Silicon Studio Corp. (3907) AI Stock Analysis

• Market Cap: ¥1.94B
• Dividend Yield: 1.36%
• Average Volume (3M): 27.02K
• Price to Earnings (P/E): 9.4
• Beta (1Y): 0.46
• Revenue Growth: 2.33%
• EPS Growth: N/A
• Country: JP
• Employees: 262
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 21.35
• Shares Outstanding: 2,973,900
• 10 Day Avg. Volume: 53,120
• 30 Day Avg. Volume: 27,020
• PEG Ratio: 0.07
• Price to Book (P/B): 1.17
• Price to Sales (P/S): 0.50
• P/FCF Ratio: 7.58
• 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: 64 Neutral
• Price Target: ¥792.00 ▲(2.99% Upside)

The score is primarily supported by improved profitability since 2022, a conservative balance sheet, and a strong rebound in 2025 free cash flow. It is held back by weak price trend/technical momentum and business fundamentals showing limited growth and some margin compression versus the 2022 peak, despite a reasonable valuation.

Positive Factors

Conservative balance sheet

Low debt-to-equity and an expanding equity base provide durable financial flexibility. Conservative leverage reduces refinancing and solvency risk, enabling the company to invest in R&D, weather cyclical industry downturns, and pursue partnerships without excessive interest burden.

Stronger free cash flow in 2025

A material FCF rebound and high FCF-to-net-income ratio indicate improved cash conversion quality. Sustainable cash generation supports reinvestment in engines/middleware, funds consulting projects, and provides optionality for dividends or strategic M&A over the medium term.

Diversified software and services revenue model

A mix of license fees, long-term support, consulting, and partnership/royalty income creates recurring and project revenue streams. This diversification stabilizes cash flow versus pure-product firms and aligns the business with structural demand for high-quality visual tools in gaming and digital content creation.

Negative Factors

Weak top-line growth

Declining or flat revenue constrains scalability and necessitates reliance on margin improvement or buybacks to grow EPS. Persistent top-line weakness reduces the firm's ability to expand market share, reinvest in product development, and capitalize on structural industry growth trends.

Operating margin compression

A multi-year decline in EBITDA margin signals pressure from costs, pricing, or product mix. Lower operating leverage reduces free cash flow potential per revenue dollar and limits the firm's capacity to fund R&D and sales expansion without eroding returns to equity holders.

Volatile cash flow history

Historic swings in free cash flow undermine predictability for capex, dividends, and strategic investments. Irregular FCF increases funding risk during market stress and complicates long-term planning, making it harder to rely on cash returns or sustained reinvestment strategies.

Silicon Studio Corp. Business Overview & Revenue Model

Company Description

Silicon Studio Corporation develops game engine and middleware products in Japan and internationally. The company offers YEBIS, an optical effects middleware; Mizuchi, the real-time rendering engine used in gaming and virtual reality (VR), video and animation, product and architectural visualization, etc.; Motion Portrait, a CG technology to create facial animation from a digital photo; and Enlighten, a lighting technology that delivers real-time global illumination over mobile, desktop, and VR platforms. It also provides human resource services comprising development, consulting, outsourcing, and staffing, including temporary, temporary-to-permanent, and full-time placement services. The company was incorporated in 1999 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Silicon Studio generates revenue through multiple streams, primarily by selling software licenses for its game development tools and middleware, including YEBIS. The company charges developers for usage rights and ongoing support, which provides a steady income. Additionally, Silicon Studio earns revenue from consulting services, where they assist other companies in optimizing their game development processes and strategies. Partnerships with major gaming companies and collaborations on specific projects also contribute to revenue, as the company may receive fees or royalties based on the success of the titles developed using their technology. Furthermore, the growing demand for high-quality visual experiences in gaming and entertainment continues to drive sales and expand their market reach.

Silicon Studio Corp. Financial Statement Overview

Summary

Profitability has remained positive since 2022 and the balance sheet is conservatively levered (low debt-to-equity), while 2025 cash generation improved materially (FCF 286M, ~0.89x net income). Offsetting this, revenue has been flat to down (about -2.5% YoY in 2025) and operating profitability has compressed versus 2022 (EBITDA margin ~10.1% to ~6.1%), with historically volatile free cash flow reducing confidence in durability.

Income Statement

Profitability has improved meaningfully versus the loss year (2021), with positive operating profit and net income sustained from 2022–2025. Gross margin is relatively steady in the low-to-mid 40% range recently (2022–2025), but operating profitability has compressed from the 2022 peak (EBITDA margin ~10.1% in 2022 vs ~6.1% in 2025). The key headwind is growth: revenue has been essentially flat to down, with a modest decline in 2025 (about -2.5% YoY), suggesting limited top-line momentum despite the return to profitability.

Balance Sheet

Leverage looks conservative, with debt-to-equity remaining low across recent periods (roughly 0.15–0.34, and ~0.18 in 2025), providing balance-sheet flexibility. Equity has also expanded versus earlier years, indicating a stronger capital base. The main watch-out is that returns have been uneven historically (including a negative year in 2021 and lower profitability in 2024), so balance-sheet strength is solid, but earnings power consistency still matters for compounding equity over time.

Cash Flow

Cash generation strengthened sharply in 2025, with operating cash flow of 322M and free cash flow of 286M, and free cash flow closely tracking net income (free cash flow to net income ~0.89). That said, cash flow has been volatile across the cycle: 2024 produced minimal free cash flow (4M) despite positive earnings, and 2020–2021 included negative free cash flow. Overall, the latest year is encouraging, but the multi-year variability reduces confidence in durability.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.41B	4.30B	4.41B	4.55B	4.51B	3.99B
Gross Profit	1.90B	1.86B	1.90B	1.95B	2.00B	1.45B
EBITDA	178.00M	262.00M	194.00M	281.00M	456.00M	9.00M
Net Income	87.00M	206.00M	87.00M	200.00M	254.00M	-101.00M
Balance Sheet
Total Assets	2.94B	2.80B	2.94B	3.16B	3.44B	2.82B
Cash, Cash Equivalents and Short-Term Investments	1.24B	1.59B	1.24B	1.51B	1.70B	1.08B
Total Debt	265.00M	340.00M	265.00M	436.00M	579.00M	567.00M
Total Liabilities	1.21B	945.00M	1.21B	1.40B	1.74B	1.46B
Stockholders Equity	1.74B	1.85B	1.74B	1.76B	1.70B	1.36B
Cash Flow
Free Cash Flow	0.00	286.00M	4.00M	93.00M	527.00M	-29.00M
Operating Cash Flow	0.00	322.00M	92.00M	121.00M	566.00M	107.00M
Investing Cash Flow	0.00	-46.00M	-82.00M	-8.00M	-8.00M	-125.00M
Financing Cash Flow	0.00	74.00M	-276.00M	-289.00M	93.00M	120.00M

Silicon Studio Corp. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 769.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3907, the sentiment is Negative. The current price of 769 is above the 20-day moving average (MA) of 735.95, above the 50-day MA of 749.58, and below the 200-day MA of 840.47, indicating a bearish trend. The MACD of -16.25 indicates Positive momentum. The RSI at 32.73 is Neutral, neither overbought nor oversold. The STOCH value of 7.08 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3907.

Silicon Studio Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3928	65 Neutral	¥2.48B	19.58	―	―	-10.80%	-64.63%
3907	64 Neutral	¥1.94B	9.41	―	1.36%	2.33%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3657	50 Neutral	¥10.78B	-15.24	―	5.03%	3.97%	63.06%
3911	48 Neutral	¥10.28B	5.79	―	―	11.15%	―
3639	47 Neutral	¥1.81B	57.89	―	―	-17.76%	-15.23%
3672	45 Neutral	¥3.73B	-3.41	―	―	-17.60%	37.30%