Nippon Ichi Software, Inc. (3851) AI Stock Analysis

• Market Cap: ¥4.22B
• Dividend Yield: 0.6%
• Average Volume (3M): 3.50K
• Price to Earnings (P/E): 41.9
• Beta (1Y): 0.33
• Revenue Growth: -0.75%
• EPS Growth: -126.41%
• Country: JP
• Employees: 185
• Sector: Communication Services
• Sector Strength: 76
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): -25.70
• Shares Outstanding: 5,151,100
• 10 Day Avg. Volume: 2,120
• 30 Day Avg. Volume: 3,503
• PEG Ratio: -0.18
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -30.72
• 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: ¥845.00
• Price Target Upside: 0.48% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 56 Neutral
• Price Target: ¥866.00 ▲(2.97%Upside)

The stock score is primarily impacted by financial performance challenges, particularly in income generation and cash flow. Technical indicators provide a neutral outlook, while poor valuation metrics weigh negatively. Stabilizing financial health is crucial for future improvement.

Nippon Ichi Software, Inc. Business Overview & Revenue Model

Company Description

Nippon Ichi Software, Inc. (3851), often referred to as NIS, is a Japanese video game developer and publisher known for its role-playing games (RPGs) and strategy titles. Established in 1993, the company has carved a niche in the gaming industry with popular franchises such as 'Disgaea,' which is recognized for its tactical gameplay and unique storytelling. NIS is headquartered in Gifu, Japan, and operates primarily in the entertainment and gaming sectors, producing software for various platforms, including consoles and PCs.

How the Company Makes Money

Nippon Ichi Software generates revenue primarily through the development and sale of video games. The company's core revenue streams include direct sales of physical and digital game copies through various retail and online platforms. Additionally, NIS leverages licensing agreements and partnerships with other gaming companies for distribution and co-development opportunities. The company also engages in merchandise sales, offering products related to its popular game franchises. Significant partnerships with platforms like PlayStation and Nintendo contribute to its earnings by ensuring widespread availability and promotion of its titles. Furthermore, international subsidiaries, such as NIS America, help expand its market reach and drive sales in overseas markets.

Nippon Ichi Software, Inc. Financial Statement Overview

Summary

Nippon Ichi Software, Inc. shows strong balance sheet metrics with low leverage and a high equity ratio, but faces challenges in income generation and cash conversion. Declining revenues and profitability are concerning, and recent financial struggles could impact future growth without corrective actions.

Income Statement

The income statement reveals a mixed performance. The company experienced a revenue decline of approximately 0.75% from 2024 to 2025, following a drop in gross profit margin. Net profit margin turned negative due to a significant net loss in 2025, indicating challenges in maintaining profitability. However, EBIT and EBITDA margins have seen volatility, signaling inconsistent operational efficiency.

Balance Sheet

The balance sheet remains robust with a strong equity base, as seen in the consistently high equity ratio. Despite a relatively low debt-to-equity ratio, indicating prudent leverage management, the company has experienced a decline in stockholders' equity. Return on equity has also turned negative due to recent losses, suggesting pressure on shareholder value creation.

Cash Flow

Cash flow analysis shows a decline in operating and free cash flow from 2024 to 2025, with negative free cash flow growth. Although the company maintains a positive operating cash flow to net income ratio, the free cash flow to net income ratio is negative, reflecting difficulties in converting income to free cash flow.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	4.63B	5.30B	5.34B	4.83B	5.72B	5.30B
Gross Profit	1.99B	1.95B	2.58B	2.74B	3.33B	2.89B
EBITDA	51.18M	49.05M	950.30M	822.34M	1.78B	1.31B
Net Income	95.76M	-157.22M	593.40M	672.48M	1.27B	905.32M
Balance Sheet
Total Assets	11.62B	11.15B	10.82B	9.38B	8.23B	6.39B
Cash, Cash Equivalents and Short-Term Investments	5.98B	5.94B	5.36B	4.35B	4.77B	3.78B
Total Debt	1.72B	1.67B	1.17B	1.06B	769.67M	367.10M
Total Liabilities	3.35B	3.29B	2.73B	2.43B	2.09B	1.75B
Stockholders Equity	8.27B	7.87B	8.08B	6.95B	6.14B	4.64B
Cash Flow
Free Cash Flow	0.00	177.03M	358.53M	-188.74M	606.70M	1.42B
Operating Cash Flow	0.00	404.15M	794.38M	50.42M	1.19B	1.55B
Investing Cash Flow	0.00	-683.42M	-1.04B	-1.02B	-820.70M	552.41M
Financing Cash Flow	0.00	471.21M	78.71M	269.02M	343.30M	-83.00M

Nippon Ichi Software, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 841.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3851, the sentiment is Negative. The current price of 841 is below the 20-day moving average (MA) of 841.95, below the 50-day MA of 842.46, and below the 200-day MA of 845.41, indicating a bearish trend. The MACD of -2.67 indicates Positive momentum. The RSI at 42.04 is Neutral, neither overbought nor oversold. The STOCH value of 27.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3851.

Nippon Ichi Software, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3907	74 Outperform	¥2.67B	10.12		―	1.02%	3129.12%
3723	68 Neutral	¥11.76B	21.80		1.73%	-21.03%	-42.64%
Sector *	62 Neutral	$42.18B	-1.56	-12.06%	2.81%	2.10%	-71.01%
3851	56 Neutral	¥4.22B	41.88		0.60%	-0.75%	-126.41%
3758	56 Neutral	¥6.29B	―		1.66%	-9.05%	-27.30%
3911	50 Neutral	¥11.21B	30.88		―	<0.01%	―
3810	43 Neutral	¥6.17B	―		―	-17.67%	26.46%