KG Intelligence Co., Ltd. (2408) AI Stock Analysis

• Market Cap: ¥5.32B
• Dividend Yield: 5.27%
• Average Volume (3M): 11.55K
• Price to Earnings (P/E): 16.0
• Beta (1Y): 0.31
• Revenue Growth: 6.79%
• EPS Growth: -30.39%
• Country: JP
• Employees: 176
• Sector: Communication Services
• Sector Strength: 97
• Industry: Publishing
• EPS (TTM): 21.35
• Shares Outstanding: 7,398,000
• 10 Day Avg. Volume: 16,050
• 30 Day Avg. Volume: 11,553
• PEG Ratio: 0.38
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 1.83
• P/FCF Ratio: 21.34
• 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: 75 Outperform
• Price Target: ¥844.00 ▲(23.57% Upside)
• Action: Upgraded Date: 01/29/26
• Date: Action: Upgraded 01/29/26

The score is driven primarily by strong financial resilience (near-zero leverage and improved profitability), tempered by recent revenue contraction and inconsistent cash-flow conversion. Technicals add support via a clear uptrend and positive momentum, while valuation is helped by a high dividend yield and a moderate P/E.

Positive Factors

Conservative Balance Sheet

Near-zero leverage materially reduces financial risk and preserves flexibility across cycles. With minimal debt the company can better withstand industry downturns, fund strategic initiatives or shareholder returns from internal resources, and avoid refinancing pressure in stressed markets.

Improved Profitability

Material margin improvement since 2020 indicates stronger earnings quality and operational control. Sustainable mid-teens operating margins provide a buffer versus revenue volatility, improving the business's ability to generate surplus cash for reinvestment or distributions over the next several quarters.

Positive FCF in 2025

Generating positive operating and free cash flow in 2025 demonstrates the company's capacity to fund operations and returns from internal cash. While not fully consistent historically, a recent positive FCF year supports durability of capital deployment and reduces immediate reliance on external financing.

Negative Factors

Revenue Contraction

A sharp, multi-year top-line decline undermines growth prospects and can erode scale economics. Sustained revenue contraction compresses long-term investment capacity, risks margin pressure if fixed costs persist, and limits the company’s ability to expand market share in the publishing sector.

Volatile Cash Conversion

Inconsistent cash conversion and occasional negative operating cash flow create planning and liquidity uncertainty. Volatility increases reliance on cash reserves, complicates dividend or capex planning, and raises the risk that profitable accounting results do not translate into available cash when needed.

Modest Return on Equity

Mid-single-digit ROE despite an asset-light model signals limited capital efficiency and weaker long-term value creation. Even with low leverage, modest returns constrain the company’s ability to justify reinvestment levels, attract capital, or deliver strong compounding returns for shareholders over time.

KG Intelligence Co., Ltd. Business Overview & Revenue Model

Company Description

KG Intelligence Co., Ltd. (2408) specializes in providing cutting-edge data analytics and artificial intelligence solutions. The company operates in the technology sector, focusing on developing advanced software and AI-driven tools designed to optimize business processes and decision-making for various industries. Their core products include data management platforms, AI-driven analytics tools, and customized software solutions that cater to specific industry needs.

How the Company Makes Money

KG Intelligence Co., Ltd. generates revenue through a combination of software sales, subscription services, and consulting fees. The company offers its products on a licensing basis, where clients pay for the right to use the software for a specified period. Subscription services provide recurring revenue, as clients pay regular fees for continuous access to the company's platform and updates. Additionally, KG Intelligence provides consultancy services, helping businesses implement and customize AI solutions, which constitutes another significant revenue stream. The company may also engage in strategic partnerships with other technology firms to expand its offerings and customer base, contributing to its financial growth.

KG Intelligence Co., Ltd. Financial Statement Overview

Summary

Profitability has improved meaningfully since 2020 with healthy 2025 operating and net margins, and the balance sheet is exceptionally conservative with essentially no debt. Offsetting this strength, revenue declined in 2024 and fell sharply in 2025, and cash flow has been uneven with a negative cash-flow year in 2024 and weaker cash conversion versus earnings.

Income Statement

Profitability has materially improved versus 2020, with the company now posting healthy operating profitability (2025 net margin ~12% and operating margin ~17%) and stronger gross margin than earlier years. However, the top line is inconsistent: revenue declined in 2024 and fell sharply in 2025 (down ~16%), and net margin remains below the 2023 peak. Overall, earnings quality looks solid but the recent revenue contraction is a clear overhang.

Balance Sheet

The balance sheet is very conservative, with essentially no debt in recent years (debt-to-equity at ~0), which limits financial risk and improves resilience through industry cycles. Equity is stable and return on equity is positive in the mid-single-digits in 2024–2025 (after a weaker 2021 and a loss in 2020). The main drawback is that returns are modest for an asset-light profile, suggesting capital efficiency could be better despite the low leverage.

Cash Flow

Cash generation is mixed. 2025 shows positive operating cash flow and free cash flow, but cash conversion is not especially strong relative to earnings (operating cash flow is well below net income, and free cash flow is also below net income). Volatility is the bigger concern: 2024 had negative operating and free cash flow despite reported profitability, indicating potential working-capital swings or timing effects. Overall cash flow is acceptable but not consistently dependable year-to-year.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.74B	2.47B	2.66B	2.49B	2.17B
Gross Profit	824.39M	665.79M	737.28M	586.12M	345.48M
EBITDA	500.37M	352.00M	413.03M	308.21M	96.40M
Net Income	335.81M	241.04M	371.43M	337.66M	72.46M
Balance Sheet
Total Assets	6.89B	6.73B	7.44B	7.16B	6.59B
Cash, Cash Equivalents and Short-Term Investments	5.04B	5.08B	5.71B	5.53B	4.53B
Total Debt	0.00	0.00	0.00	0.00	1.64M
Total Liabilities	867.52M	821.00M	1.49B	1.49B	1.20B
Stockholders Equity	6.02B	5.91B	5.96B	5.66B	5.39B
Cash Flow
Free Cash Flow	234.31M	-325.56M	264.25M	490.99M	356.30M
Operating Cash Flow	349.32M	-293.17M	282.31M	504.99M	364.83M
Investing Cash Flow	-130.12M	167.77M	-238.52M	-235.09M	183.64M
Financing Cash Flow	-262.77M	-295.13M	-84.73M	-73.92M	-75.93M

KG Intelligence Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 683.00
• 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:2408, the sentiment is Positive. The current price of 683 is below the 20-day moving average (MA) of 732.40, below the 50-day MA of 715.84, and above the 200-day MA of 659.29, indicating a bullish trend. The MACD of 3.70 indicates Positive momentum. The RSI at 55.91 is Neutral, neither overbought nor oversold. The STOCH value of 77.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2408.

KG Intelligence Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2408	75 Outperform	¥5.32B	16.04	―	5.27%	6.79%	-30.39%
6176	73 Outperform	¥10.76B	16.13	―	―	7.76%	12.44%
3678	72 Outperform	¥25.10B	12.02	―	2.01%	6.10%	―
9478	70 Outperform	¥6.71B	13.28	―	0.87%	-3.02%	-30.86%
2376	68 Neutral	¥4.09B	29.83	―	2.04%	4.91%	-60.12%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3641	48 Neutral	¥9.44B	64.79	―	1.02%	-8.03%	―

KG Intelligence Co., Ltd. Corporate Events

KG Intelligence Posts Double-Digit Profit Growth and Stronger Cash Flows in FY2025

KG Intelligence Co., Ltd. reported consolidated operating revenues of ¥2,736 million for the fiscal year ended December 2025, a 10.9% increase from the prior year, with operating profit surging 44.6% to ¥440 million and profit attributable to owners of parent rising 39.3% to ¥335 million. Profitability ratios improved notably, with operating margin climbing to 16.1%, return on equity increasing to 5.6%, and ordinary profit to total assets ratio rising to 6.8%, while net assets expanded to ¥6,022 million and the capital adequacy ratio remained high at 87.4%, underscoring a robust balance sheet. Cash flow from operating activities swung from a negative ¥293 million in the previous year to a positive ¥349 million, while the company modestly increased investment outflows and continued reducing financing cash flows, resulting in a slight decrease in cash and equivalents to ¥620 million but overall indicating stronger internal cash generation and sustained financial stability ahead of its scheduled shareholder meeting and report filings.

The most recent analyst rating on (JP:2408) stock is a Hold with a Yen795.00 price target. To see the full list of analyst forecasts on KG Intelligence Co., Ltd. stock, see the JP:2408 Stock Forecast page.