Capcom Co (9697) AI Stock Analysis

• Market Cap: ¥1.33T
• Dividend Yield: 1.17%
• Average Volume (3M): 1.76M
• Price to Earnings (P/E): 23.0
• Beta (1Y): 0.66
• 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: ¥4,589.32
• Price Target Upside: 43.87% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: ¥3,541.00 ▲(11.00% Upside)

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

Conservative balance sheet

A zero-debt balance sheet materially reduces financial risk and preserves strategic optionality. It enables Capcom to fund game development, marketing, licensing and M&A from internally generated capital, while maintaining flexibility for shareholder returns or cyclical buffering.

High profitability and ROE

Very high gross and operating margins reflect scalable IP economics and low variable costs per unit. Strong ROE indicates efficient capital use and durable earnings power, supporting reinvestment in live services, DLC and franchise growth without eroding core profitability.

Robust IP monetization and catalog strength

Large and growing catalog sales plus multi-million unit hits show sustainable recurring revenue from back-catalog and new-platform rollouts. Cross-media coordination (esports, film, licensing) and multi-platform releases stretch IP lifetime and diversify monetization over time.

Negative Factors

TTM free cash flow decline

A sharp TTM FCF decline weakens near-term cash flexibility and raises execution risk for funding sequels, live services and marketing without tapping reserves. Lower FCF conversion and only ~1.5x operating cash/NI make investment pacing and returns more sensitive to timing of releases.

Hit-driven revenue dependence

Capcom’s core economics hinge on blockbuster releases and their launch timing, creating inherent revenue lumpiness. This concentration makes forecasting and steady investment in development or new channels more difficult and elevates execution and market-timing risk.

Sustainability risk of accelerated growth

Exceptionally rapid TTM revenue growth suggests recent results may be driven by specific hits and catalog rollouts. If growth normalizes, margin maintenance will depend on continued high-margin content or higher ongoing marketing and live-service costs, pressuring predictability.

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	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	169.60B	152.41B	125.93B	110.05B	95.31B
Gross Profit	98.76B	84.66B	111.54B	91.00B	76.66B
EBITDA	70.41B	63.56B	54.63B	47.76B	37.69B
Net Income	48.45B	43.37B	36.74B	32.55B	24.92B
Balance Sheet
Total Assets	312.98B	243.48B	217.37B	187.37B	163.90B
Cash, Cash Equivalents and Short-Term Investments	166.78B	125.19B	102.12B	107.26B	71.24B
Total Debt	11.92B	12.16B	11.75B	6.10B	6.83B
Total Liabilities	86.68B	48.40B	56.23B	40.89B	43.10B
Stockholders Equity	226.30B	195.08B	161.13B	146.47B	120.79B
Cash Flow
Free Cash Flow	61.34B	31.79B	14.37B	42.88B	11.50B
Operating Cash Flow	67.62B	36.92B	21.79B	46.95B	14.63B
Investing Cash Flow	-7.27B	-5.96B	-7.68B	-7.43B	-4.23B
Financing Cash Flow	-18.73B	-15.97B	-22.48B	-9.98B	-6.96B

Capcom Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3190.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9697, the sentiment is Negative. The current price of 3190 is below the 20-day moving average (MA) of 3631.50, below the 50-day MA of 3645.66, and below the 200-day MA of 4037.87, indicating a bearish trend. The MACD of -33.07 indicates Positive momentum. The RSI at 36.12 is Neutral, neither overbought nor oversold. The STOCH value of 16.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥518.52B	14.69	―	2.49%	-1.05%	6.49%
9697	72 Outperform	¥1.33T	23.03	26.66%	1.17%	45.17%	81.91%
9766	72 Outperform	¥2.63T	33.33	17.57%	0.84%	18.39%	23.33%
6460	68 Neutral	¥496.83B	29.40	4.45%	2.12%	-8.73%	-55.81%
7974	62 Neutral	¥10.45T	29.30	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	¥920.47B	41.26	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.