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KLab Inc. (JP:3656)
:3656
Japanese Market

KLab Inc. (3656) AI Stock Analysis

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JP:3656

KLab Inc.

(3656)

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Neutral 56 (OpenAI - 5.2)
Rating:56Neutral
Price Target:
¥371.00
▼(-1.85% Downside)
KLab Inc.'s stock score is primarily driven by strong technical indicators, suggesting bullish momentum. However, significant financial challenges and poor valuation metrics weigh heavily on the overall score.
Positive Factors
Strong capital structure
A low debt-to-equity ratio and a 65.7% equity ratio provide financial resilience. This durable capital structure reduces refinancing risk, supports investment in live-ops and new titles, and gives flexibility to absorb operating losses while pursuing strategic partnerships.
Recurring freemium monetization
A freemium model with in-app purchases creates recurring, high-margin digital revenue driven by engaged users. This business model scales without inventory, supports long-tail monetization from live services, and aligns incentives for ongoing content investment and community retention.
Strong franchise tie-ins
Deep experience developing licensed anime/manga games builds a durable competitive advantage: loyal fanbases, higher lifetime value, and marketing efficiency. Franchise linkage supports cross-promotion and long product lives, smoothing revenue volatility over multiple release cycles.
Negative Factors
Sharply declining revenue
A multi-year top-line contraction materially reduces scale economics and bargaining power with licensors and platforms. Sustained revenue decline undermines R&D and marketing budgets needed to keep live-service games competitive, raising risk of further market share loss.
Consistent negative free cash flow
Persistent negative free cash flow and weak cash conversion limit the company's ability to self-fund new development or user acquisition. Over months this forces reliance on external financing, increases vulnerability to funding shocks, and constrains strategic flexibility.
Margin deterioration and losses
Falling gross margins and ongoing negative net income signal structural cost or monetization issues. Reduced profitability erodes reinvestment capacity for content, weakens ability to sustain live-ops incentives, and increases risk that scale advantages cannot be regained without strategic change.

KLab Inc. (3656) vs. iShares MSCI Japan ETF (EWJ)

KLab Inc. Business Overview & Revenue Model

Company DescriptionKLab Inc., together with its subsidiaries, plans, develops, operates, and publishes online mobile games worldwide. The company offers game titles, such as BLEACH Brave Souls, BLEACH Soul Rising, Tales of Crestria, Captain Tsubasa: Dream Team, Love Live! School Idol Festival ALL STARS, etc. KLab Inc. was founded in 2000 and is based in Tokyo, Japan.
How the Company Makes MoneyKLab Inc. generates revenue primarily through in-app purchases within its mobile games, where players can buy virtual goods, characters, and enhancements to improve their gaming experience. This freemium model allows users to download games for free while monetizing through optional purchases. Additionally, KLab earns revenue from partnerships with anime and media franchises, leveraging licensing agreements that enhance game visibility and player engagement. Furthermore, the company may also benefit from advertising revenue, event sponsorships, and merchandise sales associated with its popular game titles.

KLab Inc. Financial Statement Overview

Summary
KLab Inc. faces substantial financial challenges, with declining revenues, persistent losses, and negative cash flows. Despite a strong equity base, the ongoing operational losses and cash flow issues pose significant risks. The company needs to address its revenue decline and improve operational efficiency to stabilize and enhance its financial health.
Income Statement
KLab Inc. has experienced a significant decline in total revenue over the past five years, from JPY 33.95 billion in 2020 to JPY 8.31 billion in 2024. The company has also faced persistent losses, with negative net income and EBIT margins, indicating challenges in achieving profitability. The gross profit margin has decreased significantly from 20.6% in 2020 to 13.6% in 2024, reflecting cost pressures and declining sales efficiency.
Balance Sheet
The company's balance sheet shows a relatively strong equity position, with a debt-to-equity ratio of 0.21 in 2024, which indicates moderate leverage. However, equity has decreased over the years, reflecting accumulated losses. The equity ratio remains healthy at 65.7%, suggesting a strong capital structure despite the financial challenges.
Cash Flow
KLab Inc. has been generating negative free cash flow consistently, with significant operating cash outflows and no substantial capital expenditures to offset these losses. The operating cash flow to net income ratio remains below 1, indicating a lack of cash flow generation relative to reported losses. The free cash flow to net income ratio also highlights the inability to convert income into cash flow, signaling liquidity concerns.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue7.84B8.31B10.72B16.88B23.90B33.95B
Gross Profit1.31B1.13B1.75B3.02B2.72B6.99B
EBITDA-5.11B-1.94B-1.21B-33.52M-1.92B2.89B
Net Income-6.19B-2.78B-1.82B-541.92M-3.47B767.18M
Balance Sheet
Total Assets10.94B15.78B17.75B20.86B18.71B23.49B
Cash, Cash Equivalents and Short-Term Investments1.84B1.61B2.21B6.02B4.75B8.62B
Total Debt1.13B2.22B3.18B3.51B1.00B1.75B
Total Liabilities4.08B5.41B6.05B7.71B5.90B6.91B
Stockholders Equity6.86B10.37B11.71B13.15B12.81B16.58B
Cash Flow
Free Cash Flow0.00-2.06B-4.36B-2.84B-2.73B3.03B
Operating Cash Flow0.00-138.22M-1.53B-186.97M-1.28B3.98B
Investing Cash Flow0.00-1.05B-2.33B-1.36B-1.93B-2.34B
Financing Cash Flow0.00555.11M-66.94M3.54B-1.04B318.34M

KLab Inc. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price378.00
Price Trends
50DMA
299.26
Positive
100DMA
248.74
Positive
200DMA
184.20
Positive
Market Momentum
MACD
17.64
Positive
RSI
54.77
Neutral
STOCH
51.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3656, the sentiment is Positive. The current price of 378 is above the 20-day moving average (MA) of 361.65, above the 50-day MA of 299.26, and above the 200-day MA of 184.20, indicating a neutral trend. The MACD of 17.64 indicates Positive momentum. The RSI at 54.77 is Neutral, neither overbought nor oversold. The STOCH value of 51.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3656.

KLab Inc. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
¥16.91B18.881.25%3.50%6.04%
60
Neutral
$48.67B4.58-11.27%4.14%2.83%-41.78%
56
Neutral
¥28.27B-3.62-14.71%-38.87%
48
Neutral
¥10.70B5.8711.15%
46
Neutral
¥6.14B-136.951.70%-22.98%83.75%
46
Neutral
¥19.50B6.65-37.68%
42
Neutral
¥12.11B-5.0093.85%-216.24%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:3656
KLab Inc.
360.00
223.00
162.77%
JP:3723
Nihon Falcom Corporation
1,660.00
356.28
27.33%
JP:3758
Aeria Inc.
294.00
52.36
21.67%
JP:3793
Drecom Co., Ltd.
413.00
-456.00
-52.47%
JP:3903
gumi, Inc.
378.00
-8.00
-2.07%
JP:3911
Aiming, Inc.
227.00
18.00
8.61%

KLab Inc. Corporate Events

KLab Regains Compliance With TSE Prime Listing Criteria as New Businesses Lift Market Cap
Jan 13, 2026

KLab Inc. announced that, based on its shareholder register as of December 31, 2025, its tradable share market capitalization now meets the Tokyo Stock Exchange’s criteria for maintaining a Prime Market listing, following a period in which it had fallen short and was operating under a remedial plan through the end of 2026. The company reported significant improvements in key listing metrics, including an increase in tradable share market capitalization to ¥16.11 billion and higher liquidity, while its total market capitalization has risen to ¥29 billion, supported by progress in new game titles, the introduction of a new management structure, and the launch of AI-focused businesses and large-scale financing initiatives, positioning KLab for profitability and enhanced corporate value in the coming fiscal year.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen415.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Finalizes Terms for Performance-Linked Stock Options to Executives and Staff
Dec 26, 2025

KLab Inc. has finalized the terms for its 24th series of stock acquisition rights, a paid-in stock option program tied to market capitalization and performance targets, to be granted to directors and selected employees. The issuance comprises 20,000 rights corresponding to 2,000,000 common shares, with the bulk allocated to the representative director and president, and the remainder to other directors and key employees, underscoring the company’s emphasis on performance-linked executive compensation and alignment of management and staff incentives with shareholder interests.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen417.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Signs MoU with UAE’s Century Financial to Bolster Middle East IR Efforts
Dec 26, 2025

KLab Inc. has signed a Memorandum of Understanding with United Arab Emirates-based Century Financial Consultancy LLC to promote investor relations activities and explore business collaboration in both the UAE and Japanese markets, with a broader focus on the Middle East. By leveraging Century’s networks among high-net-worth individuals and major institutional investors, KLab aims to accelerate its IR efforts, enhance its name recognition, and deepen relationships with local investors and business partners across the region, although the company currently expects only a minor impact on its consolidated financial results from this agreement.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen417.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Raises ¥2.9 Billion Through Third-Party Share and Warrant Issuance
Dec 23, 2025

KLab Inc. has completed payment for the issuance of new shares and its 23rd series of stock acquisition rights through a third-party allotment to several institutional investors, raising a total of approximately 2.91 billion yen. The company issued 13.75 million new common shares in two tranches to ULTIMATE CLASSIC INVESTMENT LLC, Sun* Inc., JT Financial Limited Liability Partnership, and Six Cents Holdings Ltd., and allotted 107,500 stock acquisition rights to UCI and JT Financial, which could result in up to 10.75 million additional shares upon exercise between December 24, 2025, and December 23, 2027. This sizeable equity and potential future equity financing enhances KLab’s capital base, providing funds that can support its operational and strategic initiatives, while also signaling continued backing from financial and strategic investors despite the dilutive impact on existing shareholders.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen417.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Announces Investor Briefing on Strategic Developments
Dec 15, 2025

KLab Inc. is set to hold an online briefing session for investors and analysts to discuss its recently announced financing and dual gold treasury strategy, as well as future business development and investor relations strategies. This session, led by Representative Director and President Tetsuya Sanada, aims to provide clarity on the company’s strategic direction and engage stakeholders through a Q&A session.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen417.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Amends Stock Issuance Procedures for Operational Efficiency
Dec 12, 2025

KLab Inc. announced amendments to its previously disclosed plans regarding the issuance of new shares and stock acquisition rights. The company has shifted from a book-entry transfer method to a non-book-entry transfer method for its 23rd Stock Acquisition Rights to streamline issuance procedures, indicating a strategic move to enhance operational efficiency.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen313.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Issues Corrections to Financial Announcements
Dec 9, 2025

KLab Inc. announced corrections to its previously released ‘Supplementary Explanatory Materials on Financing and Related Announcements’ due to an incorrect description. These corrections pertain to the allotment details of new shares and stock acquisition rights, impacting the company’s financial disclosures and potentially affecting shareholder information.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen234.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Announces New Shares and Stock Acquisition Rights Issuance
Dec 8, 2025

KLab Inc. has announced a strategic move to issue new shares and stock acquisition rights through a third-party allotment, involving investors such as ULTIMATE CLASSIC INVESTMENT LLC, Six Cents Holdings Ltd., Sun* Inc., and JT Financial Limited Liability Partnership. This financing initiative is expected to alter the company’s principal shareholder structure, potentially impacting its market positioning and stakeholder dynamics.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen234.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Issues Stock Options to Drive Market Recovery and Business Growth
Dec 5, 2025

KLab Inc. has announced the issuance of market capitalization and performance target achievement-type paid-in stock options to its directors and employees as part of a strategic effort to recover its market capitalization and return to profitability. The company aims to motivate its workforce by setting ambitious targets, including a market capitalization of 20 billion yen and the establishment of new businesses, to enhance corporate and shareholder value. This move is part of a broader strategy to restructure its business portfolio and secure revenue from both existing and new ventures.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen234.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Forms Strategic Alliance with UAE-Backed Investment Firm
Dec 5, 2025

KLab Inc. has entered into a capital and business alliance with ULTIMATE CLASSIC INVESTMENT LLC, an investment firm backed by UAE royal family members, to strengthen its financial base and launch a blockchain-related business. This partnership aims to leverage UCI’s expertise in crypto asset management and Middle Eastern markets, with H.H. Sheikh Salem Khaled Humaid Mohamed Al Qasimi serving as an advisor, though the immediate financial impact is expected to be minor.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen234.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Forms Strategic Alliance with Sun* Inc. to Boost Game Development
Dec 5, 2025

KLab Inc. has entered into a capital and business alliance with Sun* Inc. to strengthen their existing partnership. This agreement aims to utilize Sun* Inc.’s resources to enhance KLab’s mobile online game development, potentially leading to business growth and increased corporate value, although the immediate financial impact is expected to be minor.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen234.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Completes Large-Scale Stock Acquisition Rights Exercise
Nov 12, 2025

KLab Inc. announced the completion of the large-scale exercise of its 19th series of Stock Acquisition Rights, issued in April 2024. This exercise, which concluded in November 2025, involved the issuance of 2,289,900 shares, representing 22.67% of the total issued rights. The successful completion of this exercise reflects the company’s strategic financial maneuvers and could potentially impact its market positioning and shareholder value.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen230.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Reports Revenue Decline and Strategic Adjustments in Q3 FY2025
Nov 11, 2025

KLab Inc. reported a decline in revenue and a significant loss for the third quarter of FY2025, with revenue dropping by 18.6% compared to the same period last year. The company also noted changes in its subsidiaries and adjustments in accounting policies, indicating ongoing strategic shifts and challenges in its financial performance.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen230.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Diversifies with Bitcoin Investment
Nov 11, 2025

KLab Inc. has completed a purchase of bitcoin as part of its management strategy to diversify and preserve long-term assets. This move reflects the company’s intention to explore crypto assets and blockchain technology, despite the inherent risks, and could impact its financial results based on market value assessments.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen230.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

KLab Inc. Grants Exercise Permission for Stock Acquisition Rights
Oct 27, 2025

KLab Inc. has granted Macquarie Bank Limited permission to exercise its 19th Stock Acquisition Rights, which were issued in April 2024. This decision allows for the potential issuance of common stock, impacting the company’s financial operations and market positioning by potentially altering its share structure.

The most recent analyst rating on (JP:3656) stock is a Hold with a Yen247.00 price target. To see the full list of analyst forecasts on KLab Inc. stock, see the JP:3656 Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Dec 13, 2025