Nomura Research Institute (4307) AI Stock Analysis

• Market Cap: $2.43T
• Dividend Yield: 1.14%
• Average Volume (3M): 1.18M
• Price to Earnings (P/E): 25.3
• Beta (1Y): 0.47
• Revenue Growth: 4.50%
• EPS Growth: 16.63%
• Country: JP
• Employees: 16,708
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): N/A
• Shares Outstanding: 581,241,500
• 10 Day Avg. Volume: 1,327,730
• 30 Day Avg. Volume: 1,182,226
• PEG Ratio: 1.52
• Price to Book (P/B): 6.39
• Price to Sales (P/S): 3.62
• P/FCF Ratio: 22.44
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 3.26
• Enterprise Value/Gross Profit: 8.88
• Enterprise Value/Ebitda: 12.77
• 1Y Price Target: $6,678.64
• Price Target Upside: 55.79% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: ¥5,030.00 ▲(17.33% Upside)

The score is primarily supported by strong financial performance (high margins, strong ROE, and solid cash conversion). This is offset by very weak technicals (below all major moving averages with negative MACD and extreme oversold readings) and a less compelling valuation driven by a high P/E, with only modest dividend support.

Positive Factors

High profitability and returns

NRI's high ROE and healthy gross, operating and net margins indicate durable pricing power and operational efficiency in IT services and consulting. Those margins allow reinvestment in platforms and talent, support consistent earnings quality, and provide a buffer against client spending cyclicality.

Strong cash conversion

FCF converting at roughly 96% of net income demonstrates that reported profits largely translate into cash. This strengthens the company's ability to self-fund investments, reduce leverage, return capital, and remain resilient to timing differences in project billing and payments over the medium term.

Recurring revenue and diversified services

A mix of systems integration, managed services, consulting, and platform fees yields recurring, contract-based revenue and greater client stickiness—particularly in financial services. That diversification supports steadier cash flows, predictable margins, and longer-term client relationships versus one-off projects.

Negative Factors

Moderating revenue growth

Revenue growth has slowed to mid-single digits, reflecting a more mature business phase. Slower top-line expansion limits long-term operational leverage and overall earnings upside absent successful new offerings, market share gains, or acceleration in higher-growth platform sales.

Meaningful absolute debt level

Although leverage trends are improving, the company still carries a meaningful absolute debt load. In a downturn or if cash generation weakens, required debt servicing could constrain capital allocation, reduce flexibility for strategic initiatives, and increase reliance on operating cash.

Recent weaker cash flow momentum

Recent softness in FCF momentum and only moderate operating cash flow coverage reduce the cushion for discretionary spending, investments, or dividends. If the trend persists, it could limit capital deployment, slow platform development, and heighten sensitivity to project timing and client payment cycles.

Nomura Research Institute Business Overview & Revenue Model

Company Description

Nomura Research Institute, Ltd. provides consulting, financial information technology (IT) solution, industrial IT solution, and IT platform services in Japan. Its Consulting segment offers management, operational, and system consulting services for enterprise and government agencies. This segment is also involved in the research, future projection, and recommendations related to society, economics, business, technology, etc. The company's Financial IT Solutions segment provides system consulting, development, and management solutions, as well as shared online services for the financial institutions, including the securities, insurance, banking, asset management, and other financial sectors. Its Industrial IT Solutions segment offers system consulting, development, and management solutions, as well as shared online services primarily for the distribution, manufacturing, service, and public sectors. The company's IT Platform Services segment engages in the data center operation activities and construction of platforms and networks to the Financial IT and Industrial IT Solutions segments, as well as provides IT platform solutions and information security services to external clients. This segment is also involved in research related to advance IT, etc. The company was founded in 1965 and is headquartered in Tokyo, Japan.

How the Company Makes Money

NRI generates revenue through multiple streams, primarily from consulting services, systems integration, and software development. The consulting services include strategic advisory and management consulting, which are billed on a project basis, while systems integration involves the implementation of IT systems tailored to client needs, generating revenue through service contracts and project fees. Additionally, NRI earns income from licensing proprietary software and providing ongoing support and maintenance services. The company also forms partnerships with technology firms, enhancing its service offerings and market reach, which contributes significantly to its earnings. NRI's strong focus on research and development allows it to stay ahead in technology trends, thereby attracting clients looking for innovative solutions.

Nomura Research Institute Financial Statement Overview

Summary

Strong profitability and returns (healthy gross/operating/net margins and ~22.9% ROE), with manageable and improving leverage. Cash flow quality is good (FCF ~96% of net income), but recent FCF momentum is softer and coverage headroom is only moderate, tempering the score.

Income Statement

TTM (Trailing-Twelve-Months) performance shows strong profitability with healthy gross profit (~36.8%) and solid operating and net margins (~19.0% and ~13.0%). Revenue continues to expand (TTM revenue up vs. the latest annual period), and profitability has trended upward over the last several years as scale improved. The main weakness is that growth has moderated from earlier, higher-growth years, suggesting a more mature pace going forward.

Balance Sheet

Leverage looks manageable with debt-to-equity improving in TTM (~0.56) versus the latest annual period (~0.65), alongside rising equity. Returns are strong (TTM return on equity ~22.9%), indicating efficient use of shareholder capital. The key watch-out is that debt remains meaningful in absolute terms, so flexibility could tighten if profitability or cash generation weakens.

Cash Flow

Cash generation is solid: TTM free cash flow is high and closely tracks earnings (free cash flow is ~96% of net income), which supports quality of profits. However, recent momentum is mixed, with TTM free cash flow slightly down versus the prior year and operating cash flow covering only a moderate portion of the company’s obligations in the provided coverage measure (~0.54), implying less cushion than the income statement alone suggests.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	764.81B	736.56B	692.16B	611.63B	550.34B
Gross Profit	275.30B	261.01B	239.83B	216.07B	185.80B
EBITDA	187.97B	171.26B	159.14B	149.08B	123.82B
Net Income	93.76B	79.64B	76.31B	71.44B	52.87B
Balance Sheet
Total Assets	928.50B	922.77B	838.22B	789.65B	656.54B
Cash, Cash Equivalents and Short-Term Investments	168.60B	173.94B	129.26B	115.61B	153.19B
Total Debt	282.04B	298.54B	237.74B	250.42B	165.59B
Total Liabilities	490.54B	519.75B	435.82B	447.17B	323.33B
Stockholders Equity	434.04B	399.53B	399.01B	339.36B	330.50B
Cash Flow
Free Cash Flow	123.54B	92.48B	64.20B	55.16B	55.56B
Operating Cash Flow	130.20B	142.28B	118.90B	98.14B	84.59B
Investing Cash Flow	-47.59B	-53.42B	-61.19B	-130.55B	-20.52B
Financing Cash Flow	-87.31B	-47.58B	-44.92B	-8.00B	-13.18B

Nomura Research Institute Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4287.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4307, the sentiment is Negative. The current price of 4287 is below the 20-day moving average (MA) of 5712.95, below the 50-day MA of 5966.66, and below the 200-day MA of 5793.92, indicating a bearish trend. The MACD of -368.69 indicates Positive momentum. The RSI at 10.68 is Positive, neither overbought nor oversold. The STOCH value of 4.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4307.

Nomura Research Institute Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3626	73 Outperform	¥865.21B	18.91	―	1.39%	4.95%	9.54%
6702	69 Neutral	¥7.47T	16.45	15.02%	0.68%	-8.58%	83.16%
9719	69 Neutral	¥1.77T	27.09	―	1.48%	42.98%	48.88%
4307	64 Neutral	$2.43T	25.28	22.48%	1.14%	4.50%	16.63%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6701	59 Neutral	$6.41T	29.01	11.69%	0.55%	2.68%	56.38%

Nomura Research Institute Corporate Events

Nomura Research Institute Posts Double-Digit Profit Growth and Raises Annual Dividend Outlook

Nomura Research Institute reported solid growth for the nine months ended December 31, 2025, with revenue rising 6.0% year on year to ¥602.3 billion and operating profit climbing 16.0% to ¥118.8 billion, reflecting improved profitability. Profit attributable to owners of the parent increased 15.9% to ¥83.2 billion, while basic earnings per share reached ¥145.21, supported by a stronger balance sheet as equity attributable to owners of the parent rose to ¥501.7 billion and the equity ratio improved to 52.9%. The company maintained its previously announced guidance for the full fiscal year ending March 31, 2026, projecting revenue of ¥810.0 billion and profit attributable to owners of the parent of ¥104.0 billion, and also affirmed its dividend outlook, targeting a higher annual dividend of ¥74.00 per share compared with ¥63.00 in the prior fiscal year, signaling confidence in earnings growth and shareholder returns.

The most recent analyst rating on (JP:4307) stock is a Buy with a Yen7000.00 price target. To see the full list of analyst forecasts on Nomura Research Institute stock, see the JP:4307 Stock Forecast page.