NexTone Inc (7094) AI Stock Analysis

• Market Cap: ¥16.85B
• Dividend Yield: N/A
• Average Volume (3M): 174.95K
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.74
• Revenue Growth: 10.06%
• EPS Growth: 47.36%
• Country: JP
• Employees: 298
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 19.68
• Shares Outstanding: 9,940,800
• 10 Day Avg. Volume: 173,240
• 30 Day Avg. Volume: 174,950
• PEG Ratio: 0.57
• Price to Book (P/B): 2.48
• Price to Sales (P/S): 0.61
• P/FCF Ratio: 5.76
• 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): 91.1
• Revenue Forecast (FY): ¥22.25B

• Rating: 67 Neutral
• Price Target: ¥1,795.00 ▲(6.09% Upside)
• Action: Downgraded Date: 12/30/25
• Date: Action: Downgraded 12/30/25

The score is primarily supported by strong financial quality—especially the debt-free balance sheet and consistent free-cash-flow generation—offset by margin compression. Technical indicators are mixed-to-weak with the stock below key longer-term moving averages and negative MACD, while valuation appears moderate based on the ~21x P/E and no dividend data.

Positive Factors

Debt-Free Balance Sheet

A debt-free balance sheet reduces financial risk and enhances stability, allowing NexTone to navigate economic fluctuations without the burden of interest obligations.

Revenue Growth

Strong revenue growth indicates robust market demand and effective business strategies, positioning NexTone for continued expansion and competitive advantage.

Positive Cash Flow

Consistently positive cash flow demonstrates NexTone's ability to generate sufficient internal funds to support operations and reinvest in growth opportunities.

Negative Factors

Margin Compression

Declining margins suggest rising costs or pricing pressures, which could impact profitability if not addressed, potentially limiting future earnings growth.

Volatile Free Cash Flow

Volatile free cash flow can indicate instability in cash generation, potentially affecting NexTone's ability to fund operations and growth consistently.

Profitability Pressure

Decreasing EBIT and EBITDA margins highlight profitability challenges, which may require strategic adjustments to improve cost management and operational efficiency.

NexTone Inc Business Overview & Revenue Model

Company Description

NexTone Inc. provides music copyright management and licensing solutions in Japan and internationally. It also distributes music and video content for various music distribution platforms; and offers marketing and promotion services for entertainment businesses. In addition, the company provides agency services for music publishers, including drafting contracts and royalties payment statements, distribution of royalties, consultation on music copyrights, and drafting various other licenses and applications, as well as drafting and submission of notice of work to copyright management services companies. Further, it develops content distribution-related systems. The company was incorporated in 2000 and is based in Tokyo, Japan.

How the Company Makes Money

NexTone Inc generates revenue through its core services of music copyright management and digital content distribution. The company earns money primarily via the collection and distribution of royalties on behalf of artists, composers, and publishers. By providing licensing solutions, NexTone facilitates the use of music in digital and physical formats, ensuring that creators receive proper compensation for their works. Additionally, the company may engage in strategic partnerships with digital platforms and other entities in the entertainment industry to expand its reach and increase revenue opportunities. These partnerships often involve revenue-sharing agreements that further contribute to NexTone's earnings.

NexTone Inc Financial Statement Overview

Summary

Strong revenue scaling and consistently positive free cash flow support the score, and the balance sheet is very low risk with zero debt and rising equity. The main constraint is weakening profitability, with gross, EBIT/EBITDA, and net margins compressing versus 2022–2023 levels.

Income Statement

Revenue has scaled strongly over the period (from 2020 to 2025), with a particularly sharp step-up in the latest annual period. Profitability remains positive, but margins have compressed versus earlier years: gross margin eased to ~24.9% (2025) from the high-20%s (2020–2023), and net margin declined to ~3.6% (2025) from ~7.2% (2023). EBIT and EBITDA margins also trended down meaningfully, suggesting higher costs or a less favorable mix despite continued growth.

Balance Sheet

The balance sheet is conservatively positioned with zero total debt across all reported years and steadily rising equity (to ~¥4.76B in 2025). Returns on equity have been consistently solid (generally low-to-mid teens), indicating the company is generating profits without financial leverage. The main trade-off is that the strong capital position is achieved without debt, which limits potential leverage-driven upside but materially reduces financial risk.

Cash Flow

Cash generation is a clear strength: operating cash flow and free cash flow are positive each year, and in 2025 free cash flow (~¥2.05B) nearly matched net income (free cash flow to net income ~0.95), indicating strong earnings quality. However, free cash flow has shown volatility (declines in 2022 and 2024), and operating cash flow relative to revenue remains modest (roughly high-single to low-double digits based on provided figures), which can leave less cushion if profitability stays pressured.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	19.95B	19.41B	13.43B	8.81B	7.49B	6.12B
Gross Profit	4.97B	4.83B	3.50B	2.41B	2.04B	1.64B
EBITDA	1.67B	1.56B	1.12B	992.86M	846.20M	654.60M
Net Income	738.00M	692.00M	531.13M	631.27M	482.55M	376.98M
Balance Sheet
Total Assets	15.11B	14.83B	13.16B	7.82B	6.55B	5.59B
Cash, Cash Equivalents and Short-Term Investments	9.95B	9.63B	8.05B	6.04B	5.19B	4.44B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	9.17B	9.12B	8.01B	4.25B	3.63B	3.02B
Stockholders Equity	4.97B	4.76B	4.05B	3.57B	2.92B	2.58B
Cash Flow
Free Cash Flow	0.00	2.05B	636.82M	898.74M	893.63M	1.05B
Operating Cash Flow	0.00	2.15B	1.38B	1.16B	1.12B	1.26B
Investing Cash Flow	0.00	-569.00M	695.96M	-323.78M	-228.02M	-213.22M
Financing Cash Flow	0.00	0.00	-65.68M	12.44M	-140.11M	79.74M

NexTone Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1692.00
• 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:7094, the sentiment is Negative. The current price of 1692 is below the 20-day moving average (MA) of 1694.50, below the 50-day MA of 1708.84, and below the 200-day MA of 1901.19, indicating a neutral trend. The MACD of 0.95 indicates Negative momentum. The RSI at 48.46 is Neutral, neither overbought nor oversold. The STOCH value of 48.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7094.

NexTone Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5845	74 Outperform	¥26.62B	18.07	―	3.49%	3.45%	35.36%
4809	72 Outperform	¥20.54B	10.09	―	3.27%	7.63%	11.84%
7094	67 Neutral	¥16.85B	19.82	―	―	10.06%	47.36%
7373	67 Neutral	¥28.38B	14.24	―	1.02%	24.97%	37.84%
9216	64 Neutral	¥25.56B	188.15	―	4.78%	-3.81%	-82.38%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7814	52 Neutral	¥28.29B	4.45	―	1.57%	9.04%	-0.91%

NexTone Inc Corporate Events

NexTone Inc. Reports Strong Financial Growth and Positive Outlook

NexTone Inc. reported a significant improvement in its financial performance for the six months ending September 30, 2025, with net sales increasing by 9% and operating profit surging by 55.4% compared to the previous year. The company anticipates continued growth, projecting an 18.5% increase in net sales and a 79.1% rise in operating profit for the full fiscal year ending March 31, 2026, signaling strong market positioning and potential positive implications for stakeholders.