Nihon Falcom Corporation (3723) AI Stock Analysis

• Market Cap: ¥12.01B
• Dividend Yield: 1.71%
• Average Volume (3M): 11.41K
• Price to Earnings (P/E): 22.3
• Beta (1Y): 0.09
• Revenue Growth: -21.03%
• EPS Growth: -42.64%
• Country: JP
• Employees: 66
• Sector: Communication Services
• Sector Strength: 84
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): -3.59
• Shares Outstanding: 10,280,000
• 10 Day Avg. Volume: 3,890
• 30 Day Avg. Volume: 11,413
• PEG Ratio: 4.59
• Price to Book (P/B): 1.46
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.41
• 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

• Rating: 68 Neutral
• Price Target: ―

Nihon Falcom Corporation shows strong financial performance, particularly in profitability and balance sheet strength, with minimal liabilities. However, technical analysis suggests the stock is currently underperforming, influenced by downward trends across major moving averages. The valuation is reasonable, making the stock moderately attractive. While the absence of free cash flow growth poses a concern, the company's long-term financial health remains solid.

Nihon Falcom Corporation Business Overview & Revenue Model

Company Description

Nihon Falcom Corporation, listed on the Tokyo Stock Exchange under the symbol 3723, is a Japanese video game developer and publisher known for its role-playing game (RPG) series. Founded in 1981 and headquartered in Tachikawa, Tokyo, the company has been a pioneer in the development of JRPGs, with flagship franchises such as 'Ys,' 'The Legend of Heroes,' and 'Trails.' Nihon Falcom is recognized for its engaging storytelling, character development, and musical compositions in its games, which have garnered a dedicated fanbase both domestically and internationally.

How the Company Makes Money

Nihon Falcom Corporation generates revenue primarily through the development and sale of video games. The company's key revenue streams include direct sales of their games through various platforms such as consoles and PC, digital downloads, and physical copies. Additionally, they benefit from licensing agreements and partnerships for the distribution of their games outside Japan, often collaborating with international publishers to reach global markets. The sales of soundtracks and merchandise based on their popular game franchises also contribute to their earnings. Moreover, the company may engage in strategic partnerships and collaborations to enhance their product offerings and expand their market reach, further bolstering their revenue.

Nihon Falcom Corporation Financial Statement Overview

Summary

Nihon Falcom Corporation presents a robust financial profile with exceptional profitability and strong balance sheet metrics. The income statement is strong with solid profit margins, and the balance sheet is exceptionally stable with no debt. However, the cash flow statement shows some short-term challenges, notably the absence of free cash flow growth in the TTM, though there is potential for future cash generation based on historical performance.

Income Statement

Nihon Falcom Corporation demonstrates strong profitability with solid gross and net profit margins. TTM data shows a gross profit margin of 87.91% and a net profit margin of 28.75%. Although there is a decline in revenue compared to the last annual report, the company maintains stable EBIT and EBITDA margins. Overall, the income statement reflects robust profitability despite minor revenue fluctuations.

Balance Sheet

The balance sheet is remarkably strong, with a significant equity ratio of 97.14% in TTM, indicating financial stability and low leverage, as the company carries no debt. The high equity to asset ratio suggests a strong capital position, enhancing the company's ability to withstand financial fluctuations. This highlights exceptional financial health and minimal risk from liabilities.

Cash Flow

The cash flow statement indicates a lack of free cash flow growth, with reported TTM free cash flow being zero. However, the company has maintained positive free cash flow in previous periods, indicating potential for future cash generation. The operating cash flow to net income ratio is not available for TTM due to missing values, but annual data shows robust cash flow generation. This suggests short-term cash flow management challenges but generally positive long-term cash flow health.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	2.20B	2.52B	2.47B	2.53B	2.48B	2.50B
Gross Profit	1.94B	2.27B	2.23B	2.31B	2.27B	2.13B
EBITDA	889.81M	1.25B	1.34B	1.47B	1.42B	1.36B
Net Income	633.87M	852.21M	911.34M	1.03B	1.00B	875.72M
Balance Sheet
Total Assets	10.35B	10.70B	10.13B	9.69B	8.29B	7.68B
Cash, Cash Equivalents and Short-Term Investments	9.73B	9.54B	8.90B	8.21B	7.17B	7.14B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	295.00M	523.90M	595.79M	863.49M	593.76M	860.89M
Stockholders Equity	10.05B	10.18B	9.53B	8.83B	7.70B	6.82B
Cash Flow
Free Cash Flow	0.00	846.50M	898.04M	1.24B	38.65M	1.70B
Operating Cash Flow	0.00	848.36M	903.62M	1.24B	102.49M	1.71B
Investing Cash Flow	0.00	-1.86M	-5.58M	-1.43M	52.74M	-27.92M
Financing Cash Flow	0.00	-204.88M	-204.85M	-204.61M	-122.77M	-122.98M

Nihon Falcom Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1180.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3723, the sentiment is Positive. The current price of 1180 is above the 20-day moving average (MA) of 1158.30, above the 50-day MA of 1161.18, and above the 200-day MA of 1144.39, indicating a bullish trend. The MACD of 5.61 indicates Positive momentum. The RSI at 50.96 is Neutral, neither overbought nor oversold. The STOCH value of 10.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3723.

Nihon Falcom Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9697	81 Outperform	$1.86T	38.36	22.64%	0.98%	11.28%	11.70%
9684	70 Outperform	¥1.21T	49.81	7.32%	0.85%	0.58%	-56.67%
6460	70 Outperform	¥641.22B	15.82	11.92%	1.51%	-8.32%	39.87%
7974	69 Neutral	$15.26T	54.75	10.29%	1.24%	-27.51%	-35.35%
3723	68 Neutral	¥12.01B	22.26		1.71%	-21.03%	-42.64%
Sector *	66 Neutral	¥372.81B	13.63	2.32%	2.51%	5.41%	-17.67%
9766	65 Neutral	¥2.78T	37.22	16.43%	0.97%	17.01%	26.23%