AGS Corporation (3648) AI Stock Analysis

• Market Cap: ¥21.15B
• Dividend Yield: 2.4%
• Average Volume (3M): 41.20K
• Price to Earnings (P/E): 10.4
• Beta (1Y): 0.72
• Revenue Growth: 21.57%
• EPS Growth: 129.44%
• Country: JP
• Employees: 1,050
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 27.95
• Shares Outstanding: 17,158,731
• 10 Day Avg. Volume: 73,560
• 30 Day Avg. Volume: 41,196
• PEG Ratio: 0.19
• Price to Book (P/B): 0.94
• Price to Sales (P/S): 0.56
• P/FCF Ratio: 35.78
• 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: 74 Outperform
• Price Target: ¥1,456.00 ▲(10.47% Upside)
• Action: Reiterated Date: 02/05/26
• Date: Action: Reiterated 02/05/26

The score is primarily driven by strong financial performance (good growth, improving margins, and a low-leverage balance sheet), supported by an attractive valuation (low P/E and a 2.46% dividend yield). These positives are partially offset by weaker technicals (price below key moving averages and low RSI), and cash-flow metrics that show recent deterioration in free cash flow growth.

Positive Factors

Revenue & Margin Expansion

Consistent top-line growth with simultaneous margin improvement indicates effective pricing and cost control. Durable revenue expansion plus rising net and gross margins suggest the business can scale profitably, improving long-term cash generation potential if trends persist.

Low Leverage / Strong Capital Structure

A very low debt load and high equity ratio provide balance sheet flexibility to withstand downturns, invest in growth, or pursue strategic M&A. Healthy ROE with conservative leverage reduces refinancing and interest risk, supporting durable financial resilience.

Improving Operating Efficiency

Rising operating margins and positive EBIT/EBITDA trends indicate improving cost structure and scalability. Sustained operating efficiency strengthens competitive positioning in software/services, enabling reinvestment and margin durability across business cycles.

Negative Factors

Sharp Free Cash Flow Decline

A large drop in free cash flow growth signals weakening ability to convert profits into discretionary cash. Over time this undermines capacity for capex, dividends, debt paydown or M&A funding and raises sensitivity to any future profit volatility.

Weak Cash Conversion

Subpar conversion of reported earnings into operating and free cash suggests working capital and timing issues or capital intensity. Persistently low cash conversion constrains internal funding for growth and increases reliance on external financing over the medium term.

Modest Absolute Profitability

Although margins are improving, a mid-single-digit net margin leaves limited buffer against cost shocks or pricing pressure. Lower absolute profitability can restrict reinvestment capacity and makes long-term returns more sensitive to competitive or macro headwinds.

AGS Corporation Business Overview & Revenue Model

Company Description

AGS Corporation provides information technology services to the financial industry, public sectors, and enterprises in Japan. It offers mainframe-based contracted calculation services; and peripheral services, such as data entry, printing, and delivery. The company also provides software development services, including consultations, planning, design, development, and maintenance support of systems. In addition, it markets and installs system products packages; sells computers and peripheral equipment; and offers Internet data center and security services. AGS Corporation was founded in 1971 and is headquartered in Saitama, Japan.

How the Company Makes Money

AGS Corporation generates revenue through multiple streams, including the sale of its core products such as sensors and electronic components to various industries. The company benefits from long-term contracts and partnerships with major players in the automotive and electronics sectors, ensuring a steady demand for its products. Additionally, AGS engages in research and development to create cutting-edge technologies that enhance product offerings and open new markets. The company also profits from providing tailored solutions and services to meet specific customer requirements, thereby increasing its value proposition and customer loyalty.

AGS Corporation Financial Statement Overview

Summary

Strong fundamentals overall: revenue grew 12.53% YoY with improving profitability (net margin up to 5.55%) and healthy operating efficiency. Balance sheet is solid with low leverage (debt-to-equity 0.11) and a high equity ratio (67.95%). Cash flow is the main soft spot, with weaker conversion (OCF/net income 0.54) and a sharp decline in free cash flow growth (-77.23%).

Income Statement

AGS Corporation demonstrates strong revenue growth with a 12.53% increase in 2025 compared to 2024. Gross profit margin remains robust at 24.8%, while net profit margin improved to 5.55%, indicating increasing profitability. The EBIT and EBITDA margins also show positive trends, suggesting efficient cost management and operational strength.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.11, reflecting prudent financial management. The ROE is healthy at 9.41%, indicating effective use of equity to generate profits. The equity ratio is strong at 67.95%, highlighting a stable financial structure with a significant portion of assets funded by equity.

Cash Flow

Operating cash flow to net income ratio of 0.54 shows adequate conversion of earnings into cash. However, free cash flow growth rate declined by 77.23% in 2025, suggesting potential challenges in cash generation. The free cash flow to net income ratio stands at 0.28, indicating room for improvement in cash flow management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	28.67B	24.86B	22.09B	21.07B	21.19B	20.95B
Gross Profit	7.45B	6.16B	5.35B	4.47B	4.57B	4.34B
EBITDA	4.17B	3.15B	2.72B	2.28B	2.29B	2.04B
Net Income	2.09B	1.38B	936.47M	682.48M	638.17M	497.04M
Balance Sheet
Total Assets	21.89B	21.58B	20.82B	20.12B	18.60B	19.13B
Cash, Cash Equivalents and Short-Term Investments	5.73B	5.69B	6.59B	5.88B	5.40B	4.54B
Total Debt	1.45B	1.65B	2.05B	2.06B	1.38B	1.55B
Total Liabilities	6.14B	6.92B	6.97B	6.68B	5.69B	6.62B
Stockholders Equity	15.75B	14.66B	13.85B	13.44B	12.91B	12.50B
Cash Flow
Free Cash Flow	1.05B	386.01M	1.70B	1.09B	1.58B	1.05B
Operating Cash Flow	1.28B	742.04M	2.51B	1.71B	2.12B	1.75B
Investing Cash Flow	-286.04M	-608.45M	-595.27M	-475.22M	-518.83M	-702.38M
Financing Cash Flow	-949.03M	-1.03B	-1.20B	-756.48M	-744.15M	-699.29M

AGS Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1318.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3648, the sentiment is Negative. The current price of 1318 is above the 20-day moving average (MA) of 1252.30, below the 50-day MA of 1319.14, and above the 200-day MA of 1220.05, indicating a neutral trend. The MACD of -24.32 indicates Negative momentum. The RSI at 43.00 is Neutral, neither overbought nor oversold. The STOCH value of 68.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3648.

AGS Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4333	81 Outperform	¥21.88B	16.24	―	3.86%	0.50%	17.15%
3771	77 Outperform	¥30.44B	12.82	―	2.93%	11.53%	23.23%
3835	75 Outperform	¥19.44B	17.06	―	3.14%	0.50%	-2.92%
3648	74 Outperform	¥21.15B	10.37	―	2.40%	21.57%	129.44%
3921	74 Outperform	¥24.42B	14.16	―	2.53%	16.13%	62.27%
3853	70 Outperform	¥20.58B	19.00	―	0.82%	―	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%