Justsystems Corporation (4686) AI Stock Analysis

• Market Cap: ¥226.39B
• Dividend Yield: 0.43%
• Average Volume (3M): 102.36K
• Price to Earnings (P/E): 21.1
• Beta (1Y): 0.52
• Revenue Growth: 15.01%
• EPS Growth: 19.66%
• Country: JP
• Employees: 303
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 60.00
• Shares Outstanding: 64,224,800
• 10 Day Avg. Volume: 88,210
• 30 Day Avg. Volume: 102,360
• PEG Ratio: 2.96
• Price to Book (P/B): 2.06
• Price to Sales (P/S): 4.86
• P/FCF Ratio: 14.45
• 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: 66 Neutral
• Price Target: ¥3,807.00 ▼(-12.88% Downside)
• Action: Downgraded Date: 03/05/26
• Date: Action: Downgraded 03/05/26

The score is anchored by very strong financial performance (exceptional margins, debt-free balance sheet, solid cash generation). This is meaningfully offset by weak technicals (downtrend across key moving averages with negative MACD), while valuation is reasonable but the low dividend yield offers limited support.

Positive Factors

High Profitability Margins

Sustained, very high gross, operating and net margins reflect durable pricing power and efficient cost structure in core Japanese-language software. These margins support internal funding for R&D, support and enterprise sales, enhance cash generation and provide resilience across cycles.

Debt-free, Conservative Balance Sheet

A zero-debt balance sheet materially lowers financial risk and gives management strategic optionality. It enables stable capital allocation to product development, enterprise deployments, or M&A without refinancing risk, and provides a durable buffer in downturns.

Strong Cash Generation & FCF Conversion

Free cash flow roughly matching net income demonstrates high earnings quality and conversion, supporting repeatable funding for maintenance, upgrades and enterprise support. Reliable FCF underpins long-term reinvestment and shareholder return strategies.

Negative Factors

Modest and Uneven Revenue Growth

Top-line growth is modest and uneven, limiting scalability of an otherwise highly profitable business. Slower revenue expansion constrains long-term EPS leverage, makes it harder to sustain elevated ROE, and increases reliance on margin preservation for earnings growth.

Easing Margins and Lower ROE

Declining margins from peak levels and a falling ROE as equity grows imply profit expansion is not fully keeping pace with balance-sheet growth. This structural pressure can slow per-share earnings growth and reduce operational gearing benefits over time.

Volatile Cash Flow Coverage

Inconsistent cash coverage of earnings and year-to-year FCF volatility reduce predictability for dividends, capex or strategic investments. This variability increases execution risk and complicates long-term planning even with a strong recent cash conversion.

Justsystems Corporation Business Overview & Revenue Model

Company Description

JustSystems Corporation plans, develops, and provides software and related services primarily in Japan. The company offers Advanced Technology of Kana-Kanji transfer, a Japanese language input system for writing text in Japanese; and SMILE ZEMI, an e-learning system for elementary school students for study using a dedicated tablet device. It also provides Actionista!, a business intelligence tool that lets anyone engage in analysis; a suite of office-compatible software, such as JUST Office, JUST Government, and JUST Police to support the input of specific Japanese names and places; and ATOK Medical, a medical dictionary that enables conversion of complex disease and pharmaceutical names. The company serves individuals, private sector companies, government institutions, local municipalities, police forces, schools, and hospitals. JustSystems Corporation was founded in 1979 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Justsystems Corporation generates revenue primarily through the sale of its software products and services. The company's key revenue streams include licensing fees from its flagship software products like Ichitaro and ATOK, subscription services for cloud-based solutions, and enterprise software solutions for data management and educational technology. Furthermore, Justsystems engages in strategic partnerships and collaborations with other technology firms to enhance and distribute its products, thereby expanding its market reach and contributing to its earnings.

Justsystems Corporation Financial Statement Overview

Summary

High-quality fundamentals supported by best-in-class profitability (very strong gross, operating, and net margins), a debt-free balance sheet, and generally solid cash generation. Offsets are modest/uneven revenue growth and some variability in cash flow conversion.

Income Statement

Profitability is a standout: the latest annual period shows very strong gross margin (~78%), operating margin (~41%), and net margin (~28%). Revenue has been generally stable over the last several years, with a small decline in 2024 followed by a return to growth in 2025. The main weakness is that top-line growth is modest overall versus the level of profitability, and margins eased from the 2023 peak even though they remain exceptionally high.

Balance Sheet

The balance sheet is exceptionally conservative with zero debt across the periods provided, which meaningfully lowers financial risk and increases flexibility. Equity and total assets have steadily grown over time, supporting balance-sheet resilience. A modest watch item is that returns on equity have come down from earlier highs (notably below 2021–2022 levels), suggesting profitability is not scaling as fast as the expanding equity base.

Cash Flow

Cash generation is solid, with free cash flow closely matching net income in the latest year (roughly 100%), indicating good earnings quality and conversion. However, cash flow coverage of earnings has been inconsistent (below 1.0 in multiple years), and free cash flow dipped in 2024 before rebounding strongly in 2025—showing some volatility despite the overall healthy level of cash generation.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	46.56B	44.55B	40.98B	41.95B	41.68B	41.17B
Gross Profit	36.58B	34.77B	32.43B	33.17B	31.88B	29.91B
EBITDA	21.74B	20.62B	19.27B	21.09B	19.04B	16.87B
Net Income	13.05B	12.33B	11.64B	13.40B	12.16B	10.96B
Balance Sheet
Total Assets	127.76B	121.04B	109.10B	99.46B	86.22B	75.40B
Cash, Cash Equivalents and Short-Term Investments	105.53B	100.57B	89.85B	80.14B	67.15B	56.01B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	19.50B	16.01B	15.10B	15.78B	14.92B	14.33B
Stockholders Equity	108.25B	105.03B	94.00B	83.68B	71.30B	61.07B
Cash Flow
Free Cash Flow	0.00	14.98B	10.53B	14.31B	12.12B	11.16B
Operating Cash Flow	0.00	15.02B	13.05B	16.80B	14.08B	12.99B
Investing Cash Flow	0.00	-27.13B	-8.56B	-3.85B	-2.02B	-3.82B
Financing Cash Flow	0.00	-1.28B	-1.28B	-1.03B	-1.03B	-641.00M

Justsystems Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4370.00
• 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:4686, the sentiment is Negative. The current price of 4370 is above the 20-day moving average (MA) of 3995.75, below the 50-day MA of 4599.30, and below the 200-day MA of 4403.96, indicating a bearish trend. The MACD of -282.23 indicates Positive momentum. The RSI at 19.49 is Positive, neither overbought nor oversold. The STOCH value of 10.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4686.

Justsystems Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3741	75 Outperform	¥37.06B	19.37	―	1.74%	21.97%	15.89%
3915	68 Neutral	¥20.68B	9.96	―	―	17.93%	91.21%
4475	68 Neutral	¥30.88B	27.58	―	0.39%	30.59%	65.14%
4686	66 Neutral	¥226.39B	21.08	―	0.43%	15.01%	19.66%
3850	65 Neutral	¥15.04B	25.11	―	0.91%	15.28%	60.07%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3778	52 Neutral	¥113.74B	367.27	―	0.14%	36.42%	28.23%

Justsystems Corporation Corporate Events

Justsystems Delivers Double-Digit Profit Growth and Higher EPS for Nine Months to December 2025

Justsystems Corporation reported robust results for the nine months ended December 31, 2025, with net sales rising 16.8% year on year to ¥38.5 billion and operating profit climbing 24.0% to ¥17.5 billion. Ordinary profit increased 24.9% to ¥17.9 billion, while profit attributable to owners of parent grew 24.2% to ¥12.1 billion, lifting basic earnings per share to ¥189.11 from ¥152.21 a year earlier. The company’s financial position also strengthened, as total assets expanded to ¥132.2 billion and net assets to ¥115.7 billion, pushing the equity ratio to 87.5%. Reflecting this solid performance and balance sheet, Justsystems maintained its dividend stance, having already paid a ¥12.00 interim dividend and forecasting a full-year total of ¥24.00 per share for the fiscal year ending March 31, 2026.

The most recent analyst rating on (JP:4686) stock is a Buy with a Yen5392.00 price target. To see the full list of analyst forecasts on Justsystems Corporation stock, see the JP:4686 Stock Forecast page.