KAYAC, Inc. (3904) AI Stock Analysis

• Market Cap: ¥7.07B
• Dividend Yield: 0.75%
• Average Volume (3M): 16.59K
• Price to Earnings (P/E): 11.8
• Beta (1Y): 0.53
• Revenue Growth: 12.70%
• EPS Growth: 2207.66%
• Country: JP
• Employees: 612
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 2.47
• Shares Outstanding: 16,108,800
• 10 Day Avg. Volume: 14,260
• 30 Day Avg. Volume: 16,593
• PEG Ratio: 0.03
• Price to Book (P/B): 1.39
• Price to Sales (P/S): 0.40
• P/FCF Ratio: 15.74
• 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: 66 Neutral
• Price Target: ¥460.00 ▼(-8.37% Downside)
• Action: Downgraded Date: 02/18/26
• Date: Action: Downgraded 02/18/26

The score is driven primarily by improving but still uneven financial performance (profit and cash-flow volatility) and a strong bullish technical setup with signs of near-term overextension. Valuation is supportive with a modest P/E, while the low dividend yield adds limited support.

Positive Factors

Revenue recovery

A clear top-line rebound indicates renewed demand or better product mix that can underpin sustainable growth. If management sustains revenue expansion, fixed-cost absorption improves and the business is better positioned to fund R&D, content, and marketing for longer-term market share gains.

Manageable leverage

Moderate debt levels reduce refinancing and solvency risk versus highly leveraged peers. With equity growth and steady total debt, the company has balance-sheet flexibility to invest through cycles, absorb shocks, and selectively finance strategic initiatives without immediate liquidity strain.

High gross margin

A stable, high gross margin signals durable product or content economics and pricing power versus peers. This structural margin buffer supports reinvestment in content, marketing and technology while helping the company maintain operating leverage as revenue scales, improving long-run profitability potential.

Negative Factors

Uneven cash generation

Inconsistent OCF and free cash flow undermine planning for capex, content spend, dividends or buybacks. FCF in 2025 covered only about half of net income, highlighting sensitivity to working capital and investments; persistent volatility limits financing optionality and raises execution risk.

Margin volatility

Large year-to-year swings in operating and net margins signal exposure to cost pressure, mix shifts, or episodic expenses. Such variability reduces predictability of returns on invested capital and complicates capital allocation, making long-term profitability and ROI less reliable for investors.

Historic operating volatility

Recurring volatility in results and cash conversion increases business risk and makes multi-year forecasting difficult. Management must demonstrate consistent execution to convert revenue growth into stable profits and cash, otherwise the company remains exposed to cyclical downturns and working-capital swings.

KAYAC, Inc. Business Overview & Revenue Model

Company Description

KAYAC Inc. engages in the game-related business in Japan. It also operates a game community under the name Lobi; Tonamel, a tournament format where organizers manage their tournaments; and Pla-cole, a matching service for couples and wedding planners, as well as provides esports event planning and management, distribution, and production services under the Well Played name. In addition, the company offers home funeral, real estate, and trading services. KAYAC Inc. was founded in 1998 and is headquartered in Kamakura, Japan.

How the Company Makes Money

KAYAC, Inc. Financial Statement Overview

Summary

Financials show a recovery in 2025 with stronger revenue growth and improved profitability versus 2024, supported by a reasonably stable balance sheet with manageable leverage. However, operating results and cash conversion have been volatile year-to-year, and free cash flow consistency remains a key weakness.

Income Statement

Revenue rebounded strongly in 2025 (up ~12.6% vs. 2024) after a flat-to-down 2024, showing the top line is still growing over the multi-year view. Profitability improved meaningfully in 2025 (net margin ~3.4% vs. ~0.9% in 2024), but margins remain well below the 2020–2022 range, indicating a less favorable mix and/or higher cost pressure versus prior peak years. Gross margin is healthy and relatively stable (~54% in 2025), yet operating and net profitability appear volatile year-to-year, which keeps the score from being higher.

Balance Sheet

Leverage looks manageable with debt-to-equity around ~0.56 in 2025 (improved versus earlier periods that were higher), and equity has generally grown over time, supporting balance-sheet resilience. Total debt is fairly steady, which limits refinancing risk from rapid debt build, but it also means improved performance needs to persist to comfortably carry obligations through weaker years. Overall, the balance sheet is solid but not pristine given moderate leverage and historical swings in shareholder returns.

Cash Flow

Cash generation is uneven: 2025 returned to positive operating cash flow (~¥1.0B) and positive free cash flow (~¥0.5B), a clear improvement from 2024 when both were negative. However, free cash flow in 2025 covered only about half of net income, and the 2024 cash flow shortfall highlights sensitivity to working-capital swings and/or investment needs. The company has demonstrated it can generate strong cash in better years (e.g., 2022–2023), but the volatility reduces confidence in consistency.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	17.85B	20.09B	16.73B	17.47B	16.50B	12.57B
Gross Profit	9.94B	10.91B	9.03B	9.23B	7.92B	5.93B
EBITDA	999.45M	1.42B	706.00M	1.30B	1.51B	1.59B
Net Income	477.07M	683.92M	149.05M	511.18M	779.84M	828.84M
Balance Sheet
Total Assets	12.60B	13.56B	12.88B	11.68B	10.98B	7.84B
Cash, Cash Equivalents and Short-Term Investments	6.05B	5.66B	4.96B	5.00B	4.13B	2.46B
Total Debt	3.06B	3.23B	3.27B	2.12B	2.34B	2.29B
Total Liabilities	6.34B	7.26B	6.85B	5.75B	5.64B	4.25B
Stockholders Equity	5.84B	5.80B	5.56B	5.46B	4.87B	3.31B
Cash Flow
Free Cash Flow	0.00	511.52M	-440.24M	974.02M	1.42B	352.09M
Operating Cash Flow	0.00	1.04B	-219.66M	1.12B	1.77B	489.66M
Investing Cash Flow	0.00	99.28M	-953.00M	-354.22M	-909.26M	13.41M
Financing Cash Flow	0.00	-588.14M	930.46M	-35.63M	931.60M	-572.15M

KAYAC, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 502.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3904, the sentiment is Negative. The current price of 502 is above the 20-day moving average (MA) of 461.65, below the 50-day MA of 502.92, and above the 200-day MA of 473.83, indicating a bearish trend. The MACD of -20.55 indicates Negative momentum. The RSI at 39.84 is Neutral, neither overbought nor oversold. The STOCH value of 55.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3904.

KAYAC, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3912	76 Outperform	¥10.31B	16.35	15.74%	5.18%	5.17%	1662.63%
4728	69 Neutral	¥4.81B	6.40	―	3.95%	43.78%	―
3904	66 Neutral	¥7.07B	11.77	―	0.75%	12.70%	2207.66%
3911	62 Neutral	¥9.90B	9.63	―	―	11.15%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
4175	44 Neutral	¥10.38B	-17.86	―	―	16.70%	87.76%
3793	42 Neutral	¥11.82B	4.66	―	―	93.85%	-216.24%