IPS, Inc. (4390) AI Stock Analysis

• Market Cap: ¥39.00B
• Dividend Yield: 1.28%
• Average Volume (3M): 140.12K
• Price to Earnings (P/E): 8.8
• Beta (1Y): 1.08
• Revenue Growth: -7.46%
• EPS Growth: 11.57%
• Country: JP
• Employees: 557
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 85.99
• Shares Outstanding: 13,066,700
• 10 Day Avg. Volume: 110,180
• 30 Day Avg. Volume: 140,120
• PEG Ratio: -0.87
• Price to Book (P/B): 1.78
• Price to Sales (P/S): 1.81
• P/FCF Ratio: -50.06
• 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): 238.25
• Revenue Forecast (FY): ¥17.47B

• Rating: 80 Outperform
• Price Target: ¥3,433.00 ▲(13.30% Upside)
• Action: Reiterated Date: 11/18/25
• Date: Action: Reiterated 11/18/25

IPS, Inc. receives a strong overall score due to robust financial performance and positive technical analysis. The company's revenue growth and stable balance sheet are significant strengths, while the technical indicators suggest strong market momentum. Valuation is reasonable, though profitability and cash flow management need attention.

Positive Factors

Sustained revenue expansion

Revenue more than doubled over five years, creating a larger, more diversified top-line base. That scale supports durable investments in product development, distribution and commercial scale, improving the firm's ability to absorb shocks and fund strategic initiatives over multiple quarters.

Improving gross margins

A rising gross margin to 54.23% signals sustained cost control and/or pricing power at the core product level. Higher gross margins provide operating leverage, enabling the company to invest in growth or defend profitability through cyclical pressure over the medium term.

Stronger equity and balanced leverage

Equity growth and an improved equity ratio indicate a healthier capital base and moderate leverage. A stronger balance sheet enhances resilience to downturns, supports strategic spending or M&A, and reduces immediate refinancing risk over a multi-quarter horizon.

Negative Factors

Volatile free cash flow

Negative and volatile free cash flow despite positive operating cash flow suggests capex or working-capital swings are consuming liquidity. Persistent FCF weakness undermines the firm's ability to self-fund capex, pay down debt or sustain distributions without external financing over the medium term.

Declining net profit margin

A falling net margin indicates growing pressure below gross profit—higher SG&A, interest or other costs—reducing retained earnings and reinvestment capacity. Lower net profitability makes the company more vulnerable to margin compression and cyclical downturns across reporting periods.

Rising total debt

An upward trend in total debt increases interest and refinancing exposure. Given volatile free cash flow and narrower net margins, rising indebtedness could constrain financial flexibility, elevate refinancing risk and limit strategic options over the next several quarters.

IPS, Inc. Business Overview & Revenue Model

Company Description

IPS, Inc. provides IT and telecommunications services in Japan and the Philippines. The company provides internet connection services; data center services; domestic telecommunications services comprising toll free services, service for MVNO businesses, trunk, and value-added services; network services for local and overseas telecom companies; and international telecommunication lines. It also offers CloudSigma, a cloud computing service; and AmeyoJ, a contact center management software, as well as business process outsourcing services. In addition, the company operates clinics that offer medical services, including laser-eye surgery, aesthetic dermatology, cosmetic dentistry, and cataract surgery; and an online pharmacy. IPS, Inc. was incorporated in 1991 and is based in Tokyo, Japan.

How the Company Makes Money

IPS, Inc. generates revenue through multiple streams, primarily by offering consultancy and engineering services for large-scale industrial projects. The company charges fees for project management and engineering services based on the project scope and duration. Additionally, IPS earns money through the sale of proprietary software and automation tools that improve operational efficiencies for clients. Significant partnerships with industry leaders enhance IPS's service offerings, allowing the company to tap into new markets and expand its customer base. Furthermore, recurring revenue from maintenance contracts and support services provides a stable income stream, contributing to the company's overall profitability.

IPS, Inc. Financial Statement Overview

Summary

IPS, Inc. shows strong revenue growth and a stable balance sheet. However, profitability margins are under pressure, and cash flow volatility, particularly in Free Cash Flow, indicates a need for improved cash management.

Income Statement

IPS, Inc. has demonstrated strong growth in revenue, with a notable increase from ¥6.5 billion in 2020 to ¥15.3 billion in 2025. The Gross Profit Margin consistently improved, reaching 54.23% in 2025, indicating efficient cost management. However, the Net Profit Margin decreased from 20.60% in 2024 to 16.67% in 2025, reflecting some pressure on profitability despite revenue growth. Overall, the company shows robust growth with room for improving net profitability.

Balance Sheet

IPS, Inc. has a solid equity position, with stockholders' equity growing from ¥3.9 billion in 2020 to ¥15.5 billion in 2025. The Debt-to-Equity Ratio is 0.65 as of 2025, indicating a balanced leverage profile. The Equity Ratio improved to 36.95% in 2025, suggesting a stable financial structure. However, the rising debt levels may pose a risk if not managed well, especially given the increase in Total Debt over the years.

Cash Flow

The Free Cash Flow has been volatile, turning negative in recent years, which is a concern despite positive Operating Cash Flow of ¥704 million in 2025. The company needs to stabilize its cash flow generation to support long-term investments and debt obligations. The Operating Cash Flow to Net Income Ratio improved, signaling better cash conversion, yet Free Cash Flow remains a challenge.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	15.03B	15.26B	14.12B	12.35B	10.73B	9.52B
Gross Profit	8.26B	8.28B	7.08B	5.83B	4.12B	3.66B
EBITDA	5.81B	5.44B	5.36B	3.76B	3.30B	2.50B
Net Income	2.54B	2.54B	2.83B	2.29B	1.89B	1.49B
Balance Sheet
Total Assets	41.42B	42.03B	33.53B	25.13B	18.42B	11.76B
Cash, Cash Equivalents and Short-Term Investments	3.81B	3.92B	4.23B	6.88B	5.78B	3.63B
Total Debt	10.41B	10.07B	10.10B	6.93B	3.05B	1.96B
Total Liabilities	21.24B	21.05B	18.35B	13.27B	9.29B	5.01B
Stockholders Equity	14.05B	15.53B	11.56B	9.62B	7.50B	5.52B
Cash Flow
Free Cash Flow	6.50M	-551.00M	-5.20B	-2.69B	1.05B	-176.74M
Operating Cash Flow	145.50M	704.00M	-574.00M	2.64B	3.58B	1.64B
Investing Cash Flow	-174.00M	-2.54B	-4.74B	-5.51B	-2.66B	-1.89B
Financing Cash Flow	61.50M	1.38B	2.31B	3.58B	1.07B	1.33B

IPS, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3030.00
• 50DMA: Negative
• 100DMA: Negative
• 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:4390, the sentiment is Negative. The current price of 3030 is below the 20-day moving average (MA) of 3121.20, below the 50-day MA of 3070.56, and above the 200-day MA of 2886.99, indicating a neutral trend. The MACD of 24.18 indicates Positive momentum. The RSI at 40.80 is Neutral, neither overbought nor oversold. The STOCH value of 55.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4390.

IPS, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4390	80 Outperform	¥39.00B	8.81	―	1.28%	-7.46%	11.57%
3834	80 Outperform	¥18.93B	13.52	―	3.53%	5.03%	-9.55%
9445	75 Outperform	¥9.35B	12.83	―	3.85%	1.75%	24.87%
9424	66 Neutral	¥22.19B	23.11	―	―	30.15%	31.28%
3776	63 Neutral	¥14.01B	37.44	―	1.01%	17.19%	-43.91%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3774	60 Neutral	¥392.81B	19.63	15.67%	1.31%	12.48%	18.38%

IPS, Inc. Corporate Events

IPS Expands Philippine Submarine Cable Footprint Ahead of Open-Access Telecom Reforms

IPS, Inc. outlined its expanding role in Asia-Pacific digital infrastructure, highlighting participation in the 8,000 km Candle international submarine cable connecting Japan, the Philippines, and Singapore, scheduled to start commercial service in March 2028. The company is leading construction and operation of the Baler Cable Landing Station on Luzon’s Pacific coast, designed to host up to four international cables including Candle and link them to the Philippine domestic network, and leveraged its existing assets such as the Philippine Domestic Submarine Cable Network (PDSCN) and acquired capacity on the C2C international cable system to offer integrated domestic and international connectivity. IPS expects the Philippines’ Konektadong Pinoy (Open Access in Data Transmission) Act to lower entry barriers and spur regional telecom operators, potentially broadening its customer base and enhancing network redundancy and open-access connectivity, thereby strengthening its competitive position in regional telecommunications infrastructure and services.

The most recent analyst rating on (JP:4390) stock is a Hold with a Yen3213.00 price target. To see the full list of analyst forecasts on IPS, Inc. stock, see the JP:4390 Stock Forecast page.

IPS Posts Higher Nine-Month Earnings and Confirms Full-Year Forecast, Stable Dividend

IPS, Inc. reported consolidated net sales of ¥11.7 billion for the nine months ended December 31, 2025, up 4.4% year on year, with operating profit rising 15.0% to ¥3.7 billion and profit attributable to owners of parent increasing 12.5% to ¥2.7 billion, indicating continued earnings growth despite a slowdown from the previous year’s rapid expansion. The company’s financial position remained solid, with total assets climbing to ¥44.5 billion and equity edging higher, while management kept its full-year forecast unchanged, targeting ¥18.0 billion in net sales and a 17.9% increase in full-year profit, and confirmed a stable dividend policy of ¥40 per share for the fiscal year, signaling confidence in earnings sustainability and ongoing shareholder returns.

The most recent analyst rating on (JP:4390) stock is a Hold with a Yen3213.00 price target. To see the full list of analyst forecasts on IPS, Inc. stock, see the JP:4390 Stock Forecast page.

IPS Completes Corrective Measures After Unauthorized IP Phone Number Use, Strengthens Governance at Subsidiary

IPS, Inc. announced that it has submitted a report to Japan’s National Police Agency and the Ministry of Internal Affairs and Communications detailing preventive measures following an incident of unauthorized use of an IP phone number supplied by its subsidiary IPS Pro, Inc. to a Hong Kong corporation. The company said it has completed all actions requested by the authorities, confirmed there are currently no other transactions posing similar risk, and has overhauled IPS Pro’s management structure by appointing external personnel and revising its executive framework to strengthen internal controls. IPS and IPS Pro emphasized their recognition of their social responsibility as telecommunications service providers and pledged to implement robust recurrence-prevention measures, enhance governance, and pursue sustainable, long-term growth while working to restore trust and support the development of telecom services in Japan and Asia.

The most recent analyst rating on (JP:4390) stock is a Hold with a Yen3979.00 price target. To see the full list of analyst forecasts on IPS, Inc. stock, see the JP:4390 Stock Forecast page.

IPS to Book US$8.35 Million Dividend from Subsidiary as Non-Operating Income

IPS, Inc. announced that it will receive a dividend of US$8.35 million (approximately JPY 1,306 million) from its consolidated subsidiary ISMO Pte. Ltd., following a resolution dated December 29, 2025, with payment scheduled for January 5, 2026. The dividend will be recognized as non-operating income in IPS’s non-consolidated financial statements for the fiscal year ending March 31, 2026, but will have no impact on its consolidated financial results, signaling an internal capital flow that strengthens the parent’s standalone earnings without altering the group’s overall profit profile for stakeholders.

The most recent analyst rating on (JP:4390) stock is a Buy with a Yen4198.00 price target. To see the full list of analyst forecasts on IPS, Inc. stock, see the JP:4390 Stock Forecast page.

IPS Tightens Governance After IP Phone Number Misused in Caller ID Scam

IPS, Inc. disclosed that an IP phone number provided by its subsidiary IPS Pro, Inc. to a Hong Kong-based client was fraudulently used for caller ID spoofing in early 2025, making scam calls appear to originate from Japanese police stations and other authorities. After detecting the suspicious activity in March, IPS Pro swiftly reconfigured its systems to block fraudulent display of the affected number and terminated service to the client, while an internal review found no other transactions with similar risks. The company is using the incident to tighten regulatory compliance and governance, including disabling caller ID functions for non-IPSPRO numbers where appropriate, revising systems and overseas contract structures, strengthening training on telecom laws and industry guidelines, and overhauling its management structure by January 2026 with external telecom experts and director changes. Directors involved have voluntarily agreed to return part of their remuneration, and the company emphasized that the financial impact is limited and its domestic telecom earnings forecast remains unchanged, as it seeks to restore trust and reinforce its social responsibility as a telecommunications provider.

The most recent analyst rating on (JP:4390) stock is a Buy with a Yen4198.00 price target. To see the full list of analyst forecasts on IPS, Inc. stock, see the JP:4390 Stock Forecast page.