Computer Engineering & Consulting Ltd. (9692) AI Stock Analysis

• Market Cap: ¥63.98B
• Dividend Yield: 2.41%
• Average Volume (3M): 66.73K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 0.68
• Revenue Growth: 13.05%
• EPS Growth: 4.42%
• Country: JP
• Employees: 2,270
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 38.70
• Shares Outstanding: 35,168,200
• 10 Day Avg. Volume: 45,020
• 30 Day Avg. Volume: 66,726
• PEG Ratio: 0.38
• Price to Book (P/B): 1.62
• Price to Sales (P/S): 1.05
• P/FCF Ratio: 13.80
• 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): 171.4
• Revenue Forecast (FY): ¥69.60B

• Rating: 74 Outperform
• Price Target: ¥2,325.00 ▼(-4.79% Downside)
• Action: Reiterated Date: 03/13/26
• Date: Action: Reiterated 03/13/26

The score is driven primarily by strong financial quality (notably the very low leverage and solid growth/profitability) and supportive valuation (moderate P/E with a high dividend yield). These strengths are tempered by mixed technicals, with the stock still below key longer-term moving averages and a negative MACD.

Positive Factors

Conservative balance sheet

The company’s very low debt-to-equity (~0.9% in 2026) and growing equity base provide durable financial flexibility and downside protection. This conservative financing reduces solvency risk, supports capital allocation optionality, and helps withstand sector cycles over multiple quarters.

Improving revenue growth and profitability

Revenue accelerating to ~10.8% in 2026 alongside sustained EBIT and net margins indicates improving top-line momentum with maintained operating profitability. This combination supports recurring consulting project demand and suggests the business model can convert growth into operating earnings over the medium term.

Free cash flow closely tracks earnings

Free cash flow consistently tracking a high share of net income (around mid-80s percent) shows durable cash generation capability. Reliable FCF conversion supports reinvestment, dividends, and balance sheet strength, underpinning long-term financial resilience despite some year-to-year swings.

Negative Factors

Margin compression vs 2023

Margins have materially contracted from 2023 peaks, with net and EBIT margins falling meaningfully. Persistent compression suggests structural cost pressure or pricing challenges that could limit earnings leverage from future revenue growth unless management restores prior margin dynamics.

Operating cash flow weakness / timing

Operating cash flow at roughly one-third of net income in 2026 points to working-capital timing or collection issues. Inconsistent cash conversion raises risk to cash-driven actions (capex, dividends, M&A) and makes near-term cash planning less predictable across the next several quarters.

Moderating returns on equity

ROE declining from ~13.9% to ~10.0% indicates weakening capital efficiency and profit generation relative to equity. If returns fail to recover, the company may struggle to deliver sustained shareholder value growth, limiting long-term attractiveness despite a strong balance sheet.

Computer Engineering & Consulting Ltd. Business Overview & Revenue Model

Company Description

Computer Engineering & Consulting, Ltd. engages in digital industry and system integration businesses in Japan. It offers ICT services for manufacturing industry. The company also provides system development, construction, maintenance, and operation services; ICT implementation support and operation services; security solutions; package software installation support services; and temporary staffing services. Computer Engineering & Consulting, Ltd. was founded in 1968 and is headquartered in Tokyo, Japan.

How the Company Makes Money

The company generates revenue primarily through its consulting services, which include project-based work and ongoing support contracts. Key revenue streams consist of fees for software development projects, consulting services, and maintenance contracts with both private and public sector clients. Additionally, Computer Engineering & Consulting Ltd. may benefit from partnerships with technology vendors, which can provide a source of referral business and joint marketing opportunities. The company's ability to deliver high-quality solutions and maintain long-term client relationships contributes significantly to its earnings.

Computer Engineering & Consulting Ltd. Financial Statement Overview

Summary

Strong overall fundamentals supported by improving revenue growth (10.8% in 2026) and healthy profitability (EBIT margin ~11.1%, net margin ~7.9%). The balance sheet is a major strength with extremely low leverage (debt-to-equity ~0.9%). Offsets include margin compression versus 2023 and some volatility in earnings and cash conversion (operating cash flow relatively low versus net income in 2026).

Income Statement

Revenue growth is solid and improving, accelerating to 10.8% in 2026 versus low-single-digit growth in 2025. Profitability remains healthy (2026 net margin ~7.9% and EBIT margin ~11.1%), but margins have generally compressed versus the stronger 2023 levels (net margin ~10.7%, EBIT margin ~13.9%), suggesting higher costs and/or pricing pressure. Net income rebounded meaningfully in 2026 from 2025, but overall earnings show some year-to-year volatility.

Balance Sheet

The balance sheet is conservatively financed, with extremely low leverage (debt-to-equity ~0.9% in 2026) and a steadily growing equity base from 2021–2026. This provides strong financial flexibility and downside protection. The main weakness is not leverage-related; rather, returns on equity have moderated from the 2023 peak (ROE ~13.9% in 2023 down to ~10.0% in 2025; 2026 ROE not provided), implying profitability is solid but not consistently improving.

Cash Flow

Cash generation is generally strong, with free cash flow closely tracking earnings (free cash flow at ~86% of net income in 2026 and ~85–92% in 2024–2025). Free cash flow has also recovered sharply from the weaker 2023 level. However, cash conversion is inconsistent year to year, and operating cash flow is relatively low versus earnings in 2026 (operating cash flow at ~33% of net income) compared with stronger coverage in 2024–2025, pointing to working-capital swings and/or timing effects.

Breakdown	TTM	Jan 2025	Jan 2024	Jan 2023	Jan 2022	Jan 2021
Income Statement
Total Revenue	59.48B	65.88B	56.21B	53.12B	48.21B	45.22B
Gross Profit	16.04B	16.86B	15.35B	14.10B	11.31B	10.84B
EBITDA	7.66B	8.15B	7.52B	7.03B	5.14B	4.89B
Net Income	4.21B	5.20B	4.04B	4.54B	5.18B	3.04B
Balance Sheet
Total Assets	53.35B	62.21B	52.64B	51.39B	46.33B	45.15B
Cash, Cash Equivalents and Short-Term Investments	25.97B	25.20B	25.47B	26.71B	23.30B	22.43B
Total Debt	376.00M	389.00M	350.00M	363.80M	377.40M	391.00M
Total Liabilities	13.48B	19.60B	12.23B	10.60B	8.95B	9.41B
Stockholders Equity	39.87B	42.60B	40.40B	40.79B	37.38B	35.74B
Cash Flow
Free Cash Flow	0.00	5.01B	4.50B	5.25B	1.65B	2.02B
Operating Cash Flow	0.00	5.83B	5.27B	5.68B	2.49B	3.15B
Investing Cash Flow	0.00	-2.18B	-1.67B	-747.91M	1.93B	-340.73M
Financing Cash Flow	0.00	-3.91B	-4.85B	-1.53B	-3.56B	-1.41B

Computer Engineering & Consulting Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2442.00
• 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:9692, the sentiment is Negative. The current price of 2442 is above the 20-day moving average (MA) of 1984.30, above the 50-day MA of 2118.03, and above the 200-day MA of 2206.96, indicating a neutral trend. The MACD of -17.87 indicates Negative momentum. The RSI at 46.93 is Neutral, neither overbought nor oversold. The STOCH value of 42.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:9692.

Computer Engineering & Consulting Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4828	77 Outperform	¥73.78B	21.08	31.71%	1.68%	16.12%	46.57%
9692	74 Outperform	¥63.98B	10.69	―	2.41%	13.05%	4.42%
9928	74 Outperform	¥47.78B	9.37	―	2.81%	4.47%	11.37%
4323	72 Outperform	¥50.72B	23.84	―	1.50%	13.48%	35.63%
4776	70 Outperform	¥95.52B	18.51	―	1.02%	26.47%	142.77%
4432	66 Neutral	¥89.17B	20.24	―	2.59%	5.22%	-6.62%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Computer Engineering & Consulting Ltd. Corporate Events

CEC adopts long-term stock option plan to align directors with shareholders

Computer Engineering & Consulting Ltd. has approved the issuance of 96 stock acquisition rights as share-based compensation for its directors who are not members of the Audit and Supervisory Committee and are not outside directors. The program, covering up to 9,600 common shares and exercisable from March 23, 2026, to March 22, 2056, is designed to link management rewards to share price performance and reinforce directors’ responsibility for improving corporate value. The exercise price is set at one yen per share, with the allocation value calculated under the Black-Scholes model and offset via monetary compensation, underscoring a long-term incentive scheme aligned with shareholder returns.

The most recent analyst rating on (JP:9692) stock is a Hold with a Yen2105.00 price target. To see the full list of analyst forecasts on Computer Engineering & Consulting Ltd. stock, see the JP:9692 Stock Forecast page.

Computer Engineering & Consulting Retires 2.47% of Outstanding Shares

Computer Engineering & Consulting Ltd. has retired 891,400 shares of its common stock, equivalent to 2.47% of its previously issued and outstanding shares, pursuant to a board resolution made in March 2025 and executed on January 16, 2026 under Article 178 of the Companies Act. Following the retirement, the company has 35,168,200 shares issued and outstanding and 3,957,736 treasury shares, a capital measure that marginally increases the relative ownership stake of existing shareholders and may be interpreted as a sign of management’s confidence in the firm’s equity value and capital structure discipline.

The most recent analyst rating on (JP:9692) stock is a Hold with a Yen2453.00 price target. To see the full list of analyst forecasts on Computer Engineering & Consulting Ltd. stock, see the JP:9692 Stock Forecast page.