KSK Co., Ltd (9687) AI Stock Analysis

• Market Cap: ¥25.60B
• Dividend Yield: 2.35%
• Average Volume (3M): 3.82K
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.86
• Revenue Growth: 9.91%
• EPS Growth: 61.65%
• Country: JP
• Employees: 2,461
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 52.38
• Shares Outstanding: 7,636,368
• 10 Day Avg. Volume: 3,710
• 30 Day Avg. Volume: 3,820
• PEG Ratio: 1.19
• Price to Book (P/B): 1.13
• Price to Sales (P/S): 0.80
• P/FCF Ratio: 11.07
• 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: 71 Outperform
• Price Target: ¥4,840.00 ▼(-3.39% Downside)
• Action: Reiterated Date: 01/31/26
• Date: Action: Reiterated 01/31/26

The score is driven primarily by strong financial quality (notably the debt-free balance sheet and steady profitability) and reasonable valuation with a solid dividend. These positives are tempered by weak technical momentum, with the stock trading below key moving averages and bearish MACD despite oversold readings.

Positive Factors

Debt-free balance sheet

A zero-debt capital structure materially lowers refinancing and interest-rate risk, giving management durable financial flexibility. This strengthens the company's ability to fund capex, dividends, or acquisitions through internal resources and preserves resilience across economic cycles.

Consistent revenue growth

Sustained top-line expansion indicates ongoing product-market fit and stable customer demand. Predictable revenue growth supports capacity planning and long-term investment, reducing execution risk and underpinning steady cash flow generation over the medium term.

Free cash flow tracks earnings

FCF closely tracking net income signals earnings are backed by real cash generation, enabling durable shareholder returns and reinvestment. This strengthens capital allocation options and reduces reliance on external financing for growth or distributions.

Negative Factors

Limited margin expansion

Flat gross and net margins constrain operating leverage benefits from revenue growth, capping potential profit and ROE improvement. Without structural cost or mix changes, earnings growth may lag revenue gains and limit sustainable improvement in profitability metrics.

Choppy operating cash conversion

Variability and moderate conversion of net income into operating cash suggest working-capital swings and timing risk. That reduces predictability of liquidity, complicates consistent reinvestment or distributions, and raises sensitivity to operational or seasonal disruptions.

ROE steady but not improving

Stable but non-improving ROE implies limited gains in capital efficiency and raises questions about management's ability to generate higher incremental returns. Over time this can cap shareholder value creation absent strategic changes to margins or asset productivity.

KSK Co., Ltd Business Overview & Revenue Model

Company Description

KSK Co., Ltd (9687) is a Japanese company primarily engaged in providing information technology services. The company operates in sectors such as software development, system integration, and IT consulting. KSK Co., Ltd offers a range of services including software solutions, system operation, and maintenance support, catering to various industries including finance, manufacturing, and telecommunications.

How the Company Makes Money

KSK Co., Ltd generates revenue through its comprehensive IT services. The company's primary revenue streams include fees for software development, where it creates custom software solutions tailored to client needs, and system integration services, where it helps clients implement and optimize IT systems. Additionally, KSK Co., Ltd earns money from its IT consulting services, providing expert advice and strategies for improving client IT infrastructures. Maintenance and support contracts also contribute to the company's earnings, as clients require ongoing support and updates for their IT systems. Partnerships with technology providers and vendors may also play a role in enhancing service offerings and expanding market reach, thereby supporting revenue growth.

KSK Co., Ltd Financial Statement Overview

Summary

Strong overall fundamentals supported by steady revenue growth, stable profitability, and an exceptionally conservative, debt-free balance sheet. The main offsets are limited margin expansion and somewhat uneven operating cash flow conversion despite solid free cash flow relative to earnings.

Income Statement

Revenue has grown steadily over the last six annual periods, accelerating in the latest year (2025: ~2.6% vs. ~0.1% in 2024). Profitability is consistently solid with stable operating profitability (~9–11% operating margin) and steady net profitability (~7.9–8.7% net margin). The main weakness is that margins are not expanding—gross margin has been broadly range-bound (~21–25%) and net margin is slightly below earlier highs, suggesting limited operating leverage despite growth.

Balance Sheet

The balance sheet is exceptionally conservative with zero debt across all reported years, eliminating refinancing and interest-rate risk. Equity has grown consistently (from ~¥11.4B in 2020 to ~¥16.7B in 2025), supporting a stronger capital base. Returns on equity are healthy and stable (~9.5–12.2%), though not meaningfully improving recently, implying profitability is solid but not accelerating.

Cash Flow

Free cash flow tracks net income well (free cash flow running at ~0.88–0.97x net income across the period), which supports earnings quality. However, cash generation is somewhat choppy: operating cash flow coverage of net income is only moderate (~0.32–0.69x) and dipped in 2025 versus 2024, indicating working-capital timing or collection swings. Free cash flow has also been volatile year to year (notably a sharp drop in 2022 and rebound afterward), which reduces consistency.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	24.16B	23.61B	21.78B	20.36B	18.62B	17.55B
Gross Profit	6.28B	5.69B	5.33B	4.67B	4.32B	3.70B
EBITDA	3.32B	2.63B	2.43B	2.31B	2.15B	2.00B
Net Income	2.35B	1.86B	1.70B	1.59B	1.50B	1.53B
Balance Sheet
Total Assets	21.98B	22.94B	21.89B	20.17B	18.50B	17.62B
Cash, Cash Equivalents and Short-Term Investments	9.04B	8.82B	7.50B	6.81B	7.64B	7.56B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	5.31B	6.22B	5.77B	5.38B	4.87B	5.08B
Stockholders Equity	16.67B	16.72B	16.12B	14.79B	13.62B	12.54B
Cash Flow
Free Cash Flow	0.00	1.70B	1.71B	1.30B	910.00M	2.23B
Operating Cash Flow	0.00	1.82B	1.94B	1.43B	991.00M	2.30B
Investing Cash Flow	0.00	-931.00M	-470.00M	-1.61B	-1.64B	-574.00M
Financing Cash Flow	0.00	-1.27B	-474.00M	-458.00M	-463.00M	-427.00M

KSK Co., Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5010.00
• 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:9687, the sentiment is Negative. The current price of 5010 is above the 20-day moving average (MA) of 4383.00, above the 50-day MA of 4812.80, and above the 200-day MA of 4489.68, indicating a bearish trend. The MACD of -147.54 indicates Negative momentum. The RSI at 35.04 is Neutral, neither overbought nor oversold. The STOCH value of 39.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:9687.

KSK Co., Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4333	81 Outperform	¥21.55B	15.93	―	3.86%	0.50%	17.15%
3835	75 Outperform	¥19.16B	16.27	―	3.14%	0.50%	-2.92%
3921	74 Outperform	¥23.88B	13.39	―	2.53%	16.13%	62.27%
9687	71 Outperform	¥25.60B	11.09	―	2.35%	9.91%	61.65%
2307	70 Outperform	¥15.11B	9.76	―	3.14%	3.58%	0.23%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3905	57 Neutral	¥53.81B	-34.62	―	―	27.58%	-1.50%