Keyware Solutions Inc. (3799) AI Stock Analysis

• Market Cap: ¥9.27B
• Dividend Yield: 4.16%
• Average Volume (3M): 8.14K
• Price to Earnings (P/E): 15.2
• Beta (1Y): 0.72
• Revenue Growth: 4.52%
• EPS Growth: 51.81%
• Country: JP
• Employees: 1,272
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 33.03
• Shares Outstanding: 9,110,000
• 10 Day Avg. Volume: 6,850
• 30 Day Avg. Volume: 8,143
• PEG Ratio: 0.14
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.28
• P/FCF Ratio: -10.17
• 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: 65 Neutral
• Price Target: ¥1,290.00 ▲(21.81% Upside)
• Action: Downgraded Date: 03/06/26
• Date: Action: Downgraded 03/06/26

The score is driven primarily by strong FY2025 growth/profitability and a debt-free balance sheet, but it is materially held back by the sharp deterioration to negative operating and free cash flow. Technical indicators also point to weak near-term momentum, while reasonable valuation and a higher dividend yield provide partial support.

Positive Factors

Debt-free balance sheet

Having zero reported debt provides durable financial flexibility: it lowers default risk, preserves capacity to fund growth, dividends, or M&A if cash generation recovers, and means external financing can be deferred or selectively used without high leverage risk.

Accelerating revenue and improved margins

Sharp FY2025 top-line acceleration with improved gross and operating margins indicates stronger market traction and better unit economics. Sustained higher growth and modest margin expansion support scale benefits and longer-term profitability improvements if execution continues.

Prior proven cash-generation track record

Historic free cash flow generation shows the business model can convert earnings into cash under normal conditions. That track record suggests the FY2025 cash weakness may be episodic, and recovery would restore internal funding for operations and capital allocation over the medium term.

Negative Factors

Negative operating and free cash flow

A recent shift to negative OCF and FCF creates a persistent earnings-to-cash conversion risk. If working-capital or cash-generation issues persist, the firm may face limits on reinvestment, dividends, or need to seek external financing despite zero debt, pressuring long-term flexibility.

Decline in shareholder equity

A step-down in equity lowers the balance-sheet buffer against earnings volatility and asset write-downs. With reduced equity, the company has a slimmer cushion to absorb future losses or unexpected cash shortfalls, increasing structural vulnerability until equity stabilizes.

Mid-single-digit operating margins

Relatively low operating and net margins limit the firm's ability to absorb input cost inflation or competitive pricing pressure. Sustainable margin improvement requires scale, efficiency gains, or higher‑value services; otherwise profitability can be eroded by modest adverse industry shifts.

Keyware Solutions Inc. Business Overview & Revenue Model

Company Description

Keyware Solutions Inc. creates and sells information systems for the support of social infrastructure in Japan. It offers medical service systems to various medical services divisions, such as examination, nutrition, medical professions, and clinic management analysis systems; transportation operations, includes fare collection, train station revenue administration, settlement with other train lines, and IC cards; social infrastructure solutions; public traffic systems, such as new traffic management and train operation information network systems; passengers-related information systems, including train approaching status displays and destination guide displays, as well as train seat reservation system; and mass media related solutions. The company also provides communication data for fixed phones and mobile phones, packet communication data, customer management, rate management, billing administration, collection administration, and linkage and backbone systems; and air traffic and monitoring control management systems, as well as mobile telecommunications. In addition, it offers various solutions, including applications for ERP, patent administration, medical services, and IP telephony; and support services, including creation, implementation, operation, maintenance, and training services; system integration services, as well as sells hardware, systems, package software products, and related supplies. It offers its products and services for use in financial services, distribution and logistics, manufacturing, telecommunications, transportation, media, government agencies, medical services, network administration, system monitoring, transmission control, and interface control fields, as well as for service providers. The company was formerly known as Nippon Electronics Development Co., Ltd. and changed its name to Keyware Solutions Inc. in January 2001. Keyware Solutions Inc. was founded in 1965 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Keyware Solutions Inc. generates revenue primarily through service contracts for IT consulting, software development, and system integration projects. The company earns income by developing customized software solutions and providing ongoing support and maintenance services to its clients. Additionally, Keyware Solutions offers cloud services and IT infrastructure management, which contribute to its revenue streams. The company may also form strategic partnerships with other technology firms to enhance its service offerings and expand its client base, further driving its earnings.

Keyware Solutions Inc. Financial Statement Overview

Summary

Strong FY2025 revenue growth and improved profitability support the score, and the balance sheet is conservatively positioned with zero reported debt. However, FY2025 operating cash flow and free cash flow turned negative, creating a significant earnings-to-cash conversion risk that meaningfully offsets the income statement strength.

Income Statement

Revenue growth accelerated sharply in FY2025 (up ~77% year over year), and profitability improved with higher gross margin (~19%) and stronger operating and net margins (EBIT margin ~6.3%, net margin ~4.9%). Net income also increased meaningfully versus prior years. The main offset is that margins remain mid-single-digit overall, which leaves earnings more sensitive to cost pressure than higher-margin peers.

Balance Sheet

The balance sheet is conservatively positioned with zero reported debt in FY2024 and FY2025, implying low financial risk and strong flexibility. While equity declined in FY2025 versus FY2024, returns on equity improved to ~13.6% alongside higher profits. The key watch item is the equity step-down, which reduces the cushion if earnings volatility returns.

Cash Flow

Cash generation weakened materially in FY2025, with operating cash flow turning negative and free cash flow also negative, a notable deterioration from the strong positive cash flow in FY2023–FY2024. This creates a gap between accounting earnings (higher net income) and cash conversion in the most recent period. Positively, the company has demonstrated the ability to generate solid free cash flow in prior years, suggesting the FY2025 weakness may be episodic—but it still raises execution and working-capital risk until it normalizes.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2021
Income Statement
Total Revenue	21.63B	21.10B	20.51B	19.17B	18.43B	18.63B
Gross Profit	4.27B	4.03B	3.84B	3.44B	2.96B	2.98B
EBITDA	1.38B	1.17B	1.08B	820.24M	631.81M	711.44M
Net Income	1.11B	1.03B	729.50M	482.80M	556.04M	685.89M
Balance Sheet
Total Assets	10.26B	10.78B	12.53B	11.15B	10.75B	10.31B
Cash, Cash Equivalents and Short-Term Investments	2.50B	1.86B	1.96B	1.04B	910.39M	1.10B
Total Debt	0.00	0.00	0.00	0.00	375.00M	1.59B
Total Liabilities	2.91B	3.21B	3.89B	3.35B	3.29B	4.26B
Stockholders Equity	7.34B	7.57B	8.64B	7.81B	7.46B	6.05B
Cash Flow
Free Cash Flow	0.00	-579.58M	1.09B	638.15M	547.04M	-202.19M
Operating Cash Flow	0.00	-333.36M	1.18B	653.67M	552.71M	-193.90M
Investing Cash Flow	0.00	398.22M	-157.63M	-50.85M	-394.10M	-82.23M
Financing Cash Flow	0.00	-166.05M	-99.72M	-474.62M	-343.60M	153.49M

Keyware Solutions Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1059.00
• 50DMA: Negative
• 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:3799, the sentiment is Negative. The current price of 1059 is below the 20-day moving average (MA) of 1181.20, below the 50-day MA of 1218.76, and below the 200-day MA of 1090.97, indicating a neutral trend. The MACD of -9.62 indicates Positive momentum. The RSI at 42.28 is Neutral, neither overbought nor oversold. The STOCH value of 15.90 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3799.

Keyware Solutions Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4356	76 Outperform	¥10.06B	11.54	―	1.61%	-3.26%	34.51%
4442	73 Outperform	¥9.45B	11.18	―	0.95%	9.36%	-1.69%
3799	65 Neutral	¥9.27B	15.16	―	4.16%	4.52%	51.81%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
155A	58 Neutral	¥9.50B	45.06	―	―	30.13%	9.94%
3657	46 Neutral	¥10.22B	-3.21	―	5.03%	3.97%	63.06%
5255	42 Neutral	¥6.66B	-28.24	―	―	-29.41%	79.74%

Keyware Solutions Inc. Corporate Events

Keyware Solutions Lifts Sales and Operating Profit but Warns of Full-Year Earnings Decline

Keyware Solutions reported consolidated sales of ¥16.3 billion for the nine months to December 31, 2025, up 8.4% year on year, with operating income more than doubling to ¥533 million and ordinary income rising 13.0%. However, profit attributable to owners of parent edged down 3.3% to ¥396 million, and earnings per share slipped to ¥47.39, even as the equity ratio remained robust at 71.4% and net assets were broadly flat.

The company kept its full-year forecast unchanged, projecting sales of ¥22.5 billion, a 6.6% increase, and operating income of ¥1.1 billion, but expects ordinary income and profit attributable to owners of parent to decline 6.1% and 22.5%, respectively. Keyware also reaffirmed its dividend plan, targeting a full-year payout of ¥34.00 per share, signaling a continued emphasis on shareholder returns despite anticipated profit pressure and the exclusion of subsidiary Keyware Service Inc. from its consolidated scope.

The most recent analyst rating on (JP:3799) stock is a Buy with a Yen1480.00 price target. To see the full list of analyst forecasts on Keyware Solutions Inc. stock, see the JP:3799 Stock Forecast page.