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

• Market Cap: ¥6.82B
• Dividend Yield: 2.43%
• Average Volume (3M): 135.64K
• Price to Earnings (P/E): 16.5
• Beta (1Y): 0.56
• Revenue Growth: 2.92%
• EPS Growth: -0.94%
• Country: JP
• Employees: 133
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 2.26
• Shares Outstanding: 46,692,000
• 10 Day Avg. Volume: 101,320
• 30 Day Avg. Volume: 135,643
• PEG Ratio: 1.31
• Price to Book (P/B): 1.70
• Price to Sales (P/S): 1.80
• P/FCF Ratio: 16.64
• 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: 78 Outperform
• Price Target: ¥155.00 ▲(16.54% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is driven primarily by strong financial quality—especially the debt-free balance sheet and solid margins—partly tempered by the 2025 revenue decline and uneven cash conversion. Technicals are modestly supportive (price above key moving averages, positive MACD), and valuation is reasonable with a mid-teens P/E and a moderate dividend yield.

Positive Factors

Debt-free Balance Sheet

No reported debt eliminates refinancing and leverage risk, preserving financial flexibility. This durable strength supports investment in services, steady dividends and withstands cyclical IT spending downturns, improving long-term resilience and credit optionality.

Improving Profitability

Rising EBIT and stable net margins indicate operational leverage and better pricing or cost control within systems-integration services. Sustained margin expansion supports higher internal cash generation and competitive reinvestment capacity over the medium term.

Generally Healthy Cash Generation

FCF that roughly matches net income in most years shows earnings quality and capacity to fund operations, maintenance contracts and dividends without relying on external financing, providing durable support for shareholder returns and capital allocation.

Negative Factors

2025 Revenue Decline

A year-over-year revenue contraction signals demand softness or lost project volume. For a project-driven services firm, even a small decline can compress growth runway and reflect client budget variability, challenging multi-period revenue predictability and expansion plans.

Uneven Cash Conversion

Inconsistent OCF versus earnings and volatile FCF timing create uncertainty in actual cash available for reinvestment or distributions. This irregularity raises execution risk for hiring, bidding on large projects, and smoothing dividends despite solid reported margins.

Project Timing / Scale Risk

Dependence on project-based systems-integration work exposes revenue to contract timing and client procurement cycles. Combined with a small employee base (133), limited scale can amplify revenue swings and restrict ability to absorb delayed or canceled projects.

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 a very conservative, debt-free balance sheet (high resilience) and solid profitability with improving EBIT margin. Offsetting factors are slightly negative revenue growth in 2025 and uneven cash conversion/volatile free cash flow timing.

Income Statement

Profitability is strong for an IT services firm, with net margin holding around ~11–12% in recent years and EBIT margin improving from ~13% (2022) to ~17.7% (2025). Gross margin also trended up versus 2022 levels. The main weakness is growth: revenue rose in 2023–2024 but turned slightly negative in 2025 (about -2.3%), signaling some demand softness or project timing risk.

Balance Sheet

The balance sheet is very conservative with no debt reported across all periods, eliminating refinancing and leverage risk. Equity and total assets have steadily increased over time, supporting financial resilience. Return on equity has been solid (roughly ~9–13% where provided), though it eased versus the 2021 peak, suggesting profitability is good but not accelerating.

Cash Flow

Cash generation is generally healthy, with free cash flow closely tracking net income in most years (roughly ~0.92–1.00x), indicating earnings quality is reasonable. However, operating cash flow relative to net income has been inconsistent (notably weak in 2021 and below 1.0x again in 2023–2025), and free cash flow growth has been volatile, which adds uncertainty around cash conversion timing.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.40B	3.32B	3.28B	2.95B	2.70B	2.79B
Gross Profit	925.87M	945.23M	862.36M	782.12M	666.87M	742.30M
EBITDA	572.90M	596.49M	525.57M	471.28M	362.86M	480.48M
Net Income	397.82M	403.66M	366.05M	359.61M	255.71M	349.32M
Balance Sheet
Total Assets	3.53B	3.98B	3.70B	3.45B	3.14B	2.96B
Cash, Cash Equivalents and Short-Term Investments	2.79B	2.70B	2.85B	2.67B	2.07B	1.85B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	349.54M	451.51M	450.35M	403.60M	307.15M	313.49M
Stockholders Equity	3.18B	3.53B	3.25B	3.04B	2.84B	2.65B
Cash Flow
Free Cash Flow	0.00	360.10M	412.15M	348.53M	409.22M	147.98M
Operating Cash Flow	0.00	371.99M	420.12M	349.79M	445.84M	159.65M
Investing Cash Flow	0.00	-250.19M	-8.89M	456.74M	-77.36M	-8.97M
Financing Cash Flow	0.00	-275.92M	-222.96M	-209.46M	-147.70M	-150.01M

Nomura System Corporation Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 133.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 137.35, below the 50-day MA of 134.81, and below the 200-day MA of 134.01, indicating a bullish trend. The MACD of 2.58 indicates Negative momentum. The RSI at 75.19 is Negative, neither overbought nor oversold. The STOCH value of 88.76 is Negative, 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	8.94	―	3.37%	5.25%	23.64%
3940	78 Outperform	¥6.82B	16.54	―	2.43%	2.92%	-0.94%
5576	77 Outperform	¥6.54B	12.26	―	3.13%	6.08%	0.53%
4396	76 Outperform	¥27.04B	16.07	―	1.70%	22.25%	31.88%
4072	73 Outperform	¥33.63B	11.50	―	2.22%	9.57%	315.38%
3988	68 Neutral	¥5.82B	14.48	―	1.23%	11.62%	-16.59%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%