Capcom Co (9697) AI Stock Analysis

• Market Cap: ¥1.50T
• Dividend Yield: 1.17%
• Average Volume (3M): 1.76M
• Price to Earnings (P/E): 23.4
• Beta (1Y): 0.55
• Revenue Growth: 45.17%
• EPS Growth: 81.91%
• Country: JP
• Employees: 3,531
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 27.18
• Shares Outstanding: 533,011,200
• 10 Day Avg. Volume: 1,489,130
• 30 Day Avg. Volume: 1,759,873
• PEG Ratio: 2.70
• Price to Book (P/B): 6.77
• Price to Sales (P/S): 9.04
• P/FCF Ratio: 24.98
• 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: ¥4,577.09
• Price Target Upside: 27.39% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 129.4
• Revenue Forecast (FY): ¥185.54B

• Rating: 72 Outperform
• Price Target: ¥3,988.00 ▲(10.99% Upside)
• Action: Reiterated Date: 02/05/26
• Date: Action: Reiterated 02/05/26

Strong fundamentals (high margins, rapid TTM growth, and a debt-free balance sheet) are the primary support for the score. This is tempered by a clear bearish technical setup (below major moving averages with negative MACD) and a key fundamental watch-out in the recent TTM free-cash-flow decline.

Positive Factors

High profitability and margins

Capcom's very high gross, EBIT and net margins indicate structurally strong monetization of owned IP and efficient development/publishing economics. High margins support reinvestment in franchises and provide buffer versus cyclical sales swings, underpinning durable profitability.

Robust recent revenue growth

Exceptional TTM revenue growth reflects strong demand for flagship franchises and effective monetization of catalog and live content. If sustained by sequels, DLC and back-catalog sales this supports multi-period earnings expansion and scalability of digital distribution economics.

Conservative, debt-free balance sheet

A zero-debt capital structure materially reduces financial risk and gives strategic optionality for development spending, IP licensing, or M&A without refinancing pressure. Strong ROE shows efficient capital use, supporting durable shareholder returns and investment capacity.

Negative Factors

Free cash flow decline and conversion volatility

A notable TTM drop in free cash flow and only moderate cash conversion versus net income indicate earnings quality risk. Persistent FCF volatility can constrain content investment cadence, dividends or buybacks, and raises sensitivity to timing of receipts and development spend.

Hit-driven growth risk

Sharp acceleration in reported growth suggests dependence on a limited number of successful releases. The gaming model creates lumpy revenue patterns; absent steady recurring streams, future results may revert, making multi-quarter forecasting and margin sustainability uncertain.

Revenue and timing sensitivity to game launches

Capcom's core monetization depends on new-release timing, platform distribution terms, and DLC longevity. That concentration creates structural exposure to development delays, platform revenue share changes, or weaker-than-expected launches that can materially and persistently affect cash flow and growth.

Capcom Co Business Overview & Revenue Model

Company Description

Capcom Co., Ltd. plans, develops, manufactures, sells, and distributes home video games, online games, mobile games, and arcade games in Japan and internationally. It operates through Digital Contents, Arcade Operations, Amusement Equipments, and Other Businesses segments. The Digital Contents segment develops and sells packaged and digital game content for consumer home video game platforms, as well as mobile content and PC online games. The Arcade Operations segment operates Plaza Capcom amusement facilities primarily in commercial complexes, as well as hosts various events. The Amusement Equipments segment is involved in the development, manufacture, and sale of frames and LCD devices for gaming machines, as well as software. The Other Businesses segment publishes walkthrough and strategy guides, as well as game art books; licenses movies, animated television programs, music CDs, and merchandise; and focuses on the esports business. It also manages amusement arcades. Capcom Co., Ltd. was incorporated in 1979 and is headquartered in Osaka, Japan.

How the Company Makes Money

Capcom generates revenue through multiple streams, primarily from the sale of video games. This includes physical and digital game sales, downloadable content (DLC), and in-game purchases. The company also benefits from recurring revenue through its online services and subscriptions associated with specific titles. Additionally, Capcom earns revenue from licensing its intellectual properties for merchandise, films, and collaborations with other media. Significant partnerships with platform holders such as Sony, Microsoft, and Nintendo further enhance its distribution capabilities and visibility in the market. Seasonal sales promotions and events, like the Tokyo Game Show, also contribute to increased sales and brand awareness.

Capcom Co Financial Statement Overview

Summary

Very strong profitability and growth (TTM gross margin ~61%, EBIT margin ~42%, net margin ~31%, revenue growth ~+88%) plus a conservative balance sheet with zero debt and strong ROE (~27%). The main weakness is cash flow volatility: TTM free cash flow declined ~34% and FCF is ~76% of net income, which reduces the score despite strong earnings.

Income Statement

TTM (Trailing-Twelve-Months) results show very strong profitability, with gross margin ~61%, EBIT margin ~42%, and net margin ~31%—all indicating high-quality earnings. Revenue growth is exceptionally strong in TTM (about +88%), building on solid growth in prior annual periods, pointing to strong demand/monetization. The main watch-out is sustainability: growth has accelerated sharply versus the last annual report, which can be hit-driven in gaming and may normalize.

Balance Sheet

The balance sheet is conservatively positioned, with TTM showing zero debt and a debt-to-equity ratio at 0.0, which materially reduces financial risk. Equity is sizable relative to assets, and return on equity is strong (roughly 27% TTM), indicating efficient capital use. A minor consideration is that total assets were higher in the most recent annual period than in TTM, suggesting some balance sheet fluctuation over time, but leverage remains very low overall.

Cash Flow

Cash generation is positive with TTM operating cash flow and free cash flow both solid, and free cash flow is about 76% of net income—generally supportive of earnings quality. However, TTM free cash flow declined materially (about -34%), and operating cash flow is only ~1.5x net income, which is decent but not exceptionally strong for a company showing very high margins. Prior annual periods show better free-cash-flow conversion and growth, so the TTM dip looks like the key near-term weakness to monitor.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	196.07B	169.60B	152.41B	125.93B	110.05B	95.31B
Gross Profit	123.77B	98.76B	84.66B	111.54B	91.00B	76.66B
EBITDA	91.42B	70.41B	63.56B	54.63B	47.76B	37.69B
Net Income	64.27B	48.45B	43.37B	36.74B	32.55B	24.92B
Balance Sheet
Total Assets	290.87B	312.98B	243.48B	217.37B	187.37B	163.90B
Cash, Cash Equivalents and Short-Term Investments	111.77B	166.78B	125.19B	102.12B	107.26B	71.24B
Total Debt	0.00	11.92B	12.16B	11.75B	6.10B	6.83B
Total Liabilities	40.62B	86.68B	48.40B	56.23B	40.89B	43.10B
Stockholders Equity	250.25B	226.30B	195.08B	161.13B	146.47B	120.79B
Cash Flow
Free Cash Flow	28.92B	61.34B	31.79B	14.37B	42.88B	11.50B
Operating Cash Flow	41.90B	67.62B	36.92B	21.79B	46.95B	14.63B
Investing Cash Flow	-45.10B	-7.27B	-5.96B	-7.68B	-7.43B	-4.23B
Financing Cash Flow	-26.32B	-18.73B	-15.97B	-22.48B	-9.98B	-6.96B

Capcom Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3593.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9697, the sentiment is Positive. The current price of 3593 is above the 20-day moving average (MA) of 3236.65, above the 50-day MA of 3482.40, and below the 200-day MA of 3971.42, indicating a neutral trend. The MACD of -52.54 indicates Negative momentum. The RSI at 60.45 is Neutral, neither overbought nor oversold. The STOCH value of 91.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9697.

Capcom Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3635	76 Outperform	¥603.30B	15.97	―	2.49%	-1.05%	6.49%
9697	72 Outperform	¥1.50T	23.38	26.66%	1.17%	45.17%	81.91%
9766	72 Outperform	¥2.82T	32.86	17.57%	0.84%	18.39%	23.33%
6460	68 Neutral	¥549.82B	-40.41	4.45%	2.12%	-8.73%	-55.81%
7974	62 Neutral	¥10.47T	26.15	13.46%	1.17%	24.47%	12.54%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
9684	57 Neutral	¥938.70B	36.68	6.70%	1.80%	-12.02%	126.06%

Capcom Co Corporate Events

Capcom Posts Strong Nine-Month Profit Surge and Confirms Full-Year Forecast, Dividend Plan

Capcom reported strong results for the nine months ended December 31, 2025, with net sales rising 29.8% year on year to ¥115.3 billion and profit attributable to owners of parent surging 68.6% to ¥38.9 billion, reflecting a significant rebound in profitability from the prior-year period. Operating profit climbed 75.1%, ordinary profit increased 64.6%, and basic earnings per share reached ¥92.96, while the equity ratio improved to 85.9% on a larger net asset base, underscoring a solid financial position. The company maintained its full-year forecast for the fiscal year ending March 31, 2026, targeting ¥190.0 billion in net sales and ¥51.0 billion in profit attributable to owners of parent, and kept its dividend outlook unchanged at a total annual payout of ¥40 per share, signaling confidence in continued earnings growth and shareholder returns without altering its consolidation scope or accounting policies.

The most recent analyst rating on (JP:9697) stock is a Buy with a Yen4281.00 price target. To see the full list of analyst forecasts on Capcom Co stock, see the JP:9697 Stock Forecast page.