Ascentech KK (3565) AI Stock Analysis

• Market Cap: ¥15.10B
• Dividend Yield: 0.91%
• Average Volume (3M): 307.47K
• Price to Earnings (P/E): 10.2
• Beta (1Y): 0.73
• Revenue Growth: 80.11%
• EPS Growth: 169.72%
• Country: JP
• Employees: 165
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): N/A
• Shares Outstanding: 14,580,000
• 10 Day Avg. Volume: 713,330
• 30 Day Avg. Volume: 307,466
• PEG Ratio: 0.08
• Price to Book (P/B): 3.38
• Price to Sales (P/S): 1.20
• P/FCF Ratio: 3.22
• 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: 73 Outperform
• Price Target: ¥1,166.00 ▼(-20.57% Downside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is driven by strong financial quality (debt-free balance sheet, improved margins, and solid cash generation) and attractive valuation (low P/E with a meaningful dividend yield). These positives are partially offset by weak technicals, with the price in a clear downtrend despite oversold readings.

Positive Factors

Debt-free balance sheet and high ROE

Zero reported debt and ~33% ROE give the company durable financial flexibility and low insolvency risk. This supports investment in growth, withstands cyclical stress, and enables shareholder returns or M&A without near-term refinancing risk.

Material margin improvement and profitability

Sustained higher gross and EBIT margins point to improved pricing, product mix, or operating leverage in services/software. Durable margins support long-term cash generation and reinvestment capacity if revenue stability holds.

Recurring revenue mix from subscriptions and support

A revenue mix with subscriptions and maintenance creates predictable, recurring cash flows and customer stickiness. Combined with system integration services, this supports stable revenue visibility and cross-sell opportunities over multiple quarters.

Negative Factors

Choppy top-line with recent year decline

An uneven revenue trajectory undermines the durability of recent margin gains: falling sales can quickly erode operating leverage and cash generation. Persistent top-line volatility increases execution risk for medium-term plans.

Volatility in cash conversion history

Inconsistent operating cash flow relative to earnings raises predictability concerns for investments, dividends, or M&A. Working-capital swings or lumpy receipts can stress liquidity and complicate multi-quarter planning.

Step-change in assets may pressure integration or working capital

A sudden rise in asset base could reflect acquisitions or elevated capex; if asset quality or integration is poor, returns may be impaired and working-capital needs could rise, pressuring cash and operational focus over coming quarters.

Ascentech KK Business Overview & Revenue Model

Company Description

Ascentech K.K. provides virtual desktop infrastructure (VDI) and IT infrastructure solutions. It provides VDI software, VDI server, network, security, VDI printing, ThinClient, and various infrastructure products and solutions. The company also offers professional services, such as consulting, system design and integration; and support and maintenance services, as well as cloud and technical consultation services. Ascentech K.K. was founded in 2009 and is based in Tokyo, Japan.

Ascentech KK Financial Statement Overview

Summary

Strong overall fundamentals: profitability improved materially (gross margin ~23%, net margin ~11.8%, EBIT margin ~16.3%), cash generation is robust with FCF ~0.99x net income, and the balance sheet is conservatively positioned with zero debt and strong ROE (~33%). The main offset is uneven revenue performance (latest year down ~11.4%) and historically variable cash conversion.

Income Statement

Profitability strengthened materially in the latest annual period: gross margin expanded to ~23% (from ~12% prior year) and net margin improved to ~11.8% (from ~5.9%), with EBIT margin rising to ~16.3%. However, revenue declined ~11.4% year over year after a strong jump the prior year, highlighting a choppy top-line trajectory and raising questions about durability of recent margin gains.

Balance Sheet

The balance sheet is very conservatively positioned with zero reported debt across periods, providing high financial flexibility and low insolvency risk. Equity has grown meaningfully over time, and returns on equity are strong (most recently ~33%), though the sharp increase in total assets in the latest year versus prior periods suggests a step-change in the asset base that should be monitored for quality and integration/working-capital impacts.

Cash Flow

Cash generation is a key strength: operating cash flow and free cash flow are both robust in the latest year, and free cash flow is roughly in line with net income (~0.99x), implying earnings are well supported by cash. The main weakness is volatility in cash conversion over time, with prior-year operating cash flow relative to net income swinging notably (including a very weak year in 2022), which increases uncertainty around consistency.

Breakdown	TTM	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	19.67B	17.43B	14.59B	6.23B	6.32B	6.48B
Gross Profit	2.74B	4.06B	1.69B	1.18B	1.14B	1.23B
EBITDA	1.86B	2.98B	997.57M	702.85M	675.70M	755.60M
Net Income	1.31B	2.06B	859.63M	480.60M	439.84M	496.69M
Balance Sheet
Total Assets	30.69B	35.27B	9.34B	4.62B	3.91B	3.58B
Cash, Cash Equivalents and Short-Term Investments	9.22B	12.58B	6.01B	2.24B	1.55B	1.42B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	25.67B	29.06B	5.14B	1.50B	1.27B	1.23B
Stockholders Equity	5.02B	6.21B	4.20B	3.12B	2.64B	2.35B
Cash Flow
Free Cash Flow	0.00	6.52B	3.59B	827.31M	395.19M	23.38M
Operating Cash Flow	0.00	6.61B	3.64B	855.47M	426.69M	38.23M
Investing Cash Flow	0.00	-8.09B	-116.74M	-84.10M	-132.15M	-96.52M
Financing Cash Flow	0.00	23.44M	255.65M	-92.66M	-173.93M	-236.45M

Ascentech KK Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1468.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3565, the sentiment is Negative. The current price of 1468 is above the 20-day moving average (MA) of 1212.45, above the 50-day MA of 1361.25, and below the 200-day MA of 1497.11, indicating a bearish trend. The MACD of -75.82 indicates Positive momentum. The RSI at 30.31 is Neutral, neither overbought nor oversold. The STOCH value of 5.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3565.

Ascentech KK Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3984	74 Outperform	¥23.05B	16.06	―	0.73%	17.86%	21.52%
3565	73 Outperform	¥15.10B	10.19	―	0.91%	80.11%	169.72%
4396	71 Outperform	¥21.84B	11.39	―	1.70%	22.25%	31.88%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3788	60 Neutral	¥21.24B	26.90	―	1.50%	7.83%	49.73%
3968	55 Neutral	¥17.77B	17.48	―	1.72%	26.24%	29.73%
4813	44 Neutral	¥22.51B	-6.86	―	―	25.89%	-285.21%