CAC Holdings Corporation (4725) AI Stock Analysis

• Market Cap: ¥32.65B
• Dividend Yield: 4.82%
• Average Volume (3M): 20.47K
• Price to Earnings (P/E): 10.1
• Beta (1Y): 0.45
• Revenue Growth: -3.03%
• EPS Growth: 38.83%
• Country: JP
• Employees: 4,653
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 81.93
• Shares Outstanding: 20,541,400
• 10 Day Avg. Volume: 27,840
• 30 Day Avg. Volume: 20,470
• PEG Ratio: 1.97
• Price to Book (P/B): 1.00
• Price to Sales (P/S): 0.69
• P/FCF Ratio: 25.95
• 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: 65 Neutral
• Price Target: ¥2,044.00 ▼(-0.15% Downside)
• Action: Downgraded Date: 02/18/26
• Date: Action: Downgraded 02/18/26

The score is driven primarily by solid underlying financial quality (notably low leverage) but meaningfully offset by the latest year’s sharp revenue decline, margin pressure, and weaker operating cash flow. Valuation is supportive (low P/E and high yield), while technicals are a significant headwind with a clear downtrend and very weak momentum.

Positive Factors

Conservative balance sheet

Very low debt-to-equity and a sizeable equity base provide durable financial flexibility. This conservatism lowers insolvency risk, supports investment or working capital during downturns, and gives the company optionality for strategic moves like targeted M&A or restructuring without stressing liquidity.

Improving net margin trend

A multi-year improvement in net and gross margins indicates strengthening operating efficiency and pricing or mix benefits. Sustained margin expansion increases long-term earnings power and cash generation capacity, making the business more resilient to revenue variability and better able to fund strategic priorities.

Integrated IT services model

End-to-end systems integration plus ongoing operation/maintenance and consulting creates recurring revenue vectors and high client stickiness. This service breadth enables cross-sell, higher lifetime client value, and diversification across project and recurring service revenue, supporting steadier long-term cash flows.

Negative Factors

Severe revenue contraction (2025)

A ~60% year decline represents a structural hit to scale and revenue visibility. Such a material drop can impair fixed-cost absorption, damage client relationships or project pipelines, and force strategic retrenchment; recovery will likely take multiple quarters and stress margins and planning.

Weakened operating cash flow

Sharp deterioration in operating cash flow and cash conversion reduces internal funding for capex, working capital, and dividends. Even with low leverage, volatile cash generation raises refinancing or operational risk if revenue pressures persist, weakening the company's ability to invest or respond to shocks.

EBITDA margin compression

A notable fall in EBITDA margin signals either pricing pressure, adverse mix shifts, or rising costs. Reduced margin sustainability lowers free cash flow potential and constrains reinvestment into growth or client retention, increasing the chance of cost cuts that could harm long-term service quality and competitiveness.

CAC Holdings Corporation Business Overview & Revenue Model

Company Description

CAC Holdings Corporation, through its subsidiaries, provides information technology (IT) services worldwide. The company offers systems development, integration, operation, and management services, as well as human resource BPO/BTO services; drug development support services; mainframe, open system, Web-based system, and IT management solutions; and system consulting, and software planning and development services, as well as develops various kinds of hardware and software for factories. It also provides system planning and design, system integration, helpdesk, IT infrastructure, warranty management, and contracted software development services, as well as develops and sells packaged software. The company was founded in 1966 and is headquartered in Tokyo, Japan.

How the Company Makes Money

CAC Holdings Corporation generates revenue through multiple streams primarily centered around its IT services and consulting offerings. Key revenue streams include fees from system integration projects, recurring income from managed services and cloud solutions, and consulting fees for IT strategy and implementation services. The company also benefits from long-term contracts with clients, which provide steady income. Significant partnerships with technology providers and other enterprises enhance its service capabilities and market reach, contributing positively to its earnings. Additionally, CAC Holdings invests in research and development to stay ahead in technology trends, thereby creating new opportunities for revenue generation.

CAC Holdings Corporation Financial Statement Overview

Summary

Supported by a conservatively financed balance sheet (very low debt-to-equity) and improved multi-year net margin trend, but the latest year shows severe revenue contraction (-60.3%), margin compression (EBITDA margin down vs 2024), and weaker operating cash flow/cash conversion, which reduces confidence in near-term stability.

Income Statement

Profitability is solid for an IT services business, with net margin improving from ~3.4% (2020) to ~6.5% (2025) and gross margin trending higher versus earlier years. However, the latest year shows a sharp revenue contraction (2025 revenue growth -60.3%) and notable margin compression versus 2024 (EBITDA margin down from ~10.8% to ~7.0%), which raises questions about demand stability, mix, or one-off impacts.

Balance Sheet

The balance sheet looks conservatively financed with low leverage (debt-to-equity ~0.06–0.10 across the period; 2025 ~0.08) and a sizeable equity base. A watch item is that equity declined from 2024 to 2025, but overall leverage remains modest and financial flexibility appears strong.

Cash Flow

Cash generation is uneven. Free cash flow was strong in 2024 (~¥5.6B) but operating cash flow fell materially in 2025 (~¥1.6B), and cash conversion versus earnings weakened (operating cash flow to net income ~0.12 in 2025 vs ~0.55 in 2024). Free cash flow still covered a large portion of net income in 2025 (~0.87), but the volatility and weaker operating cash performance temper confidence.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	50.90B	50.59B	52.06B	50.54B	47.97B	47.94B
Gross Profit	13.57B	13.32B	13.57B	12.29B	11.60B	11.90B
EBITDA	6.44B	3.56B	5.63B	4.75B	4.46B	4.76B
Net Income	3.38B	3.27B	3.10B	2.47B	2.09B	2.48B
Balance Sheet
Total Assets	49.16B	53.72B	54.73B	48.53B	44.21B	47.26B
Cash, Cash Equivalents and Short-Term Investments	13.91B	16.23B	13.78B	11.04B	13.79B	11.63B
Total Debt	1.77B	2.93B	2.07B	2.64B	2.96B	3.03B
Total Liabilities	13.85B	17.90B	17.02B	16.19B	14.92B	15.86B
Stockholders Equity	34.86B	35.23B	37.37B	31.94B	28.62B	30.77B
Cash Flow
Free Cash Flow	0.00	1.35B	5.58B	67.00M	2.38B	2.50B
Operating Cash Flow	0.00	1.56B	5.71B	594.00M	2.63B	2.90B
Investing Cash Flow	0.00	-1.36B	-1.33B	1.25B	-591.00M	532.00M
Financing Cash Flow	0.00	-1.19B	-2.85B	-2.07B	-1.71B	-2.93B

CAC Holdings Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2047.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4725, the sentiment is Negative. The current price of 2047 is above the 20-day moving average (MA) of 1953.65, above the 50-day MA of 2007.61, and above the 200-day MA of 2017.67, indicating a bearish trend. The MACD of -29.79 indicates Negative momentum. The RSI at 43.08 is Neutral, neither overbought nor oversold. The STOCH value of 65.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4725.

CAC Holdings Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3762	78 Outperform	¥76.38B	17.11	17.96%	1.83%	13.23%	16.07%
9889	77 Outperform	¥94.16B	16.73	―	2.32%	5.09%	26.12%
2317	76 Outperform	¥160.18B	14.15	―	2.30%	13.82%	37.07%
4722	67 Neutral	¥161.03B	13.77	―	2.22%	9.29%	1.18%
9682	66 Neutral	¥181.68B	15.39	18.89%	2.78%	11.90%	60.66%
4725	65 Neutral	¥32.65B	10.11	10.34%	4.82%	-3.03%	38.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

CAC Holdings Corporation Corporate Events

CAC Holdings Updates Strategy to Lift Profitability and Market Valuation

CAC Holdings Corporation has reviewed progress on its capital-cost and share-price-conscious management initiatives and reported that its price-to-book ratio improved to 1.0 times for the fiscal year ended December 31, 2025, up 0.2 points from the previous year. Management, however, views this level as insufficient and is setting a higher PBR target, positioning further gains in profitability and capital efficiency as top priorities.

To reach these goals, the company plans to raise profitability by boosting value-added services via AI transformation and launching new businesses, while improving capital efficiency through reducing policy shareholdings and making more active use of leverage. CAC Holdings will also step up investor engagement by expanding dialogue opportunities, enhancing IR disclosure for individual investors, and introducing proprietary medium- to long-term KPIs, signaling a stronger focus on shareholder value and market valuation.

The most recent analyst rating on (JP:4725) stock is a Buy with a Yen2474.00 price target. To see the full list of analyst forecasts on CAC Holdings Corporation stock, see the JP:4725 Stock Forecast page.

CAC Holdings Posts Lower 2025 Profits but Lifts Dividend and Targets Modest 2026 Growth

CAC Holdings reported full-year 2025 consolidated net sales of ¥50.59 billion, down 2.8% year on year, with operating profit falling 24.0% and ordinary profit dropping 28.8%, although profit attributable to owners of the parent rose 5.7% on improved earnings per share. The company maintained solid financial health with an equity ratio of 65.6%, continued positive operating cash flow, raised its annual dividend to ¥100 per share with a payout ratio above 50%, and forecast modest growth in 2026 net sales and adjusted EBITDA while expanding its consolidation scope to include two newly acquired subsidiaries.

Despite weaker profitability metrics such as lower operating and ordinary profit margins, CAC Holdings is signaling shareholder-friendly capital allocation through higher dividends and stable cash flows. The modest 2026 guidance and the use of adjusted EBITDA as a headline KPI underscore a focus on steady cash-based performance, while the inclusion of INCULEAD CONSULTING LTD. and recomot Inc. points to strategic expansion that may support longer-term growth and reinforce its competitive position in the IT services market.

The most recent analyst rating on (JP:4725) stock is a Buy with a Yen2474.00 price target. To see the full list of analyst forecasts on CAC Holdings Corporation stock, see the JP:4725 Stock Forecast page.

CAC Holdings to Book ¥3 Billion Extraordinary Gain from Investment Securities Sale

CAC Holdings Corporation has resolved to sell a portion of its investment securities, specifically shares in one listed company, as part of a strategy to boost asset efficiency and secure funds to support future growth of the group’s business. The sale, expected to generate an estimated gain of approximately JPY 3 billion, will be recorded as extraordinary income in the fourth quarter of the fiscal year ending December 2025, with the company stating that this one-off gain does not currently prompt any change to its consolidated earnings forecast, signaling a limited immediate impact on its underlying performance but reinforcing its capital allocation discipline.

The most recent analyst rating on (JP:4725) stock is a Buy with a Yen2444.00 price target. To see the full list of analyst forecasts on CAC Holdings Corporation stock, see the JP:4725 Stock Forecast page.