Nareru Group Inc. (9163) AI Stock Analysis

• Market Cap: ¥20.81B
• Dividend Yield: 5.04%
• Average Volume (3M): 62.90K
• Price to Earnings (P/E): 10.4
• Beta (1Y): 0.48
• Revenue Growth: 11.80%
• EPS Growth: -6.32%
• Country: JP
• Employees: 3,812
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 56.82
• Shares Outstanding: 8,750,349
• 10 Day Avg. Volume: 55,570
• 30 Day Avg. Volume: 62,896
• PEG Ratio: -1.47
• Price to Book (P/B): 1.36
• Price to Sales (P/S): 0.82
• P/FCF Ratio: 8.81
• 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: 72 Outperform
• Price Target: ¥2,577.00 ▲(16.08% Upside)
• Action: Reiterated Date: 03/14/26
• Date: Action: Reiterated 03/14/26

The score is driven primarily by solid underlying financial performance (strong growth and cash generation with improving leverage) and attractive valuation (low P/E and high dividend yield). These positives are tempered by weaker near-term technical signals and evidence of margin compression and slightly softer recent earnings.

Positive Factors

Multi-year revenue growth

Sustained multi-year revenue expansion indicates durable product-market fit and steady demand for Nareru's software and transformation services. Over 2-6 months this underpins predictable contract renewals, backlog conversion and scale benefits that support investment, resilience and longer-term growth execution.

Consistent free cash flow

Free cash flow consistently tracking net income shows the business reliably converts earnings into cash, enabling sustainable reinvestment, dividends or debt reduction. This durable cash generation supports financial flexibility and cushions cyclical weakness over several quarters to years.

Improving leverage and equity base

A meaningful decline in leverage and a growing equity base strengthen the capital structure, lowering solvency risk and interest burden. Improved balance-sheet metrics and mid-teens ROE provide durable capacity for strategic spending, M&A or shareholder returns without immediate refinancing pressure.

Negative Factors

Margin compression

Compression of gross and operating margins versus recent peaks signals persistent price-cost or mix pressures that can erode earnings power. If structural, weaker margins reduce the company's ability to fund growth, service debt or pay dividends, and make results more sensitive to revenue swings over months to quarters.

Uneven cash conversion

Volatile FCF growth and low proportion of operating cash flow to revenue make cash forecasting and capital allocation less reliable. Even with strong headline FCF, uneven conversion raises the risk that capital plans or debt servicing face disruption during weaker demand or large project cycles.

Material total debt remains

Although leverage has improved, a material level of debt still constrains flexibility and raises sensitivity to interest-rate or cash-flow shocks. Remaining debt limits ability to pursue sizable acquisitions or large discretionary returns without further deleveraging or refinancing over the medium term.

Nareru Group Inc. Business Overview & Revenue Model

Company Description

Nareru Group Inc., together with its subsidiaries, provides engineer outsourcing services for the construction industry in Japan. The company offers engineer dispatching services, construction management services, architectural drawing for the construction and plant industries; and recruitment services, as well as operates a human resource matching platform for the construction industry. It also dispatches engineers for the IT industry and offers system engineering services. The company was founded in 2008 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Nareru Group Inc. generates revenue through multiple streams, primarily focusing on software development services, digital transformation solutions, and consulting services. Their revenue model includes project-based contracts, subscription services, and ongoing support and maintenance agreements. Key revenue streams come from large enterprises seeking to enhance their technological infrastructure and improve operational workflows. Additionally, the company has established strategic partnerships with technology providers, enabling it to offer comprehensive solutions that integrate third-party innovations, thereby attracting more clients and driving growth in its earnings.

Nareru Group Inc. Financial Statement Overview

Summary

Solid multi-year revenue growth and healthy profitability with consistent free-cash-flow generation, supported by improving leverage. Offsetting this are margin compression from the 2023–2024 peak into 2025/TTM, modestly softer recent net income, and some volatility in cash-flow growth.

Income Statement

Revenue has expanded strongly over the last several years (from 2022–2025 annual reports), and TTM (Trailing-Twelve-Months) revenue is still up versus the prior annual period. Profitability remains healthy with solid gross and operating margins, but margins have compressed from the 2023–2024 peak into 2025 and TTM (Trailing-Twelve-Months), and net income is modestly lower than the last two annual periods—suggesting some near-term pressure on earnings quality/price-cost dynamics.

Balance Sheet

Leverage has improved meaningfully over time, with debt-to-equity trending down from higher levels in earlier years to a moderate level in the latest annual period and TTM (Trailing-Twelve-Months). Equity has also grown, supporting a stronger capital base. Returns on equity are solid in the mid-teens, though slightly below the 2024 high, and total debt remains material—so the balance sheet is improved but not debt-light.

Cash Flow

Cash generation is a clear positive: free cash flow is strong and consistently close to net income across periods, and TTM (Trailing-Twelve-Months) free cash flow growth is positive. The key watch-out is that operating cash flow is a relatively small share of revenue, and free cash flow growth has been uneven year-to-year (including a slight decline in the latest annual period), indicating some volatility in cash conversion even though overall cash profitability is good.

Breakdown	TTM	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	24.54B	24.16B	21.61B	17.99B	14.54B	12.13B
Gross Profit	5.89B	5.95B	5.68B	4.92B	3.99B	3.10B
EBITDA	2.99B	3.15B	3.36B	2.70B	2.24B	1.64B
Net Income	1.93B	2.09B	2.19B	1.74B	1.24B	1.04B
Balance Sheet
Total Assets	24.35B	24.58B	23.62B	22.51B	20.16B	19.25B
Cash, Cash Equivalents and Short-Term Investments	4.31B	4.82B	4.52B	4.08B	2.28B	2.16B
Total Debt	5.42B	5.62B	6.15B	6.61B	7.28B	8.26B
Total Liabilities	9.89B	10.10B	10.18B	10.33B	10.22B	10.61B
Stockholders Equity	14.45B	14.48B	13.44B	12.18B	9.93B	8.63B
Cash Flow
Free Cash Flow	2.40B	2.24B	2.30B	2.27B	1.49B	1.07B
Operating Cash Flow	2.52B	2.30B	2.31B	2.31B	1.55B	1.08B
Investing Cash Flow	-304.24M	-197.64M	-6.38M	22.05M	-176.44M	-1.01B
Financing Cash Flow	-1.95B	-1.92B	-1.87B	-536.63M	-1.25B	158.22M

Nareru Group Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2220.00
• 50DMA: Positive
• 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:9163, the sentiment is Positive. The current price of 2220 is below the 20-day moving average (MA) of 2368.35, below the 50-day MA of 2365.02, and below the 200-day MA of 2299.66, indicating a bullish trend. The MACD of -0.98 indicates Positive momentum. The RSI at 52.62 is Neutral, neither overbought nor oversold. The STOCH value of 58.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9163.

Nareru Group Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1867	82 Outperform	¥19.80B	5.93	―	3.03%	4.18%	1.38%
1960	73 Outperform	¥22.85B	8.25	―	2.97%	22.32%	5024.88%
9233	73 Outperform	¥23.08B	-39.49	―	3.59%	3.28%	-5.52%
9163	72 Outperform	¥20.81B	10.44	―	5.04%	11.80%	-6.32%
6540	69 Neutral	¥20.67B	8.13	―	0.56%	13.31%	4.29%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1776	60 Neutral	¥18.22B	14.29	―	2.54%	5.89%	-30.27%

Nareru Group Inc. Corporate Events

Nareru Group’s World Corporation Forms Construction DX Alliance With Arent

Nareru Group’s core unit World Corporation has entered a strategic business alliance with Arent Inc. to deploy Arent’s AI-powered cloud-based process management system, PROCOLLA, on construction sites. The collaboration combines World Corporation’s base of about 3,600 construction personnel with Arent’s DX platform to support practical on-site adoption and use of digital tools.

Under the alliance, World Corporation will handle on-site onboarding, operational guidance, and user adoption, while Arent focuses on development, provision, and training support for PROCOLLA. The initiative is positioned as a key element of Nareru’s “Change and Growth 2030” plan to strengthen its Construction Solutions Business, enhance specialized DX support capabilities, and improve profitability over the medium to long term, although the short-term earnings impact is expected to be limited.

The most recent analyst rating on (JP:9163) stock is a Hold with a Yen2409.00 price target. To see the full list of analyst forecasts on Nareru Group Inc. stock, see the JP:9163 Stock Forecast page.

Nareru Group Sets Q1 FY2026 Briefing Under Long‑Term Growth Vision

Nareru Group Inc. has released materials for its financial results briefing covering the first quarter of the fiscal year ending October 2026, outlining performance metrics, key performance indicators and priority initiatives. The presentation emphasizes the company’s long‑term “Change and Growth 2030” vision, signaling a continued push to refine its business model and accelerate growth, which may influence its competitive positioning and operational focus over the medium to long term.

The most recent analyst rating on (JP:9163) stock is a Hold with a Yen2409.00 price target. To see the full list of analyst forecasts on Nareru Group Inc. stock, see the JP:9163 Stock Forecast page.

Nareru Group Posts Profit Decline but Affirms 2026 Outlook and Dividend Plan

Nareru Group Inc. reported revenue of ¥6.28 billion for the three months ended January 31, 2026, up 6.5% year on year, but saw operating profit fall 19.6% to ¥724 million and profit attributable to owners of parent decline 23.5% to ¥497 million. Despite the earnings contraction, the balance sheet remained solid with total assets of ¥24.35 billion and an equity ratio of 59.4%, and the company kept its full-year dividend forecast unchanged at ¥115 per share.

For the fiscal year ending October 31, 2026, Nareru projects a strong 21.1% increase in full-year revenue to ¥29.25 billion and mid- to high-teens growth in gross profit, while expecting only modest 6.5% growth in operating profit and virtually flat net profit, indicating pressure on margins. Management has not revised its previously announced earnings outlook, signaling confidence in top-line expansion but suggesting stakeholders should brace for weaker profitability trends in the near term even as dividend levels are maintained.

The most recent analyst rating on (JP:9163) stock is a Hold with a Yen2409.00 price target. To see the full list of analyst forecasts on Nareru Group Inc. stock, see the JP:9163 Stock Forecast page.

Nareru Group Posts Higher Engineer Utilization and Mixed Turnover Across Units in January

Nareru Group Inc. reported key performance indicators for January 2026 for its World Corporation construction solutions unit, showing 3,650 total engineers and 3,334 active engineers, with utilization ratios rising to 92.4% excluding trainees and 91.3% including them. Quarterly data indicated a contract unit price of ¥520,295, 429 new hires and 428 job leavers, resulting in a high annualized turnover rate of 32.8%, underscoring both strong recruitment and notable churn.

The ATJC IT solutions business recorded 426 total engineers and 376 active engineers in January, with utilization ratios improving to 91.0% excluding trainees and 88.3% including them. Its quarterly figures showed a higher contract unit price of ¥526,424 but a lower turnover rate of 22.2%, suggesting comparatively better retention, which may support margin stability and operational efficiency within Nareru Group’s IT-focused segment.

The most recent analyst rating on (JP:9163) stock is a Hold with a Yen2409.00 price target. To see the full list of analyst forecasts on Nareru Group Inc. stock, see the JP:9163 Stock Forecast page.

Nareru Group Posts Strong Engineer Utilization in December 2025 KPIs

Nareru Group Inc. reported key performance indicators for December 2025 for its core engineering dispatch units, World Corporation (construction solutions) and ATJC (IT solutions), highlighting the scale and utilization of its technical workforce. World Corporation maintained a large engineer base with 3,675 total engineers and 3,328 active engineers in December, achieving a utilization ratio of 91.5% excluding trainees and 90.6% including trainees, pointing to strong deployment levels in its construction-focused operations. ATJC reported 428 total engineers and 370 active engineers, with utilization ratios improving to 90.5% excluding trainees and 86.4% including trainees, suggesting solid demand for its IT engineers and efficient staffing. The KPIs, though preliminary and subject to revision, provide stakeholders with a monthly view of operational momentum ahead of fuller quarterly disclosures, signaling stable or strengthening utilization across Nareru Group’s main human-capital-intensive businesses.

The most recent analyst rating on (JP:9163) stock is a Hold with a Yen2409.00 price target. To see the full list of analyst forecasts on Nareru Group Inc. stock, see the JP:9163 Stock Forecast page.

Nareru Group Inc. Reports Strong November 2025 KPIs

Nareru Group Inc. has released its key performance indicators for November 2025, highlighting the performance of its construction and IT solution businesses. The construction business reported a high utilization ratio of 90.1% excluding trainees, while the IT solution business showed a utilization ratio of 88.5%. These metrics indicate a strong operational performance, which could positively impact the company’s market positioning and stakeholder confidence.

The most recent analyst rating on (JP:9163) stock is a Hold with a Yen2534.00 price target. To see the full list of analyst forecasts on Nareru Group Inc. stock, see the JP:9163 Stock Forecast page.