IMAGE MAGIC Inc. (7793) AI Stock Analysis

• Market Cap: ¥4.73B
• Dividend Yield: 2.05%
• Average Volume (3M): 6.06K
• Price to Earnings (P/E): 13.6
• Beta (1Y): 0.57
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: JP
• Employees: 222
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): N/A
• Shares Outstanding: 2,572,235
• 10 Day Avg. Volume: 7,010
• 30 Day Avg. Volume: 6,060
• PEG Ratio: 0.34
• Price to Book (P/B): 1.71
• Price to Sales (P/S): 0.37
• P/FCF Ratio: 7.79
• 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: 76 Outperform
• Price Target: ¥2,087.00 ▲(45.13% Upside)
• Action: Upgraded Date: 02/18/26
• Date: Action: Upgraded 02/18/26

The score is driven primarily by improving financial performance, led by a significantly de-risked balance sheet and better growth/margins, supported by positive technical trends. Valuation is reasonable with a modest dividend, while thin profitability and only moderate cash conversion temper the overall upside.

Positive Factors

Deleveraged, conservative balance sheet

The material reduction in leverage and steady equity growth provide durable financial flexibility. Low debt lowers refinancing and interest risk, enabling reinvestment, dividend support or opportunistic M&A without immediate capital markets dependence, improving resilience over months.

Re-accelerating revenue with margin expansion

Renewed top-line growth paired with expanding gross and operating margins signals improving pricing, mix or cost control. Sustained revenue/margin improvement supports predictable earnings, enhances operational leverage and makes medium-term profit growth more achievable if execution continues.

Positive and improving cash generation

Consistent positive OCF and rising FCF across recent years strengthen self-funding capacity. Improved cash generation funds capex, debt reduction, and distributions without external financing, increasing strategic optionality and lowering liquidity risk over the coming months.

Negative Factors

Thin net profitability

Low-single-digit net margins mean the business has limited earnings buffer against cost inflation or demand shocks. Sustained thin profitability constrains retained earnings for reinvestment and raises sensitivity to small revenue declines, making durable margin improvement critical.

Moderate cash conversion quality

Only moderate conversion of accounting profits into cash implies working-capital swings or recurring investment needs. This reduces the reliability of reported earnings to fund operations or growth, raising execution risk and the potential need for external financing under stress.

Historical leverage and execution risk

A history of materially higher leverage highlights past financial strain and raises the bar for sustained discipline. If growth or cash flow deteriorates, there is a credible path back to higher leverage, which would reduce flexibility and increase refinancing risk over the medium term.

IMAGE MAGIC Inc. Business Overview & Revenue Model

Company Description

IMAGE MAGIC Inc. provides on-demand printing services for original products in Japan. It offers ordering systems, which comprise maker town, a cloud-based on-demand EC service; customized EC OEM services, such as design tools and management screens; ordering tools for manufacturing of original goods; and B2B on-demand ordering tools. The company provides cooperation systems, including image submission API, link generation tool, design tool provided API, cloud ordering tool, XML collaboration, and design order tool products, as well as various products and tools for creating goods. In addition, it offers various hardware products, such as on-demand transfer printers, folding packing compression systems, folding and bagging machines, folding machines, packing and shipping machines, garment printers, automatic sorting machines, 9-mouth automatic sorter, 5-mouth automatic sorter, rotary UV and LED printers, pretreatment machines, and DAS systems. Further, the company provides entertainment goods business; sign, display, and decoration products; on-demand apparel solutions; and on-demand print cooperation systems. IMAGE MAGIC Inc. was incorporated in 1995 and is headquartered in Tokyo, Japan.

How the Company Makes Money

IMAGE MAGIC Inc. generates revenue through multiple streams, including the sale of imaging hardware, software licensing, and subscription services for its cloud-based platforms. A significant portion of its income comes from long-term contracts with healthcare institutions and educational organizations, where the company provides both equipment and ongoing technical support. Additionally, IMAGE MAGIC Inc. has established partnerships with technology firms and research institutions, allowing for collaborative projects that expand its market reach and enhance product development. The company also benefits from a growing demand for imaging solutions in sectors such as telemedicine and virtual reality, contributing to its overall profitability.

IMAGE MAGIC Inc. Financial Statement Overview

Summary

Financials are strengthening: revenue growth re-accelerated in 2025 and margins improved modestly, while the balance sheet is conservative with very low leverage. Cash flow is positive and improving, but profitability remains thin and cash conversion is only moderate, indicating some sensitivity to execution and working-capital swings.

Income Statement

Revenue growth has re-accelerated, with 2025 revenue up ~7.4% versus a near-flat 2024 (~0.3%), and profitability improved alongside it (2025 operating margin ~5.9% and net margin ~3.5%, up modestly from 2024). Gross margin also expanded to ~40% in 2025 from ~38% in 2024, indicating better pricing/mix and/or cost control. The key weakness is that net profitability remains relatively thin (low-single-digit net margin) and has shown some historical volatility (notably much weaker profitability in the 2023-04 period).

Balance Sheet

The balance sheet looks conservative and has strengthened meaningfully: debt-to-equity improved to ~0.08 in 2025 from ~0.16 in 2024 and ~0.27 in 2023, reflecting deleveraging and rising equity. Equity has grown steadily (to ~¥2.06B in 2025 from ~¥1.81B in 2024), supporting flexibility for reinvestment. A historical risk flag is that leverage was once much higher (debt-to-equity ~1.22 in 2021), but the more recent trajectory is clearly favorable.

Cash Flow

Cash generation is solid and improving: operating cash flow rose to ~¥820M in 2025 from ~¥591M in 2024, and free cash flow increased to ~¥451M from ~¥269M. Free cash flow is positive in the last three fiscal years shown (2023–2025 year-end), which supports self-funded growth and balance-sheet improvement. The main weakness is conversion quality: operating cash flow relative to profits is only moderate (~0.64 in 2025), and free cash flow relative to profits is also moderate (~0.55 in 2025), suggesting working-capital swings and/or investment needs can dampen cash conversion (with some earlier periods showing negative free cash flow).

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Apr 2023	Apr 2022
Income Statement
Total Revenue	8.76B	9.40B	7.77B	6.13B	5.29B	4.90B
Gross Profit	3.49B	3.79B	2.96B	2.19B	1.69B	1.67B
EBITDA	701.38M	826.51M	636.00M	558.50M	271.24M	501.06M
Net Income	278.78M	329.88M	258.00M	241.33M	48.99M	234.44M
Balance Sheet
Total Assets	3.09B	3.51B	3.02B	2.69B	2.34B	2.36B
Cash, Cash Equivalents and Short-Term Investments	579.23M	1.17B	940.00M	862.00M	679.54M	955.95M
Total Debt	211.62M	162.12M	283.00M	407.00M	304.55M	472.64M
Total Liabilities	1.24B	1.45B	1.21B	1.15B	1.02B	1.09B
Stockholders Equity	1.85B	2.06B	1.81B	1.53B	1.31B	1.26B
Cash Flow
Free Cash Flow	0.00	450.50M	269.00M	180.00M	-125.48M	233.36M
Operating Cash Flow	0.00	820.38M	591.00M	637.50M	131.43M	352.06M
Investing Cash Flow	0.00	-389.03M	-404.00M	-520.50M	-240.19M	-141.84M
Financing Cash Flow	0.00	-204.53M	-109.00M	156.00M	-167.64M	171.39M

IMAGE MAGIC Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1438.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7793, the sentiment is Positive. The current price of 1438 is below the 20-day moving average (MA) of 1719.40, below the 50-day MA of 1575.80, and below the 200-day MA of 1490.79, indicating a bullish trend. The MACD of 72.97 indicates Negative momentum. The RSI at 71.45 is Negative, neither overbought nor oversold. The STOCH value of 94.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7793.

IMAGE MAGIC Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7805	77 Outperform	¥3.57B	7.45	―	1.93%	-1.00%	105.56%
7793	76 Outperform	¥4.73B	13.62	―	2.05%	―	―
7946	71 Outperform	¥2.55B	34.49	―	1.68%	3.07%	-32.45%
3958	70 Outperform	¥3.37B	13.65	―	3.30%	-3.41%	-24.95%
7919	66 Neutral	¥3.64B	10.58	―	3.69%	0.62%	-24.08%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
7916	61 Neutral	¥5.77B	19.83	―	2.72%	-1.30%	―