CNS Co.,Ltd. (4076) AI Stock Analysis

• Market Cap: ¥4.94B
• Dividend Yield: 4.35%
• Average Volume (3M): 2.64K
• Price to Earnings (P/E): 10.2
• Beta (1Y): 0.48
• Revenue Growth: 8.71%
• EPS Growth: 23.46%
• Country: JP
• Employees: 255
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 40.89
• Shares Outstanding: 2,906,000
• 10 Day Avg. Volume: 2,050
• 30 Day Avg. Volume: 2,640
• PEG Ratio: -1.40
• Price to Book (P/B): 1.12
• Price to Sales (P/S): 0.63
• P/FCF Ratio: 10.30
• 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: 80 Outperform
• Price Target: ¥2,162.00 ▲(26.06% Upside)
• Action: Reiterated Date: 10/23/25
• Date: Action: Reiterated 10/23/25

CNS Co., Ltd. scores well due to its strong financial performance, characterized by consistent revenue growth and a robust balance sheet. The technical analysis supports a bullish outlook with the stock trading above key moving averages. Additionally, the valuation metrics suggest the stock is undervalued, with an attractive dividend yield. These factors contribute to a favorable overall stock score.

Positive Factors

Very low leverage and strong equity ratio

Extremely low debt and a high equity ratio materially reduce financial risk and interest burden, giving management durable flexibility to fund capex, dividends, or M&A from equity or cash. This structural strength supports resilience through downturns and strategic optionality.

Consistent revenue growth trend

Sustained top-line growth indicates ongoing market demand and product/service traction. Reliable revenue expansion supports scale economics, funding for reinvestment and R&D, and underpins medium-term strategic plans even if margins need improvement.

High free cash flow conversion

Near-par free cash flow conversion shows earnings efficiently turning into spendable cash, enabling dividends, capex, or debt reduction without relying on external funding. This durable cash generation bolsters financial flexibility and shareholder returns.

Negative Factors

Declining profitability margins

Eroding margins reduce the company's ability to absorb cost inflation or competitive pricing pressure and constrain reinvestment capacity. If persistent, margin compression can pressure ROE, free cash flow and limit long-term growth funding.

Weak operating cash flow coverage

Moderate OCF relative to net income and a deteriorating coverage trend point to potential earnings quality or working-capital strain. This reduces the reliability of reported profits to support dividends and investment without pressure on liquidity over time.

Recent slowdown in latest-period revenue growth

A marked deceleration in the most recent period versus historical gains suggests weakening demand or near-term market saturation. Sustained slowdown would limit scale benefits, make margin recovery harder, and constrain long-term strategic investments.

CNS Co.,Ltd. Business Overview & Revenue Model

Company Description

CNS Co.,Ltd., together with its subsidiaries, provides system engineering services in Japan. It offers system integration services, including cloud environment construction, infrastructure environment construction, application development, modernization, data utilization/analysis, SAS introduction support, and ServiceNow implementation support; U-Way oracle cloud infrastructure, U-Way oracle cloud VMware solution, and U-Way Lite OCI base model services; and DX, technology, and business consulting services. The company also provides system infrastructure, big data analysis, and digital innovation promotion services; and DX literacy education and human resource development accompaniment support services. CNS Co.,Ltd. was incorporated in 1985 and is headquartered in Tokyo, Japan.

How the Company Makes Money

CNS Co., Ltd. generates revenue through multiple channels, including software licensing, consulting fees, and system integration projects. A significant portion of its income comes from long-term contracts with corporate clients who require customized IT solutions and ongoing support. Additionally, the company leverages partnerships with major technology providers to enhance its service offerings, which can lead to joint ventures and revenue-sharing opportunities. The growth in demand for digital transformation services in various sectors, including finance and healthcare, also contributes to its revenue streams, as organizations increasingly seek to modernize their IT infrastructure.

CNS Co.,Ltd. Financial Statement Overview

Summary

CNS Co., Ltd. exhibits a solid financial position with consistent revenue growth and a strong balance sheet characterized by low leverage. While profitability margins have slightly declined, the company maintains a healthy return on equity. Cash flow generation is robust, though the recent decline in operating cash flow coverage warrants attention.

Income Statement

CNS Co., Ltd. has demonstrated consistent revenue growth over the past few years, with a notable increase of 2.05% in the latest period. The gross profit margin remains stable around 24%, indicating efficient cost management. However, the net profit margin has slightly decreased to 6.10%, suggesting increased expenses or lower pricing power. The EBIT and EBITDA margins have also seen a decline, which could impact profitability if not addressed.

Balance Sheet

The company's balance sheet is strong, with a very low debt-to-equity ratio of 0.00198, indicating minimal leverage and financial risk. The return on equity is healthy at 10.79%, showing effective use of shareholder funds. The equity ratio stands at a solid 75.28%, reflecting a strong capital structure and financial stability.

Cash Flow

CNS Co., Ltd. has experienced significant free cash flow growth, although the latest period shows an 'Infinity' growth rate due to a low base effect. The operating cash flow to net income ratio is moderate at 0.51, suggesting adequate cash generation relative to net income. The free cash flow to net income ratio is high at 0.95, indicating strong cash conversion, but the decline in operating cash flow coverage ratio over the years is a concern.

Breakdown	TTM	May 2024	May 2023	May 2022	May 2022	May 2021
Income Statement
Total Revenue	7.24B	7.00B	6.66B	5.99B	5.42B	4.84B
Gross Profit	1.82B	1.71B	1.64B	1.51B	1.32B	1.15B
EBITDA	708.75M	601.29M	654.38M	588.91M	558.76M	478.00M
Net Income	527.18M	427.35M	461.33M	433.10M	409.49M	336.71M
Balance Sheet
Total Assets	5.17B	5.26B	4.93B	4.55B	4.15B	3.14B
Cash, Cash Equivalents and Short-Term Investments	3.48B	3.67B	3.57B	3.16B	3.01B	1.88B
Total Debt	6.70M	7.83M	10.65M	13.40M	5.65M	7.01M
Total Liabilities	1.28B	1.30B	1.26B	1.21B	1.11B	1.14B
Stockholders Equity	3.90B	3.96B	3.67B	3.34B	3.04B	1.99B
Cash Flow
Free Cash Flow	0.00	428.99M	553.82M	344.11M	450.45M	148.45M
Operating Cash Flow	0.00	443.71M	564.57M	352.80M	461.45M	183.12M
Investing Cash Flow	0.00	-268.63M	-80.65M	-125.97M	-23.01M	135.29M
Financing Cash Flow	0.00	-142.37M	-133.52M	-132.92M	633.75M	-64.02M

CNS Co.,Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1715.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4076, the sentiment is Negative. The current price of 1715 is above the 20-day moving average (MA) of 1700.95, below the 50-day MA of 1731.02, and above the 200-day MA of 1619.79, indicating a neutral trend. The MACD of -5.34 indicates Negative momentum. The RSI at 46.67 is Neutral, neither overbought nor oversold. The STOCH value of 56.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4076.

CNS Co.,Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4076	80 Outperform	¥4.94B	10.23	―	4.35%	8.71%	23.46%
3839	76 Outperform	¥5.26B	-16.02	―	1.61%	7.03%	1.01%
3988	68 Neutral	¥5.58B	11.49	―	1.23%	11.62%	-16.59%
3625	65 Neutral	¥4.42B	10.29	―	1.20%	26.70%	93.41%
2375	64 Neutral	¥4.29B	-18.12	―	0.94%	-12.25%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4261	57 Neutral	¥5.28B	21.55	―	―	27.60%	-15.54%