CERES INC. (3696) AI Stock Analysis

• Market Cap: ¥20.93B
• Dividend Yield: 2.88%
• Average Volume (3M): 308.36K
• Price to Earnings (P/E): 6.9
• Beta (1Y): 1.50
• Revenue Growth: 10.23%
• EPS Growth: 152.86%
• Country: JP
• Employees: 669
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): 72.73
• Shares Outstanding: 12,116,500
• 10 Day Avg. Volume: 204,940
• 30 Day Avg. Volume: 308,363
• PEG Ratio: 0.11
• Price to Book (P/B): 3.20
• Price to Sales (P/S): 1.29
• P/FCF Ratio: 89.81
• 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: 64 Neutral
• Price Target: ¥1,948.00 ▲(0.26% Upside)

The overall stock score reflects strong financial performance with robust revenue growth and profitability. However, technical indicators suggest bearish momentum, which is a significant risk factor. The valuation is reasonable, providing some support to the stock's attractiveness.

Positive Factors

Revenue Growth

Sustained ~15% revenue growth indicates expanding end-market demand and successful commercial execution. Over a multi-quarter horizon this growth supports scale economies, funds reinvestment and product development, and underpins durable top-line momentum versus peers.

Improving Profitability Margins

Rising gross and EBIT margins point to stronger pricing power and operating efficiency. Higher structural margins improve cash generation capacity, increase resilience to cost inflation, and create room for continued investment in competitive differentiation over the medium term.

Balanced Capital Structure and Returns

A moderate leverage profile combined with a double-digit ROE suggests prudent financing and effective equity utilization. This balance supports strategic investments while limiting refinancing stress, preserving financial flexibility across several quarters of execution risk.

Negative Factors

Weak Cash Conversion

An OCF-to-net-income ratio below 0.5 signals persistent cash conversion weakness versus reported earnings. Structurally poor cash conversion can constrain capex, dividends and deleveraging, forcing reliance on external funding and increasing long-term financing risk.

Declining Free Cash Flow

A sharp decline in FCF and low FCF-to-net-income ratio reduces internal funding for growth, dividends, and debt reduction. If this trend persists, management may need to cut investments or raise external capital, weakening medium-term strategic optionality and margin of safety.

Modest Net Profit Margin

A single-digit net margin limits retained earnings and buffers against downturns. Structurally low net profitability makes the business more sensitive to cost shocks or pricing pressure, restricting long-term reinvestment capacity and the pace of sustainable shareholder returns.

CERES INC. Business Overview & Revenue Model

Company Description

Ceres Inc. engages in the mobile and financial services in Japan. The company offers smartphone advertising media services with point site name Moppy that provides its users with given points that can be exchanged for cash or electronic money; and content media, which operates sites in various fields, such as smartphone games and real estate for investment, as well as provides the latest information. It also provides cryptocurrency/blockchain related, online factoring, and investment development services. The company was incorporated in 2005 and is based in Tokyo, Japan.

How the Company Makes Money

CERES INC. generates revenue through a combination of digital advertising services, media management, and digital content delivery. The company earns money by providing advertising solutions that help businesses increase their visibility and customer engagement through mobile and online platforms. Key revenue streams include fees from advertising placements, media management services, and content distribution. Additionally, CERES INC. may establish partnerships with other technology and media companies to enhance its service offerings and reach a broader audience, thereby contributing to its earnings.

CERES INC. Financial Statement Overview

Summary

CERES INC. shows strong revenue growth and improving profitability margins. The company maintains a balanced capital structure with prudent debt levels. However, cash flow management needs improvement, particularly in cash conversion efficiency.

Income Statement

CERES INC. demonstrates strong financial performance with consistent revenue growth and improving profitability. The gross profit margin has increased to 48.1%, and the net profit margin has improved to 5.3% over the past year. Revenue growth rate is impressive at 15.1% from the previous year, indicating robust top-line expansion. EBIT margin is also solid at 8.0%, reflecting efficient operations.

Balance Sheet

The balance sheet shows a healthy equity base with a debt-to-equity ratio of 0.85, indicating balanced leverage. Return on Equity (ROE) is fairly strong at 13.3%, demonstrating effective utilization of equity. The equity ratio stands at 33.8%, reflecting moderate financial stability. Despite increased liabilities, the company maintains a cautious approach to debt.

Cash Flow

CERES INC.'s cash flow statements reveal a decline in operating cash flow to net income ratio, now at 0.49, suggesting potential inefficiencies in cash generation. However, free cash flow remains positive, albeit with a negative growth rate of -28.8%, indicating room for improvement in cash management. Free cash flow to net income ratio is at 0.27, showing modest cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	30.41B	27.71B	24.07B	20.54B	23.40B	20.21B
Gross Profit	13.85B	13.34B	10.59B	8.06B	7.77B	6.25B
EBITDA	5.35B	2.88B	1.33B	1.12B	4.32B	1.76B
Net Income	2.36B	1.48B	451.15M	46.61M	2.78B	744.60M
Balance Sheet
Total Assets	32.28B	32.98B	25.92B	22.60B	20.23B	16.23B
Cash, Cash Equivalents and Short-Term Investments	13.19B	14.13B	11.09B	9.29B	9.14B	7.89B
Total Debt	7.56B	9.52B	7.36B	5.89B	4.22B	3.82B
Total Liabilities	19.60B	20.25B	15.87B	12.90B	10.41B	9.14B
Stockholders Equity	12.05B	11.15B	9.19B	8.88B	9.08B	6.52B
Cash Flow
Free Cash Flow	1.26B	397.00M	557.52M	-314.19M	983.77M	1.86B
Operating Cash Flow	1.32B	722.00M	1.06B	101.78M	1.16B	2.26B
Investing Cash Flow	776.00M	-518.00M	-738.91M	-1.69B	-787.23M	-482.52M
Financing Cash Flow	-2.85B	3.27B	1.23B	1.19B	408.15M	363.41M

CERES INC. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1943.00
• 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:3696, the sentiment is Negative. The current price of 1943 is above the 20-day moving average (MA) of 1905.20, below the 50-day MA of 1960.88, and below the 200-day MA of 2160.03, indicating a bearish trend. The MACD of -43.97 indicates Positive momentum. The RSI at 33.79 is Neutral, neither overbought nor oversold. The STOCH value of 12.38 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3696.

CERES INC. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2462	75 Outperform	¥29.07B	12.54	―	3.90%	5.66%	-10.44%
4439	75 Outperform	¥32.59B	13.68	―	0.91%	21.54%	-6.60%
9248	67 Neutral	¥13.78B	8.67	―	3.88%	15.50%	―
4685	66 Neutral	¥48.71B	12.57	―	2.70%	17.96%	30.46%
3696	64 Neutral	¥20.93B	6.90	―	2.88%	10.23%	152.86%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
9564	62 Neutral	¥14.52B	21.80	―	1.11%	21.85%	13.02%

CERES INC. Corporate Events

CERES Board Effectiveness Review Confirms Strong Governance While Setting New Improvement Priorities

CERES INC. reported the results of its latest evaluation of Board of Directors effectiveness, conducted via a detailed self-assessment questionnaire completed by all nine directors and covering areas such as board composition, operations, discussion quality, monitoring, and sustainability and human capital. The board received generally high scores across all categories, with an overall average of 4.38 out of 5, reflecting improvements from prior-year initiatives including the appointment of an additional independent outside director with technology and branding expertise and efforts to secure more time and depth for strategic discussions. Despite confirming that board effectiveness is at an appropriate level, the company identified priority issues for the coming year, including further raising the rigor of discussions on critical matters, strengthening group governance and monitoring of subsidiaries, and better integrating sustainability and human capital into board agendas, alongside concrete next steps such as enhancing risk-based decision-making, standardizing subsidiary reporting, improving materials distribution, and potentially upgrading evaluations through third-party involvement.

The most recent analyst rating on (JP:3696) stock is a Hold with a Yen2315.00 price target. To see the full list of analyst forecasts on CERES INC. stock, see the JP:3696 Stock Forecast page.

CERES INC. Strengthens Alliance with CyberBuzz, Inc.

CERES INC. announced its decision to designate CyberBuzz, Inc. as an equity-method affiliate following the acquisition of a 19.14% equity interest and a strategic alliance formed in June 2025. This move is expected to enhance CERES INC.’s influence over CyberBuzz’s financial and operational policies. The partnership aims to leverage both companies’ strengths in media operations, advertising, and data analytics to enhance competitiveness and create new revenue opportunities in the expanding influencer marketing market in Japan.

The most recent analyst rating on (JP:3696) stock is a Hold with a Yen2315.00 price target. To see the full list of analyst forecasts on CERES INC. stock, see the JP:3696 Stock Forecast page.