Argo Graphics Inc. (7595) AI Stock Analysis

• Market Cap: ¥104.26B
• Dividend Yield: 2.13%
• Average Volume (3M): 209.16K
• Price to Earnings (P/E): 5.9
• Beta (1Y): 0.54
• Revenue Growth: 7.64%
• EPS Growth: 13.90%
• Country: JP
• Employees: 1,135
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 172.93
• Shares Outstanding: 80,000,000
• 10 Day Avg. Volume: 250,290
• 30 Day Avg. Volume: 209,156
• PEG Ratio: 1.05
• Price to Book (P/B): 1.93
• Price to Sales (P/S): 1.59
• P/FCF Ratio: 19.20
• 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: 80 Outperform
• Price Target: ¥1,657.00 ▲(1.91% Upside)

The score is driven primarily by strong financial quality—improving margins and an excellent zero-debt balance sheet—offset by some cash-flow conversion volatility in 2025. Technicals add support with price above key moving averages and positive MACD, while valuation is reasonable with a modest dividend yield.

Positive Factors

Improving Profitability

Sustained margin expansion and a high EBIT margin indicate the company has improved operating leverage and pricing or cost control. This durable profitability boost supports cash generation, reinvestment capacity and resilience through business cycles over the next several months.

Very Conservative Balance Sheet

An entirely debt-free balance sheet with steadily rising equity provides lasting financial flexibility: it lowers default risk, enables funding of capex or M&A from internal resources, and cushions operational shocks, strengthening long-term solvency and strategic optionality.

Strong Free Cash Flow vs Earnings

High free cash flow conversion relative to reported earnings underpins durable shareholder returns and internal funding for growth. Over several months this supports dividends, R&D or selective investments without reliance on external financing, enhancing self-funded growth potential.

Negative Factors

Cash-Flow Conversion Volatility

Meaningful swings in operating cash flow coverage reflect working-capital timing or collection risks that can impair the company’s ability to fund operations and investments predictably. This variability raises forecasting risk and may force trade-offs between growth and liquidity.

Uneven and Slowing Revenue Growth

While multi-year revenue gains are positive, the uneven trajectory and deceleration to low single-digit growth reduce visibility into sustainable top-line momentum. Slower growth increases reliance on margin gains to drive profitability and limits runway for scale-driven advantages.

Gross Margin Pressure

A recent decline in gross margin signals vulnerability to input cost increases or unfavorable business mix. If structural, this pressure can erode the company’s margin cushion and require sustained operational improvements or pricing power to maintain current profit levels over coming quarters.

Argo Graphics Inc. Business Overview & Revenue Model

Company Description

ARGO GRAPHICS Inc. provides technical solutions in Japan. The company provides PLM solutions to organize elements related to product development; HPC solutions that enable processing of technical calculations through system design/construction; and IT solutions, which offer virtualization of server/client, server/storage consolidation, and IT infrastructure. It also provides a range of services to support its clients, including consulting for improving operations; system development for process construction; system realization/construction; and training/operational support. In addition, the company offers CAE analysis, analysis tool development, engineering experimentation and measurement, 3D CAD modeling, engineer education, and customer support services; human resource, computer system operation, and data entry services; and system development, IT hardware sales and consulting, and IT services. Further, it engages in the DTP software sale and system integration, quality management software sale, document management software development and sale, and implementation of information sharing system; architecture and sale of the system for scientific computation; computer cluster sale and development support; and sale and support of 2D CAD software and 3D design CAD. Additionally, the company is involved in the development and sale of support software for power semiconductor and liquid crystal panel development; PDM software development, sale, and construction support; development and sale of CAM data of press die; production and sale of engineering animations; and provision of development support for IT infrastructure, and manufacturing processes and related services. ARGO GRAPHICS Inc. was founded in 1985 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Argo Graphics Inc. generates revenue primarily through the sale of software licenses, IT infrastructure solutions, and consulting services. The company partners with major technology providers to distribute high-performance computing systems and CAD/CAM software, which are crucial tools for engineering and design processes in various industries. Additionally, Argo Graphics Inc. offers value-added services such as technical support, training, and system integration, which further contribute to its revenue streams. Strategic alliances and partnerships with leading technology firms enable the company to offer a diverse range of products and maintain a competitive edge in the market.

Argo Graphics Inc. Financial Statement Overview

Summary

Strong and improving profitability (net margin ~8.7% in 2020 to ~10.7% in 2025; EBIT margin ~15.7% in 2025) and solid revenue growth over time (¥48.2B to ¥69.5B). Balance sheet is exceptionally conservative with zero debt and rising equity, supporting resilience; the main concern is cash-flow consistency, with weaker operating cash flow conversion in 2025.

Income Statement

Profitability is strong and improving: net margin rose from ~8.7% (2020) to ~10.7% (2025), with EBIT margin expanding to ~15.7% in 2025. Revenue has grown solidly over time (¥48.2B in 2020 to ¥69.5B in 2025), though the path was uneven (a decline in 2021) and growth in 2025 (3.3%) slowed versus 2024. Gross margin has been broadly stable in the mid‑20% range, but it slipped versus 2024, suggesting some recent mix/price-cost pressure.

Balance Sheet

Balance sheet quality is excellent with zero reported debt across all periods and steadily rising equity (¥30.6B in 2020 to ¥57.2B in 2025), supporting financial flexibility. Returns on equity are consistently strong and stable (~12%–14%), indicating good profitability without relying on leverage. The main limitation is that with no leverage, upside from balance-sheet optimization is limited, and performance depends primarily on operating execution.

Cash Flow

Free cash flow generation is generally strong relative to earnings (free cash flow running at ~89%–99% of net income across periods), which supports earnings quality. However, cash conversion is volatile: operating cash flow coverage fell to ~0.32 in 2025 from ~0.57 in 2024 (and was also low in 2023), indicating working-capital swings or timing effects. Free cash flow growth has also been choppy (sharp drop in 2023, strong rebound in 2024), adding some variability despite overall positive cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	68.29B	69.54B	59.51B	53.35B	46.19B	43.42B
Gross Profit	17.63B	17.87B	16.02B	14.17B	12.68B	11.84B
EBITDA	10.62B	11.19B	9.41B	7.98B	6.79B	5.98B
Net Income	7.10B	7.45B	6.52B	5.42B	4.52B	3.96B
Balance Sheet
Total Assets	84.83B	86.49B	75.05B	65.50B	58.83B	52.59B
Cash, Cash Equivalents and Short-Term Investments	19.47B	37.90B	34.87B	28.13B	26.21B	22.65B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	23.49B	26.82B	22.61B	21.56B	18.97B	16.06B
Stockholders Equity	58.90B	57.19B	50.12B	41.82B	37.81B	34.69B
Cash Flow
Free Cash Flow	0.00	5.76B	9.57B	3.02B	5.91B	2.55B
Operating Cash Flow	0.00	6.46B	9.68B	3.37B	5.96B	2.59B
Investing Cash Flow	0.00	-176.87M	-935.21M	-1.95B	-538.67M	-258.63M
Financing Cash Flow	0.00	-2.26B	-1.87B	-1.85B	-1.37B	-1.44B

Argo Graphics Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1626.00
• 50DMA: Negative
• 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:7595, the sentiment is Positive. The current price of 1626 is above the 20-day moving average (MA) of 1557.90, above the 50-day MA of 1592.18, and above the 200-day MA of 1348.00, indicating a neutral trend. The MACD of -28.48 indicates Positive momentum. The RSI at 44.67 is Neutral, neither overbought nor oversold. The STOCH value of 34.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7595.

Argo Graphics Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7595	80 Outperform	¥104.26B	5.95	―	2.13%	7.64%	13.90%
9889	77 Outperform	¥104.94B	18.64	―	2.32%	5.09%	26.12%
2317	76 Outperform	¥179.38B	17.25	―	2.30%	13.82%	37.07%
3636	75 Outperform	¥77.02B	12.00	―	3.28%	5.28%	28.90%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Argo Graphics Inc. Corporate Events

Argo Graphics Posts Lower Sales but Surging Profit and Raises Dividend for FY2025/26

Argo Graphics reported consolidated results for the nine months ended December 31, 2025, showing a 2.2% year-on-year decline in net sales to ¥48.9 billion and lower operating and ordinary profit, but a sharp increase in profit attributable to owners of parent to ¥16.2 billion, boosted by factors that more than offset the weaker top line and margins. Equity and the equity-to-asset ratio fell from the prior fiscal year-end, reflecting balance sheet changes including increased treasury shares, while earnings per share surged following a one-for-four stock split effective October 1, 2025. The company maintained its full-year forecast for fiscal 2025/26, projecting 6.0% sales growth to ¥73.7 billion and a 152.9% jump in full-year profit attributable to owners of parent to ¥18.8 billion, and revised its dividend plan with a higher third-quarter dividend and a forecast year-end dividend of ¥60 per share (post-split), underscoring continued shareholder returns despite near-term revenue softness.

The most recent analyst rating on (JP:7595) stock is a Buy with a Yen1923.00 price target. To see the full list of analyst forecasts on Argo Graphics Inc. stock, see the JP:7595 Stock Forecast page.

Argo Graphics Lifts FY2026 Dividend Forecast with Special Payout After SCSK Share Sale

Argo Graphics Inc. has revised its dividend forecast for the fiscal year ending March 2026, deciding to pay a total year-end dividend of ¥60 per share, comprising an ordinary dividend of ¥20 and a special dividend of ¥40. The move is driven by an expected extraordinary gain of approximately ¥16,032 million from the sale of all its common shares in SCSK Corporation via a tender offer by SC Investments Management Inc., and aligns with the company’s medium-term plan to balance growth investment with enhanced shareholder returns, including a target dividend payout ratio of 40% or more by FY27 and a sales goal of ¥10 billion by 2030.

The most recent analyst rating on (JP:7595) stock is a Buy with a Yen1923.00 price target. To see the full list of analyst forecasts on Argo Graphics Inc. stock, see the JP:7595 Stock Forecast page.

Argo Graphics Inc. Revises Earnings Forecast Following Tender Offer Acceptance

Argo Graphics Inc. announced its decision to accept a tender offer from SC Investments Management Inc. for all its shares in SCSK Corporation, resulting in an extraordinary income gain. This move has led to a significant revision in the company’s earnings forecast for the fiscal year ending March 2026, with a notable increase in profit attributable to owners of the parent, reflecting a 150.1% rise compared to previous projections.