Business Brain Showaota Inc. (9658) AI Stock Analysis

• Market Cap: ¥34.03B
• Dividend Yield: 2.97%
• Average Volume (3M): 20.55K
• Price to Earnings (P/E): 11.7
• Beta (1Y): 0.55
• Revenue Growth: 16.59%
• EPS Growth: 40.56%
• Country: JP
• Employees: 2,258
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 76.35
• Shares Outstanding: 11,615,200
• 10 Day Avg. Volume: 22,380
• 30 Day Avg. Volume: 20,546
• PEG Ratio: -0.14
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.75
• P/FCF Ratio: 10.83
• 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: 82 Outperform
• Price Target: ¥3,391.00 ▼(-4.75% Downside)
• Action: Reiterated Date: 11/05/25
• Date: Action: Reiterated 11/05/25

Business Brain Showaota Inc. scores well due to its strong financial performance and bullish technical indicators. The attractive valuation further supports the stock's potential, making it a compelling option in the Information Technology Services industry.

Positive Factors

Consistent Revenue Growth

Sustained revenue growth (13.4% most recent period; consistent from 2020–2025) indicates durable demand for the company’s IT services and recurring maintenance contracts. This trend supports predictable cash flows, scale benefits and long‑term client relationships over the next several months.

Robust Balance Sheet

A high equity ratio (~64.3%) and low leverage provide financial flexibility to fund projects, absorb cyclical weakness, and pursue opportunistic investments or M&A without stressing liquidity. This structural strength supports stability and strategic options over the medium term.

Healthy Cash Generation

Consistent operating cash flow and effective conversion of earnings into cash underpin the company’s ability to finance operations, maintain service delivery, and pay dividends or fund investments. Reliable cash generation is a durable foundation for operational resilience.

Negative Factors

EBITDA Margin Pressure

A falling EBITDA margin signals rising costs or pricing compression in a services business where labor is a key input. If sustained, margin pressure will reduce cash available for reinvestment and returns, making profitability improvements harder to achieve over the coming months.

Free Cash Flow Plateau

A plateau in free cash flow growth limits the company’s capacity to materially expand capital expenditure, accelerate product development, or increase shareholder distributions. Over the medium term this constrains strategic flexibility and the pace of balance sheet improvement.

Modest EPS Growth

EPS growth near 3.8% indicates earnings are rising slowly relative to revenue, implying margin erosion or rising costs offsetting top‑line gains. Modest earnings growth can pressure returns on equity and limit the company’s ability to boost shareholder value in the medium term.

Business Brain Showaota Inc. Business Overview & Revenue Model

Company Description

Business Brain Showa-Ota Inc. provides system development and IT solutions in Japan. The company offers consulting, work restructuring, system development, system integration and sustainment services. It also provides managed services based on specialized human resources, such as certified accountants, certified tax accountants, social insurance consultants, and SEs; and BPO solutions in the field of accounting, finance, HR, payroll, labor, and IT. Business Brain Showa-Ota Inc. was founded in 1967 and is headquartered in Tokyo, Japan.

How the Company Makes Money

The company primarily makes money by delivering IT services to corporate clients under project-based and recurring service arrangements. Key revenue streams typically include: (1) systems integration and custom development fees earned from designing, building, and implementing client systems (recognized based on project progress/completion depending on contract terms); (2) ongoing operation, maintenance, and support fees for running and maintaining systems after deployment (recurring revenue tied to service-level agreements and support contracts); and (3) consulting/implementation support fees for upstream planning, requirements definition, and process/IT optimization work. Additional earnings may come from reselling or procuring third-party hardware/software as part of implementations and charging margins or handling fees, but specific details on product resale, contract structure, customer mix, or major partners are not available here and are therefore null.

Business Brain Showaota Inc. Financial Statement Overview

Summary

Business Brain Showaota Inc. shows strong financial health with consistent revenue growth and solid profitability. The balance sheet is robust with low debt and high equity ratio, though there is room for improvement in cost management and cash flow optimization.

Income Statement

Business Brain Showaota Inc. has demonstrated strong financial performance, with consistent revenue growth from 2020 to 2025. The revenue growth rate for the most recent period was approximately 13.4%, indicating a healthy upward trajectory. Gross profit margins are solid, maintaining above 20% in recent years. The net profit margin has also improved, reflecting enhanced operational efficiency. However, the decrease in EBITDA margin from 2024 to 2025 suggests potential cost management challenges.

Balance Sheet

The balance sheet is robust, with a low debt-to-equity ratio indicating prudent leverage management. The company has consistently increased its stockholders' equity, contributing to a favorable equity ratio of approximately 64.3% in 2025. Return on equity has shown positive trends, though it slightly decreased in the latest period, suggesting room for improved profitability. Overall, the company's financial stability is strong, with ample cash reserves and manageable liabilities.

Cash Flow

Operating cash flow remains healthy, supporting strong free cash flow generation. However, the free cash flow growth rate has been relatively stable without significant increases, suggesting a potential plateau in cash generation efficiency. The operating cash flow to net income ratio indicates effective conversion of earnings into cash, though there is room for improvement in enhancing free cash flow to net income ratio.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	40.12B	38.80B	34.22B	37.06B	32.35B	29.16B
Gross Profit	8.96B	8.59B	7.87B	9.03B	8.03B	6.37B
EBITDA	4.82B	4.31B	21.28B	4.29B	3.74B	3.03B
Net Income	2.82B	2.47B	14.15B	1.84B	1.78B	1.55B
Balance Sheet
Total Assets	44.58B	45.32B	44.80B	30.39B	28.30B	22.79B
Cash, Cash Equivalents and Short-Term Investments	9.84B	9.91B	9.91B	11.33B	9.04B	8.26B
Total Debt	2.62B	2.73B	2.84B	3.38B	4.13B	2.08B
Total Liabilities	15.33B	15.71B	15.41B	14.20B	14.25B	11.74B
Stockholders Equity	28.78B	29.14B	28.96B	14.96B	13.22B	10.63B
Cash Flow
Free Cash Flow	0.00	2.70B	2.74B	3.09B	-121.11M	2.90B
Operating Cash Flow	0.00	2.75B	3.15B	3.31B	682.47M	3.08B
Investing Cash Flow	0.00	552.24M	-2.07B	-1.32B	-844.81M	-528.91M
Financing Cash Flow	0.00	-3.30B	-1.40B	-414.84M	535.09M	-719.79M

Business Brain Showaota Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3560.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9658, the sentiment is Negative. The current price of 3560 is above the 20-day moving average (MA) of 3011.35, above the 50-day MA of 3223.64, and above the 200-day MA of 3047.28, indicating a bearish trend. The MACD of -72.77 indicates Negative momentum. The RSI at 34.18 is Neutral, neither overbought nor oversold. The STOCH value of 19.41 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:9658.

Business Brain Showaota Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9658	82 Outperform	¥34.03B	11.66	―	2.97%	16.59%	40.56%
4396	76 Outperform	¥22.82B	11.39	―	1.70%	22.25%	31.88%
3923	74 Outperform	¥265.49B	28.54	―	0.22%	25.00%	62.07%
9746	73 Outperform	¥180.86B	9.34	―	2.55%	10.98%	8.65%
3844	73 Outperform	¥46.70B	18.47	17.50%	2.88%	5.62%	3.81%
4725	65 Neutral	¥30.97B	10.75	10.34%	4.82%	-3.03%	38.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Business Brain Showaota Inc. Corporate Events

Business Brain Showa-ota Announces 3-for-1 Stock Split and Boost in Authorized Shares

Business Brain Showa-ota Inc. has approved a three-for-one stock split of its common shares, effective April 1, 2026, with March 31, 2026 set as the record date. The move will reduce the per-share investment unit and is intended to improve share liquidity and attract a broader investor base.

Following the split, the total number of issued shares will rise from 11,615,200 to 34,845,600, while the total number of authorized shares will increase to 106,800,000 through an associated amendment to the Articles of Incorporation. The company confirmed that share capital will remain unchanged and that shareholder benefits for the fiscal year ending March 31, 2026 will be calculated based on pre-split holdings, clarifying the impact and timing for existing investors.

The most recent analyst rating on (JP:9658) stock is a Buy with a Yen3469.00 price target. To see the full list of analyst forecasts on Business Brain Showaota Inc. stock, see the JP:9658 Stock Forecast page.

Business Brain Showa･Ota Lifts Profits, Confirms Outlook and Doubles Dividend Payout

Business Brain Showa･Ota Inc. reported consolidated sales of ¥31.1 billion for the nine months to December 31, 2025, up 10% year on year, with business profit rising 11.6% to ¥2.45 billion and profit attributable to owners of the parent increasing 5% to ¥2.06 billion. The company maintained a solid equity ratio of 63.3% and has been actively managing its capital structure, as seen in a reduced share count and higher earnings per share.

For the full year to March 31, 2026, the company is forecasting sales of ¥42.6 billion and a 14.9% rise in both business and operating profit, with basic earnings per share projected at ¥222.35. It also plans to double its annual dividend to ¥133 per share, signaling confidence in earnings stability and offering a more attractive return to shareholders while leaving both earnings and dividend forecasts unchanged.

The most recent analyst rating on (JP:9658) stock is a Buy with a Yen3394.00 price target. To see the full list of analyst forecasts on Business Brain Showaota Inc. stock, see the JP:9658 Stock Forecast page.