FCF Ratio: 72.55
• 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: 59 Neutral
• Price Target: ¥1,395.00 ▲(21.41% Upside)
• Action: Reiterated Date: 12/30/25
• Date: Action: Reiterated 12/30/25

The score is driven primarily by strong financial safety from a near-zero debt balance sheet, offset by volatile earnings/cash flow (especially weaker 2025 cash generation). Technical signals are neutral-to-mixed, and a relatively high P/E constrains the valuation component despite a moderate dividend yield.

Positive Factors

Conservative balance sheet

Near-zero debt materially lowers financial risk and provides durable financial flexibility. Over a 2–6 month horizon this balance-sheet strength supports the company’s ability to fund operations, absorb advertising-cycle shocks, pursue opportunistic investment, and maintain shareholder returns without refinancing stress.

Very high gross margins

Sustained gross margins above 80% reflect a highly scalable, low-variable-cost digital business. This structural margin advantage enables profitable growth as revenues expand, funds reinvestment in media and product, and provides a buffer against operating cost swings over the medium term.

Multi-year revenue growth

Consecutive annual revenue gains demonstrate persistent market demand for the company’s affiliate and consumer-media offerings. Even with slower growth in 2025, sustained top-line expansion supports the fixed-cost leverage potential and offers a platform to rebuild margins and cash conversion over coming quarters.

Negative Factors

Volatile cash generation

Irregular operating and free cash flow weakens the reliability of internal funding for capex, acquisitions, and dividends. The 2025 cash drop suggests working-capital or timing issues that reduce predictability and force heavier reliance on cash reserves, even with low debt, over the medium term.

Earnings and margin volatility

Large swings in operating and net margins indicate earnings instability driven by cost or pricing pressures. This undermines forecastability of profits and ROE, complicates capital allocation, and raises the risk that a future adverse cycle could again compress profitability despite top-line growth.

Concentration in affiliate model

Heavy reliance on performance-based affiliate revenue exposes the firm to structural risks: advertiser budget cyclicality, shifts in tracking/privacy rules, and platform concentration. These industry-level pressures can materially affect long-term revenue visibility and margin sustainability.

Interspace Co., Ltd. Business Overview & Revenue Model

Company Description

Interspace Co.,Ltd. engages in the provision of internet advertising and media services in Japan, Indonesia, Thailand, Vietnam, Singapore, and Malaysia. The company offers ACCESSTRADE, an affiliate platform; and Store Front Affiliate, a real store type affiliate service. It also provides mamastadium, an information Website for Moms; and Yoga Journal Online, a yoga and beauty online news media for yoga news and lifestyle. The company was incorporated in 1999 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Interspace Co., Ltd. generates revenue through its affiliate marketing platform, where it earns commissions by connecting advertisers with publishers who promote their products or services online. The company operates a network that facilitates these transactions, taking a percentage of the sales or leads generated through its platform. Additionally, Interspace Co., Ltd. earns money through digital marketing services, where it provides clients with tailored advertising strategies and solutions to enhance their online presence and reach. Partnerships with various online platforms and media channels also contribute to its earnings, allowing the company to offer comprehensive advertising and marketing services to its clients.

Interspace Co., Ltd. Financial Statement Overview

Summary

Very conservative balance sheet with near-zero debt and stable assets/equity supports resilience, but profitability has been volatile (sharp margin compression in 2024 with only partial recovery in 2025) and cash generation is inconsistent with a notable drop in 2025.

Income Statement

Revenue has grown for three consecutive years (2023–2025), but at a slowing pace in 2025. Profitability is the main swing factor: operating and net margins were very strong in 2022–2023, then compressed sharply in 2024, and only partially recovered in 2025 (net margin still low). A key positive is the very high gross margin in recent years (over 80% in 2022–2025), but the large drop from 2023 to 2024 in operating profit and net income highlights earnings volatility.

Balance Sheet

The balance sheet is conservatively positioned with essentially no debt across the period (debt-to-equity at or near zero), which materially lowers financial risk. Equity and total assets have been stable over time, supporting resilience. The trade-off is modest shareholder returns in the most recent years, with return on equity falling meaningfully from 2022–2023 levels to low single-digits in 2024–2025, reflecting weaker profitability rather than leverage.

Cash Flow

Cash generation has been inconsistent: operating cash flow and free cash flow were strong in 2021–2022, weakened in 2023, improved in 2024, and then dropped sharply again in 2025. Free cash flow has generally covered net income at a reasonable level (roughly 0.4x–0.9x historically and ~0.63x in 2024–2025), but 2025 shows notably weaker cash conversion versus profits, signaling higher working-capital use and/or less favorable cash timing. Overall cash flow quality is acceptable, but the volatility reduces confidence.

Breakdown	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	8.85B	7.91B	7.28B	7.12B	23.14B
Gross Profit	7.31B	6.36B	5.94B	5.95B	5.08B
EBITDA	610.84M	618.19M	1.14B	1.29B	864.02M
Net Income	206.00M	59.52M	585.98M	563.46M	427.88M
Balance Sheet
Total Assets	11.18B	11.23B	11.09B	11.07B	10.28B
Cash, Cash Equivalents and Short-Term Investments	5.59B	5.95B	5.63B	5.76B	5.46B
Total Debt	0.00	0.00	0.00	0.00	0.00
Total Liabilities	5.55B	5.59B	5.31B	5.71B	4.83B
Stockholders Equity	5.64B	5.64B	5.78B	5.36B	5.45B
Cash Flow
Free Cash Flow	106.84M	528.69M	212.71M	970.86M	1.20B
Operating Cash Flow	169.63M	836.88M	512.55M	1.18B	1.37B
Investing Cash Flow	-333.69M	-332.73M	-482.46M	-263.64M	-129.90M
Financing Cash Flow	-187.93M	-156.58M	-156.80M	-657.85M	-135.59M

Interspace Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1149.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2122, the sentiment is Positive. The current price of 1149 is below the 20-day moving average (MA) of 1263.55, below the 50-day MA of 1233.84, and above the 200-day MA of 1087.48, indicating a bullish trend. The MACD of 21.22 indicates Negative momentum. The RSI at 73.17 is Negative, neither overbought nor oversold. The STOCH value of 67.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2122.

Interspace Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6535	75 Outperform	¥31.04B	13.59	―	5.35%	58.08%	29.89%
6045	68 Neutral	¥13.91B	21.67	―	2.19%	14.43%	10.99%
7095	66 Neutral	¥21.40B	8.03	―	2.01%	15.43%	12.47%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
2122	59 Neutral	¥9.05B	32.05	―	2.61%	11.84%	246.10%
2491	57 Neutral	¥14.41B	19.85	―	7.85%	-3.20%	34.08%
6094	50 Neutral	¥13.68B	17.08	―	―	-2.68%	91.68%

Interspace Co., Ltd. Corporate Events

Interspace Posts Strong Quarterly Profit Growth and Projects Sharp Earnings Rise for Fiscal 2026

Interspace Co., Ltd. reported consolidated net sales of ¥2,323 million for the three months ended December 31, 2025, up 11.9% year on year, with operating profit rising 32.9% to ¥139 million and profit attributable to owners of parent jumping 61.3% to ¥145 million. Earnings per share improved to ¥23.25, while total assets edged down slightly to ¥11,035 million and the equity ratio stayed flat at 50.4%, indicating a stable financial base.

The company maintained its dividend policy, paying ¥30 per share in the prior fiscal year and forecasting the same total payout for the year ending September 30, 2026, with no revisions to its dividend outlook. For fiscal 2026, Interspace projects net sales of ¥9,800 million, up 10.8% year on year, and expects operating profit to nearly double to ¥700 million and profit attributable to owners of parent to more than double to ¥420 million, signaling confidence in earnings growth and improved profitability.

The most recent analyst rating on (JP:2122) stock is a Hold with a Yen1318.00 price target. To see the full list of analyst forecasts on Interspace Co., Ltd. stock, see the JP:2122 Stock Forecast page.