Nomura System Corporation Co., Ltd. (3940) AI Stock Analysis

• Market Cap: ¥6.35B
• Dividend Yield: 2.43%
• Average Volume (3M): 135.64K
• Price to Earnings (P/E): 15.8
• Beta (1Y): 0.57
• Revenue Growth: 2.92%
• EPS Growth: -0.94%
• Country: JP
• Employees: 133
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 2.13
• Shares Outstanding: 46,692,000
• 10 Day Avg. Volume: 101,320
• 30 Day Avg. Volume: 135,643
• PEG Ratio: 10.85
• Price to Book (P/B): 1.72
• Price to Sales (P/S): 1.71
• P/FCF Ratio: 13.55
• 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: 75 Outperform
• Price Target: ¥149.00 ▲(12.03% Upside)

The score is driven primarily by strong financial quality (debt-free balance sheet, consistent profitability, and generally solid cash generation). Valuation is reasonable with a mid-teens P/E and a moderate dividend yield, while technical indicators are mixed and do not add strong momentum support.

Positive Factors

Debt-Free Balance Sheet

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

Strong Cash Generation

Strong cash generation indicates good earnings quality and provides the company with the ability to reinvest in its business, pay dividends, or weather economic downturns.

Consistent Revenue Growth

Steady revenue growth reflects the company's ability to expand its market presence and maintain demand for its services, supporting long-term business sustainability.

Negative Factors

Net Margin Decline

A decline in net margin can indicate rising costs or pricing pressures, which may affect profitability if not managed effectively over time.

Cash Flow Variability

Variability in cash flow can signal potential working capital challenges or timing issues, impacting the company's ability to consistently fund operations and growth.

Limited Margin Expansion

Stable but unexceptional margins suggest limited room for profitability improvement, which could constrain competitive positioning and investment capacity.

Nomura System Corporation Co., Ltd. Business Overview & Revenue Model

Company Description

Nomura System Corporation Co, Ltd. provides IT consulting services for large companies in Japan. The company provides SAP consulting, maintenance, and support solutions; RPA/AI consulting; and Web system development consulting services. It also offers network consulting, big data consulting, SAP ERP personnel, talent management, Web attendance management, and SAP business analysis services. The company was founded in 1986 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nomura System Corporation Co., Ltd. generates revenue through multiple streams primarily centered around its expertise in IT services. The company earns income by developing and selling proprietary software products tailored to specific client needs. Additionally, it provides system integration services, which involve designing and implementing complex IT systems for businesses. Consulting services also form a significant part of its revenue model, helping clients optimize their IT infrastructure and processes. The company may also partner with other technology firms to broaden its service offerings, thereby increasing its market reach and revenue potential.

Nomura System Corporation Co., Ltd. Financial Statement Overview

Summary

Strong overall fundamentals supported by steady revenue growth and solid profitability, an exceptionally conservative (debt-free) balance sheet, and generally healthy free cash flow. Minor offsets include a dip in net margin in 2024 and some variability in operating cash flow conversion.

Income Statement

Revenue has grown steadily in recent years (2024 up meaningfully vs. 2023 after a stronger 2023), and profitability remains solid with operating margin around the mid-teens and net margin in the low double-digits. Margins are generally stable, though net margin dipped in 2024 versus 2023, suggesting some incremental cost pressure or mix shift. Overall, the income statement reflects a healthy, consistently profitable IT services profile with modest margin volatility.

Balance Sheet

The balance sheet is very conservative with zero debt across all reported years, giving the company substantial financial flexibility and low solvency risk. Equity has steadily increased over time, and returns on equity are consistently around low double-digits, indicating decent profitability without leverage. The main limitation is that returns are good but not exceptional, likely constrained by the absence of debt-driven amplification.

Cash Flow

Cash generation is generally strong, with free cash flow closely tracking net income in most years, indicating good earnings quality. However, cash conversion has been somewhat uneven—operating cash flow was notably light relative to net income in 2021 and sits just under net income again in 2023–2024, pointing to some working-capital or timing headwinds. Free cash flow improved materially in 2024 versus 2023, but the prior-year decline (2023) highlights some variability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.40B	3.28B	2.95B	2.70B	2.79B	2.54B
Gross Profit	925.87M	862.36M	782.12M	666.87M	742.30M	639.47M
EBITDA	572.90M	525.57M	471.28M	362.86M	480.48M	375.21M
Net Income	397.82M	366.05M	359.61M	255.71M	349.32M	269.47M
Balance Sheet
Total Assets	3.53B	3.70B	3.45B	3.14B	2.96B	2.68B
Cash, Cash Equivalents and Short-Term Investments	2.79B	2.85B	2.67B	2.07B	1.85B	1.85B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	349.54M	450.35M	403.60M	307.15M	313.49M	287.54M
Stockholders Equity	3.18B	3.25B	3.04B	2.84B	2.65B	2.40B
Cash Flow
Free Cash Flow	0.00	412.15M	348.53M	409.22M	147.98M	206.27M
Operating Cash Flow	0.00	420.12M	349.79M	445.84M	159.65M	206.82M
Investing Cash Flow	0.00	-8.89M	456.74M	-77.36M	-8.97M	-549.00K
Financing Cash Flow	0.00	-222.96M	-209.46M	-147.70M	-150.01M	-118.80M

Nomura System Corporation Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 133.00
• 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:3940, the sentiment is Positive. The current price of 133 is below the 20-day moving average (MA) of 134.85, above the 50-day MA of 132.49, and above the 200-day MA of 131.64, indicating a bullish trend. The MACD of 0.81 indicates Positive momentum. The RSI at 60.80 is Neutral, neither overbought nor oversold. The STOCH value of 77.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3940.

Nomura System Corporation Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4752	81 Outperform	¥7.17B	9.15	―	3.37%	5.25%	23.64%
3940	75 Outperform	¥6.35B	15.79	―	2.43%	2.92%	-0.94%
2488	73 Outperform	¥6.89B	11.65	―	2.78%	13.58%	20.32%
3988	68 Neutral	¥5.90B	14.95	―	1.23%	11.62%	-16.59%
4398	68 Neutral	¥6.57B	40.55	―	1.04%	-3.46%	-59.98%
3625	65 Neutral	¥4.64B	9.76	―	1.20%	26.70%	93.41%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%