Koei Tecmo Holdings Co., Ltd. (3635) AI Stock Analysis

• Market Cap: ¥580.89B
• Dividend Yield: 2.49%
• Average Volume (3M): 2.17M
• Price to Earnings (P/E): 15.4
• Beta (1Y): 0.36
• Revenue Growth: -1.05%
• EPS Growth: 6.49%
• Country: US
• Employees: 2,531
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): N/A
• Shares Outstanding: 336,096,920
• 10 Day Avg. Volume: 1,095,000
• 30 Day Avg. Volume: 2,165,733
• PEG Ratio: 1.46
• Price to Book (P/B): 3.28
• Price to Sales (P/S): 7.47
• P/FCF Ratio: 18.93
• 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: 76 Outperform
• Price Target: ¥1,957.00 ▲(2.70% Upside)

Koei Tecmo Holdings Co., Ltd. scores well due to its strong financial performance and positive technical indicators. The company's robust revenue growth and profitability are key strengths, while the technical analysis suggests short-term momentum. The valuation is reasonable, with a fair P/E ratio and a decent dividend yield. The absence of recent earnings call data and corporate events means these factors do not influence the score.

Positive Factors

High profitability and margins

Sustained high gross (>60%) and net (~45%) margins alongside recent double-digit revenue growth indicate durable franchise economics and pricing power. These margins support steady R&D and content investment, funding sequels, DLC and cross-media projects across product cycles.

Strong cash generation

Consistently strong operating cash conversion and free cash flow provide durable funding for development pipelines, dividends, buybacks or selective M&A without relying on external financing. This cash strength enhances strategic optionality through industry cycles.

Low leverage and solid balance sheet

A low debt-to-equity profile and healthy return on equity support resilience against platform cycle volatility and allow the company to invest in long-term IP, marketing and partnerships while preserving flexibility to pursue strategic opportunities with limited refinancing risk.

Negative Factors

Signs of margin pressure

A recent dip in gross margin signals rising development, licensing or platform costs that could erode long-term profitability if persistent. Over time, sustained cost inflation without offsetting pricing or efficiency gains would compress operating leverage across game release cycles.

Lagging EPS growth

Earnings per share growth materially trails revenue expansion, suggesting margin compression, higher operating costs, share issuance or one-off items. Persistently weak EPS growth can limit per-share returns and reduce ability to increase dividends or fund buybacks sustainably.

Moderate reliance on equity financing

A moderate equity financing stance may dilute returns and indicate a suboptimal capital mix versus modest leverage. Over the medium term this can restrain ROE and shareholder returns if management does not rebalance toward more efficient capital allocation or deploy excess cash into higher-return uses.

Koei Tecmo Holdings Co., Ltd. Business Overview & Revenue Model

Company Description

Koei Tecmo Holdings Co., Ltd., together with its subsidiaries, operates as an entertainment company in Japan, North America, Europe, rest of Asia, and internationally. The company operates through Entertainment, Amusement, and Real Estate segments. The Entertainment segment develops and sells entertainment contents. It offers software for personal computers and gaming consoles. The Amusement segment develops commercial amusements; and manages amusement arcades. The Real Estate segment engages in the operation, management, and lease of real estate properties. It is also involved in the venture capital and other activities. The company was founded in 2009 and is headquartered in Yokohama, Japan. Koei Tecmo Holdings Co., Ltd. is a subsidiary of Koyu Holdings Co., Ltd.

How the Company Makes Money

Koei Tecmo generates revenue primarily through the sale of video games across multiple platforms, including consoles, PC, and mobile devices. The company's revenue model includes direct sales of physical and digital copies of games, downloadable content (DLC), and in-game purchases. Additionally, Koei Tecmo earns money through licensing agreements and partnerships, which may involve collaborations with other media franchises or adaptations into other forms of entertainment such as anime or merchandise. Significant partnerships with hardware manufacturers and distribution platforms also contribute to its earnings by expanding its market reach. The company may also benefit from seasonal sales and promotional events that boost game sales.

Koei Tecmo Holdings Co., Ltd. Financial Statement Overview

Summary

Koei Tecmo Holdings Co., Ltd. exhibits strong financial health with robust revenue growth, high profitability, and effective cash flow management. The company maintains a low leverage profile, enhancing its financial stability. Minor areas for improvement include optimizing equity financing and addressing cost pressures.

Income Statement

Koei Tecmo Holdings Co., Ltd. has demonstrated strong revenue growth over the years, with a notable 9.38% increase in the most recent year. The company maintains high profitability with a consistent gross profit margin above 60% and a net profit margin around 45%. The EBIT and EBITDA margins also reflect strong operational efficiency. However, the slight decline in gross profit margin from previous years indicates potential cost pressures.

Balance Sheet

The company's balance sheet is robust, with a low debt-to-equity ratio, indicating prudent financial management and low leverage risk. The return on equity is healthy, reflecting efficient use of equity capital. However, the equity ratio suggests a moderate reliance on equity financing, which could be optimized further.

Cash Flow

Koei Tecmo Holdings shows strong cash flow management, with a high operating cash flow to net income ratio, indicating effective conversion of income into cash. The free cash flow growth has been impressive, although it experienced volatility in earlier years. The free cash flow to net income ratio is consistently high, underscoring solid cash generation relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	80.34B	83.15B	84.58B	78.42B	72.76B	60.37B
Gross Profit	49.63B	52.39B	55.30B	57.10B	50.60B	39.07B
EBITDA	41.96B	51.90B	30.31B	40.78B	36.08B	25.95B
Net Income	30.06B	37.63B	33.79B	30.93B	35.36B	29.55B
Balance Sheet
Total Assets	243.40B	209.83B	245.80B	210.89B	219.80B	190.67B
Cash, Cash Equivalents and Short-Term Investments	41.21B	44.49B	70.09B	20.61B	45.42B	17.23B
Total Debt	35.92B	467.00M	46.54B	47.34B	48.15B	41.00M
Total Liabilities	56.28B	20.41B	70.25B	68.20B	81.70B	25.54B
Stockholders Equity	187.12B	189.42B	175.55B	142.68B	138.10B	165.13B
Cash Flow
Free Cash Flow	0.00	32.82B	34.80B	28.80B	23.47B	28.14B
Operating Cash Flow	0.00	34.37B	36.60B	29.69B	24.82B	29.73B
Investing Cash Flow	0.00	40.97B	-24.86B	-21.39B	-13.17B	-12.29B
Financing Cash Flow	0.00	-63.17B	-15.47B	-16.59B	-4.56B	-19.40B

Koei Tecmo Holdings Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1905.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3635, the sentiment is Negative. The current price of 1905.5 is above the 20-day moving average (MA) of 1841.25, below the 50-day MA of 1936.31, and below the 200-day MA of 2105.16, indicating a bearish trend. The MACD of -56.18 indicates Positive momentum. The RSI at 26.50 is Positive, neither overbought nor oversold. The STOCH value of 23.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3635.

Koei Tecmo Holdings Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2432	78 Outperform	¥282.35B	6.44	17.98%	2.52%	34.16%	―
3635	76 Outperform	¥580.89B	15.38	―	2.49%	-1.05%	6.49%
9697	75 Outperform	¥1.49T	23.14	26.66%	1.17%	45.17%	81.91%
6460	68 Neutral	¥500.30B	28.98	4.45%	2.12%	-8.73%	-55.81%
3765	64 Neutral	¥142.01B	33.17	3.38%	2.38%	-3.12%	-63.07%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
9684	57 Neutral	¥993.58B	43.22	6.70%	1.80%	-12.02%	126.06%

Koei Tecmo Holdings Co., Ltd. Corporate Events

Koei Tecmo Posts Slight Sales Decline but Strengthens Balance Sheet, Keeps FY2026 Outlook and Dividend Plan

For the nine months ended 31 December 2025, Koei Tecmo reported a slight 1.6% year-on-year decline in net sales to ¥51.7 billion and lower operating profit of ¥14.6 billion, while ordinary profit and profit attributable to owners of parent also fell compared with the previous year. Despite softer earnings and a drop in basic EPS to ¥73.84, total assets and equity increased sharply, with the equity ratio at a solid 82.8% and net assets per share rising to ¥772.35, reflecting balance sheet reinforcement including a significant reduction in treasury shares. The company kept its full-year FY2026 guidance unchanged, forecasting ¥92.0 billion in net sales and a 28.2% decline in profit attributable to owners of parent to ¥27.0 billion, and plans to maintain shareholder returns with a forecast annual dividend of ¥43 per share, signaling a focus on capital efficiency and stable distributions even amid earnings pressure.

The most recent analyst rating on (JP:3635) stock is a Buy with a Yen2003.00 price target. To see the full list of analyst forecasts on Koei Tecmo Holdings Co., Ltd. stock, see the JP:3635 Stock Forecast page.