Nihon Falcom Corporation (3723) AI Stock Analysis

• Market Cap: ¥16.91B
• Dividend Yield: 1.25%
• Average Volume (3M): 30.66K
• Price to Earnings (P/E): 18.9
• Beta (1Y): 0.12
• Revenue Growth: 3.50%
• EPS Growth: 6.04%
• Country: JP
• Employees: 66
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 74.50
• Shares Outstanding: 10,280,000
• 10 Day Avg. Volume: 15,990
• 30 Day Avg. Volume: 30,656
• PEG Ratio: 0.00
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: 82 Outperform
• Price Target: ¥1,949.00 ▲(18.41% Upside)

The score is driven primarily by strong financial quality (exceptional margins and a debt-free, strengthening balance sheet). Technicals add support with a clear uptrend, though momentum indicators are somewhat stretched. Valuation is reasonable but not especially cheap, and the dividend yield is modest.

Positive Factors

Strong Margins

High margins indicate effective cost management and pricing power, which support profitability and competitive positioning over time.

Debt-Free Balance Sheet

A debt-free balance sheet provides financial flexibility and reduces risk, allowing the company to invest in growth opportunities without financial strain.

Revenue Growth

Recent revenue growth suggests successful product launches and market expansion, enhancing long-term revenue potential and market share.

Negative Factors

Uneven Revenue Trends

Inconsistent revenue trends can indicate challenges in sustaining product demand or market competition, potentially impacting long-term growth.

Cash Flow Volatility

Volatile cash flow can hinder strategic planning and investment, affecting the company's ability to fund new projects or weather downturns.

Declining Return on Equity

A declining return on equity may signal challenges in efficiently using equity capital to generate profits, potentially impacting investor confidence.

Nihon Falcom Corporation Business Overview & Revenue Model

Company Description

Nihon Falcom Corporation engages in the development and production of title game software in Japan and internationally. It also produces music and video titles; plans game software; sells game software and related products; and provides various licenses. The company was founded in 1981 and is headquartered in Tachikawa, Japan.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.29B	2.61B	2.52B	2.47B	2.53B	2.48B
Gross Profit	2.00B	2.30B	2.27B	2.23B	2.31B	2.27B
EBITDA	964.81M	1.35B	1.25B	1.34B	1.47B	1.42B
Net Income	658.68M	903.68M	852.21M	911.34M	1.03B	1.00B
Balance Sheet
Total Assets	10.38B	11.50B	10.70B	10.13B	9.69B	8.29B
Cash, Cash Equivalents and Short-Term Investments	9.84B	10.35B	9.54B	8.90B	8.21B	7.17B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	272.31M	618.02M	523.90M	595.79M	863.49M	593.76M
Stockholders Equity	10.11B	10.88B	10.18B	9.53B	8.83B	7.70B
Cash Flow
Free Cash Flow	0.00	1.01B	846.50M	898.04M	1.24B	38.65M
Operating Cash Flow	0.00	1.01B	848.36M	903.62M	1.24B	102.49M
Investing Cash Flow	0.00	-742.00K	-1.86M	-5.58M	-1.43M	52.74M
Financing Cash Flow	0.00	-204.90M	-204.88M	-204.85M	-204.61M	-122.77M

Nihon Falcom Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1646.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 1646 is above the 20-day moving average (MA) of 1631.35, above the 50-day MA of 1535.38, and above the 200-day MA of 1325.49, indicating a bullish trend. The MACD of 37.79 indicates Positive momentum. The RSI at 58.47 is Neutral, neither overbought nor oversold. The STOCH value of 40.35 is Neutral, 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
3723	82 Outperform	¥16.91B	18.88	―	1.25%	3.50%	6.04%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3656	56 Neutral	¥28.27B	-3.62	―	―	-14.71%	-38.87%
3851	51 Neutral	¥4.10B	-19.54	―	0.64%	-13.35%	-258.79%
3911	48 Neutral	¥10.70B	5.87	―	―	11.15%	―
3758	46 Neutral	¥6.14B	-136.95	―	1.70%	-22.98%	83.75%
3903	46 Neutral	¥19.50B	6.65	―	―	-37.68%	―