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

• Market Cap: ¥8.12B
• Dividend Yield: 3.16%
• Average Volume (3M): 7.69K
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.60
• 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

Robust balance sheet

A very high equity ratio and virtually no financial leverage materially reduce solvency risk and preserve strategic optionality. This durable capital structure supports multi-quarter investments, stable operations in downturns, and flexibility for M&A or capex without stressing liquidity.

Strong cash generation

Sustained free cash flow growth and healthy operating-cash-to-net-income conversion indicate the business reliably converts profits to cash. This underpins long-term reinvestment, working-capital stability, and shareholder returns while reducing dependence on external funding over many quarters.

Stable margins and profitability

Consistent gross and improving net margins alongside stable EBIT/EBITDA reflect operational efficiency in delivery and pricing. Such margin durability supports predictable earnings power, funds for growth initiatives, and competitive positioning across corporate and public-sector clients over the medium term.

Negative Factors

Modest net profit margin

A single-digit net margin leaves limited room to absorb cost inflation or pricing pressure without eroding earnings. Over several quarters this constrains free cash growth and makes capital allocation decisions more sensitive to margin swings versus higher-margin software peers.

Project-driven business model

Heavy reliance on system integration and implementation work creates lumpy, project-based revenue with longer sales cycles and client-specific deliveries. This structural mix can reduce revenue predictability and recurring-income ratio, increasing exposure to capex cycles across industries.

Moderate return on equity

ROE in the low double digits is adequate but modest for an IT services firm; with very low leverage, further shareholder return expansion depends on sustained revenue growth or margin improvement. Without that, capital efficiency and investor returns may remain constrained.

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	1.92B
EBITDA	1.22B	1.22B	1.17B	1.15B	979.48M	902.16M
Net Income	758.25M	767.59M	696.18M	690.29M	690.41M	636.23M
Balance Sheet
Total Assets	9.98B	10.22B	9.46B	9.04B	7.94B	7.43B
Cash, Cash Equivalents and Short-Term Investments	2.88B	3.53B	3.20B	2.66B	2.17B	3.05B
Total Debt	195.70M	11.68M	15.04M	3.80M	7.43M	10.91M
Total Liabilities	2.90B	2.97B	2.67B	2.78B	2.28B	2.23B
Stockholders Equity	7.08B	7.25B	6.79B	6.27B	5.67B	5.20B
Cash Flow
Free Cash Flow	145.76M	588.54M	500.71M	648.07M	450.55M	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: Negative
• Last Price: 1609.00
• 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:2332, the sentiment is Negative. The current price of 1609 is below the 20-day moving average (MA) of 1662.15, below the 50-day MA of 1729.86, and above the 200-day MA of 1568.76, indicating a bearish trend. The MACD of -47.44 indicates Positive momentum. The RSI at 38.53 is Neutral, neither overbought nor oversold. The STOCH value of 21.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥7.08B	10.46	―	3.37%	5.25%	23.64%
2332	80 Outperform	¥8.12B	9.80	―	3.16%	14.02%	2.74%
3676	73 Outperform	¥19.73B	7.63	―	2.36%	-2.68%	-12.83%
4442	73 Outperform	¥9.45B	11.18	―	0.95%	9.36%	-1.69%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3657	46 Neutral	¥10.22B	-3.21	―	5.03%	3.97%	63.06%
5255	42 Neutral	¥6.66B	-28.24	―	―	-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.