Quest Co., Ltd. (2332) AI Stock Analysis

• Market Cap: ¥9.29B
• Dividend Yield: 3.16%
• Average Volume (3M): 7.69K
• Price to Earnings (P/E): 12.5
• Beta (1Y): 0.55
• Revenue Growth: 14.02%
• EPS Growth: 2.74%
• Country: JP
• Employees: 966
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 41.05
• Shares Outstanding: 5,487,768
• 10 Day Avg. Volume: 7,450
• 30 Day Avg. Volume: 7,686
• PEG Ratio: 0.91
• Price to Book (P/B): 0.98
• Price to Sales (P/S): 0.48
• P/FCF Ratio: 12.07
• 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: 80 Outperform
• Price Target: ¥2,059.00 ▲(27.97% Upside)
• Action: Reiterated Date: 10/23/25
• Date: Action: Reiterated 10/23/25

Quest Co., Ltd. demonstrates strong financial performance with robust growth and stability, which is the most significant factor in its high score. The technical analysis supports a positive trend, and the valuation indicates potential undervaluation, both contributing positively to the overall score.

Positive Factors

Balance sheet strength

The company's extremely low leverage and high equity ratio provide a durable financial cushion against downturns, preserving strategic optionality for capex, M&A or cyclicality. A 0.002 debt/equity reduces refinancing risk and supports steady operations over the medium term.

Robust cash generation

Sustained free cash flow growth and solid conversion of earnings to cash underpin funding for organic growth, client delivery investments and dividends. Positive FCF trends increase resilience and lower dependence on external financing across 2–6 months and beyond.

Consistent revenue & margin trends

Stable top-line growth with steady gross and improving net margins indicates repeatable service demand and disciplined cost control. This margin stability supports long-term profitability and competitiveness in IT services where contract continuity matters.

Negative Factors

Modest net profitability

Net margins around 5% leave limited buffer against pricing pressure, wage inflation, or contract fluctuations common in IT services. Persistently modest net returns can constrain reinvestment capacity and make earnings more sensitive to cost shocks over the medium term.

Moderate ROE despite strong equity

ROE in the low double digits suggests efficient but not exceptional capital returns given a very strong equity base. For long-term shareholders, moderate ROE may signal slower leverage of balance-sheet strength into higher profit growth unless operational efficiency or scale improves.

Cash conversion below parity

An OCF-to-net-income ratio under 1.0 indicates some gap between reported earnings and cash generation, potentially from working capital or receivables. Over time, incomplete cash conversion can constrain liquidity for investments and raises sensitivity to billing or collections cycles.

Quest Co., Ltd. Business Overview & Revenue Model

Company Description

Quest Co., Ltd. provides IT services and solutions in Japan. It provides system development and maintenance services; IT infrastructure design, construction, maintenance, operation, and management services; application and infrastructure solutions; IT value-enhancement services; and business process outsourcing services, as well as offers IT consulting services. The company was formerly known as Keihin Keisan Center Co., Ltd. and changed its name to Quest Co., Ltd. in April 1988. Quest Co., Ltd. was incorporated in 1965 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Quest Co., Ltd. generates revenue through multiple streams, primarily by selling software licenses and subscriptions for its various technology products. The company also earns income from providing consulting and implementation services to help clients integrate and optimize its software within their operations. Additionally, recurring revenues from cloud-based services contribute significantly to its earnings, as businesses increasingly adopt these solutions for scalability and flexibility. Strategic partnerships with other tech firms and industry leaders enhance Quest's offerings, allowing it to leverage co-marketing opportunities and expand its market reach, further solidifying its revenue base.

Quest Co., Ltd. Financial Statement Overview

Summary

Quest Co., Ltd. exhibits strong financial health across all key verticals. The income statement reflects consistent growth and profitability, while the balance sheet indicates robust financial stability with low leverage. Cash flow generation is efficient, supporting liquidity and future investments.

Income Statement

Quest Co., Ltd. has demonstrated consistent revenue growth, with a notable increase of 5% in the latest year. The gross profit margin has remained strong at approximately 18.4%, and the net profit margin improved from 4.9% to 5.1%. EBIT and EBITDA margins have also shown positive stability, indicating efficient operational management. Overall, the income statement reflects robust profitability and growth trends, enhancing the company's competitive position in the industry.

Balance Sheet

The balance sheet is robust, showcasing a strong equity ratio of approximately 73.9%, which indicates financial stability. The low debt-to-equity ratio of 0.002 highlights minimal leverage, reducing financial risk. Return on Equity (ROE) is healthy at around 10.6%, reflecting efficient use of equity capital. The company's strong equity position provides a solid foundation for future growth and resilience against market fluctuations.

Cash Flow

Quest Co., Ltd. has demonstrated a positive trend in free cash flow growth, with a notable increase of approximately 19% in the latest year. The operating cash flow to net income ratio stands at 0.77, indicating effective cash generation from operations. The free cash flow to net income ratio is also strong at 0.77, reflecting good cash flow management. Overall, the cash flow statement shows healthy cash generation and efficient capital expenditure management, supporting long-term sustainability.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	15.74B	14.94B	14.22B	14.20B	11.81B	11.18B
Gross Profit	2.83B	2.75B	2.62B	2.58B	2.04B	1.93B
EBITDA	1.24B	1.27B	1.23B	1.21B	1.02B	940.69M
Net Income	758.10M	767.59M	696.18M	690.29M	690.41M	636.23M
Balance Sheet
Total Assets	9.98B	9.82B	9.46B	9.04B	8.26B	7.23B
Cash, Cash Equivalents and Short-Term Investments	2.88B	3.33B	3.00B	2.66B	2.48B	2.85B
Total Debt	195.70M	11.68M	15.04M	3.80M	113.10M	10.91M
Total Liabilities	2.90B	2.57B	2.67B	2.78B	2.53B	2.04B
Stockholders Equity	7.08B	7.25B	6.79B	6.27B	5.64B	5.20B
Cash Flow
Free Cash Flow	145.76M	588.54M	494.97M	645.16M	449.45M	645.84M
Operating Cash Flow	145.76M	590.98M	709.34M	659.93M	458.29M	653.11M
Investing Cash Flow	4.96M	91.31M	-2.15M	-150.81M	-1.14B	-108.15M
Financing Cash Flow	-131.19M	-265.58M	-251.96M	-326.42M	-210.62M	-184.47M

Quest Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1609.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2332, the sentiment is Positive. The current price of 1609 is below the 20-day moving average (MA) of 1786.85, below the 50-day MA of 1721.78, and above the 200-day MA of 1551.78, indicating a bullish trend. The MACD of 2.51 indicates Positive momentum. The RSI at 52.87 is Neutral, neither overbought nor oversold. The STOCH value of 64.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2332.

Quest Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4752	81 Outperform	¥7.17B	8.94	―	3.37%	5.25%	23.64%
2332	80 Outperform	¥9.29B	12.48	―	3.16%	14.02%	2.74%
3676	73 Outperform	¥19.40B	29.34	―	2.36%	-2.68%	-12.83%
4442	73 Outperform	¥9.77B	16.05	―	0.95%	9.36%	-1.69%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3657	50 Neutral	¥11.53B	-16.40	―	5.03%	3.97%	63.06%
5255	39 Underperform	¥8.60B	-16.30	―	―	-29.41%	79.74%

Quest Co., Ltd. Corporate Events

Quest Co. grows revenue but margins tighten as it reaffirms full-year outlook

Quest Co., Ltd. reported consolidated net sales of ¥13.24 billion for the nine months ended Dec. 31, 2025, up 20.3% year on year, while operating profit slipped 2.8% to ¥759 million and profit attributable to owners of parent edged down 0.9% to ¥549 million, reflecting margin pressure despite strong top-line growth. The company maintained a solid balance sheet with an equity ratio of 72.5% and confirmed its full-year forecast, projecting ¥16.86 billion in net sales and a 10.1% rise in net profit, alongside a planned annual dividend of ¥55 per share for the year ending March 31, 2026, underscoring a continued focus on shareholder returns.

Quest’s EBITDA for the nine-month period was broadly flat at ¥963 million, but the EBITDA margin declined to 7.3% from 8.7%, suggesting rising costs or pricing pressure in its IT services business. The company’s confirmation of guidance and stable dividend policy indicate management’s confidence in meeting full-year targets, which may reassure investors despite short-term profitability headwinds.

The most recent analyst rating on (JP:2332) stock is a Buy with a Yen2023.00 price target. To see the full list of analyst forecasts on Quest Co., Ltd. stock, see the JP:2332 Stock Forecast page.