IPS Co., Ltd. (4335) AI Stock Analysis

• Market Cap: ¥2.91B
• Dividend Yield: 3.28%
• Average Volume (3M): 1.67K
• Price to Earnings (P/E): 9.6
• Beta (1Y): 0.31
• Revenue Growth: 9.68%
• EPS Growth: 25.15%
• Country: JP
• Employees: 147
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 15.03
• Shares Outstanding: 2,466,000
• 10 Day Avg. Volume: 2,050
• 30 Day Avg. Volume: 1,670
• PEG Ratio: 0.51
• Price to Book (P/B): 1.65
• Price to Sales (P/S): 0.74
• P/FCF Ratio: 5.91
• 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: 81 Outperform
• Price Target: ¥1,350.00 ▲(16.98% Upside)

The score is driven primarily by strong financial quality (debt-free balance sheet, consistently high ROE, and solid profitability) and supported by attractive valuation (low P/E and ~3.26% dividend yield). Technicals are moderately positive but not strongly trending, and cash-flow volatility in prior years remains the key risk tempering the overall score.

Positive Factors

Debt-Free Balance Sheet

A debt-free balance sheet enhances financial stability and flexibility, allowing the company to invest in growth without the burden of interest payments.

Consistent Revenue Growth

Steady revenue growth indicates strong market demand and effective business strategies, supporting long-term business sustainability and expansion.

Strong ROE

Consistently high ROE reflects efficient management and profitability, enhancing shareholder value and indicating robust business performance.

Negative Factors

Cash Flow Volatility

Volatile cash flow can undermine financial stability and limit the company's ability to fund operations and growth, posing a risk to long-term sustainability.

Declining Gross Margin

A declining gross margin suggests increasing costs or pricing pressures, which could erode profitability if not managed effectively over time.

Internal Capital Funding

Relying on internal capital for growth may limit the company's ability to scale quickly, potentially constraining competitive positioning in a fast-evolving market.

IPS Co., Ltd. Business Overview & Revenue Model

Company Description

IPS Co., Ltd. (4335) is a Japanese company that specializes in providing information technology services and solutions. The company is primarily involved in the development and implementation of systems for various industries, including telecommunications, finance, and manufacturing. IPS Co., Ltd. offers a range of services, including software development, IT consulting, and system integration, helping businesses optimize their operations through innovative technology solutions.

How the Company Makes Money

IPS Co., Ltd. generates revenue through its diverse portfolio of IT services and solutions. The company earns money by offering software development services tailored to the specific needs of its clients across different sectors. Additionally, it provides IT consulting services, guiding businesses in implementing effective technology strategies. System integration services also contribute to the company's earnings, as it helps clients integrate and streamline their IT infrastructure. IPS Co., Ltd. may also engage in strategic partnerships with technology providers to enhance its service offerings and expand its market reach.

IPS Co., Ltd. Financial Statement Overview

Summary

Fundamentals are strong overall: steady revenue growth (2022–2025) and solid profitability (2025 net margin ~7.3%, EBIT margin ~9.7%). The balance sheet is exceptionally conservative with no debt and consistently strong ROE (~15%–17%). The main drag is cash-flow consistency, with negative operating/free cash flow in 2022 and 2024 despite a strong rebound in 2025.

Income Statement

Revenue has expanded steadily from 2022–2025 (¥2.73B to ¥3.73B), and profitability is healthy for an IT services business, with 2025 net margin around 7.3% and EBIT margin near 9.7%. However, gross margin has drifted down from ~32.5% (2023) to ~29.6% (2025), suggesting some cost or pricing pressure even as earnings remain solid.

Balance Sheet

The balance sheet is very conservative, with effectively no debt (debt-to-equity at 0.0 in recent years) and steadily rising equity (¥1.11B in 2021 to ¥1.68B in 2025). Returns on equity are consistently strong (~15%–17% across 2021–2025), indicating good profitability without relying on leverage; the main limitation is that growth is funded primarily through internal capital, which can cap acceleration if investment needs rise.

Cash Flow

Cash generation is uneven: operating and free cash flow were negative in 2022 and 2024, but rebounded strongly in 2025 (operating cash flow ¥539M; free cash flow ¥468M). While 2025 cash flow is supportive of earnings (free cash flow running at ~87% of net income), the prior-year swings increase confidence risk around working-capital volatility and cash conversion consistency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.73B	3.73B	3.13B	2.83B	2.73B	2.50B
Gross Profit	1.11B	1.11B	952.58M	919.55M	757.03M	777.66M
EBITDA	376.86M	378.06M	314.19M	312.72M	266.13M	294.13M
Net Income	271.18M	271.97M	226.46M	212.85M	177.59M	185.77M
Balance Sheet
Total Assets	2.91B	2.91B	2.59B	2.28B	1.90B	1.91B
Cash, Cash Equivalents and Short-Term Investments	1.23B	1.23B	1.03B	1.19B	795.40M	1.17B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	1.23B	1.23B	1.10B	951.08M	720.31M	798.38M
Stockholders Equity	1.68B	1.68B	1.48B	1.33B	1.18B	1.11B
Cash Flow
Free Cash Flow	0.00	467.69M	-79.92M	490.50M	-259.07M	872.94M
Operating Cash Flow	0.00	538.81M	-76.37M	492.78M	-257.87M	872.94M
Investing Cash Flow	0.00	-250.92M	-12.38M	-10.55M	8.29M	-171.00K
Financing Cash Flow	0.00	-88.24M	-73.62M	-87.93M	-121.53M	-13.65M

IPS Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1154.00
• 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:4335, the sentiment is Positive. The current price of 1154 is below the 20-day moving average (MA) of 1208.65, below the 50-day MA of 1178.86, and below the 200-day MA of 1176.07, indicating a bullish trend. The MACD of 10.48 indicates Positive momentum. The RSI at 59.65 is Neutral, neither overbought nor oversold. The STOCH value of 41.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4335.

IPS Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4335	81 Outperform	¥2.91B	9.62	―	3.28%	9.68%	25.15%
4421	79 Outperform	¥2.94B	10.89	―	2.86%	5.74%	5.97%
5868	73 Outperform	¥4.08B	9.96	―	0.94%	14.35%	105.59%
3970	66 Neutral	¥2.56B	-11.15	―	4.29%	15.64%	-268.60%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
7072	60 Neutral	¥3.28B	21.97	―	―	12.30%	173.09%
5618	46 Neutral	¥2.65B	-9.17	―	―	23.63%	64.65%