ISB CORP (Japan) (9702) AI Stock Analysis

• Market Cap: ¥22.97B
• Dividend Yield: 3.01%
• Average Volume (3M): 31.18K
• Price to Earnings (P/E): 16.0
• Beta (1Y): 0.62
• Revenue Growth: 9.84%
• EPS Growth: -19.96%
• Country: JP
• Employees: 2,125
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 42.62
• Shares Outstanding: 11,463,141
• 10 Day Avg. Volume: 22,450
• 30 Day Avg. Volume: 31,176
• PEG Ratio: -0.47
• Price to Book (P/B): 1.37
• Price to Sales (P/S): 0.54
• P/FCF Ratio: 23.35
• 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: 75 Outperform
• Price Target: ¥2,057.00 ▲(18.70% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

Overall score reflects strong balance-sheet safety and supportive technical trend. The main constraint is the 2025 step-down in profitability and weaker cash-flow conversion, while valuation is reasonable with a ~3% dividend yield.

Positive Factors

Conservative balance sheet

Extremely low leverage and steadily expanding equity/assets materially reduce financial risk and provide durable flexibility. This conservatism supports funding of R&D, selective M&A or dividend policy during downturns and makes the business resilient to cyclical shocks over the next 2–6 months.

Consistent revenue growth

Multi-year mid-to-high single-digit top-line growth signals sustained product-market fit and predictable demand in its application software market. That steady revenue base underpins long-term capacity to scale operating leverage and supports reinvestment without reliance on one-off gains.

Stable gross margins

Consistent gross margins indicate control over direct costs and defensible pricing in core offerings. Stable COGS dynamics give management a reliable margin floor, aiding long-term profitability recovery if operating expenses normalize and improving predictability of cash generation.

Negative Factors

2025 profitability step-down

A marked fall in net income and margins while revenue rose points to structural cost pressures or non-recurring charges that erode returns. If these drivers persist, they will weaken ROE and constrained capital allocation, limiting the firm's ability to invest or sustain shareholder distributions.

Weakened cash conversion

Declining OCF and FCF-to-income coverage reduce self-funded investment capacity and increase sensitivity to earnings swings. Lower cash conversion may force reliance on external funding for growth or dividends, undermining the balance-sheet advantage and constraining strategic flexibility.

Earnings and FCF volatility

Repeated volatility in margins and FCF signals inconsistent cost control or working-capital management, making future performance less predictable. Persistent variability raises execution risk for multi-year plans and may complicate investor confidence in sustainable returns.

ISB CORP (Japan) Business Overview & Revenue Model

Company Description

ISB Corporation provides software development services for mobile, medical, and in-vehicle applications in Japan. It offers cloud infrastructure construction, operation design and operation, maintenance, and system operation services, as well as verification of mobile devices and data center services, including housing and hosting. The company also develops and sells business products, such as packaging; sells equipment/entry control system associated with software development; and manufactures, maintains, and sells electric locks, ten keys, etc. In addition, it develops software for core system construction for use in the government, finance, communication, and transportation sectors. ISB Corporation was incorporated in 1970 and is headquartered in Tokyo, Japan.

How the Company Makes Money

ISB CORP generates revenue through multiple streams, primarily from its IT services and solutions. The company earns money by charging clients for software development projects, system integration services, and ongoing IT support and maintenance contracts. Additionally, ISB CORP monetizes its proprietary software products through licensing agreements and subscription models. Key revenue streams also include consulting services aimed at helping organizations optimize their IT infrastructure and navigate digital transformation initiatives. Strategic partnerships with technology providers further bolster its offerings, enabling ISB CORP to deliver comprehensive solutions that attract a wider client base and enhance its competitive edge in the market.

ISB CORP (Japan) Financial Statement Overview

Summary

Balance sheet strength is a major positive (minimal debt and steadily expanding equity/assets). Offsetting this, profitability weakened sharply in 2025 despite higher revenue, and cash conversion deteriorated with lower operating/free cash flow and weaker FCF-to-net income coverage.

Income Statement

Revenue has grown steadily from 2020 to 2025 (annual growth mostly mid-to-high single digits, with a strong 2023), but momentum softened in 2024 and 2025. Profitability is moderate for the space: gross margin has been stable around ~23–24%, while operating and net margins have been more volatile. Notably, 2025 saw a sharp drop in net income and margins versus 2024 despite higher revenue, suggesting cost pressure and/or non-recurring headwinds.

Balance Sheet

The balance sheet is very conservative: debt is minimal and leverage is extremely low (debt-to-equity roughly ~0.8%–1.6% over the period), which materially reduces financial risk. Equity and total assets have expanded consistently year over year, supporting balance-sheet strength. The main trade-off is that profitability on equity, while solid in 2021–2024, is not provided for 2025 and earnings volatility could weigh on returns if it persists.

Cash Flow

Cash generation is positive, but quality and conversion weakened recently. Operating cash flow and free cash flow fell in 2025 versus 2024, and free cash flow covered less than half of net income in 2025 (down from strong conversion in 2021–2024). Free cash flow growth has also been choppy (notably down in 2021 and 2024), pointing to variability in working capital and/or investment needs.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	35.72B	37.02B	33.95B	32.39B	28.95B	26.18B
Gross Profit	8.60B	8.41B	8.24B	7.80B	6.96B	6.30B
EBITDA	3.04B	2.77B	3.05B	2.86B	2.88B	2.50B
Net Income	1.69B	1.44B	2.03B	1.47B	1.42B	1.11B
Balance Sheet
Total Assets	20.47B	21.61B	19.80B	17.99B	16.46B	14.36B
Cash, Cash Equivalents and Short-Term Investments	8.59B	9.08B	8.98B	8.88B	7.63B	6.07B
Total Debt	120.00M	120.00M	120.00M	120.00M	120.00M	120.00M
Total Liabilities	6.77B	7.09B	6.30B	6.17B	5.78B	4.80B
Stockholders Equity	13.70B	14.52B	13.50B	11.82B	10.68B	9.56B
Cash Flow
Free Cash Flow	0.00	850.00M	1.50B	1.82B	1.80B	1.31B
Operating Cash Flow	0.00	1.75B	1.88B	1.95B	1.93B	1.46B
Investing Cash Flow	0.00	-1.02B	-1.35B	-270.09M	-73.18M	-202.94M
Financing Cash Flow	0.00	-617.00M	-480.65M	-454.86M	-341.20M	-402.86M

ISB CORP (Japan) Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1733.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9702, the sentiment is Positive. The current price of 1733 is below the 20-day moving average (MA) of 1850.05, below the 50-day MA of 1797.97, and above the 200-day MA of 1602.15, indicating a bullish trend. The MACD of 50.51 indicates Negative momentum. The RSI at 78.03 is Negative, neither overbought nor oversold. The STOCH value of 95.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9702.

ISB CORP (Japan) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9651	80 Outperform	¥17.28B	11.33	―	2.99%	12.78%	90.80%
9702	75 Outperform	¥22.97B	15.96	―	3.01%	9.84%	-19.96%
3648	74 Outperform	¥21.15B	10.37	―	2.40%	21.57%	129.44%
3800	71 Outperform	¥14.16B	15.87	―	3.62%	0.85%	12.73%
2307	70 Outperform	¥15.30B	10.03	―	3.14%	3.58%	0.23%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4192	53 Neutral	¥9.34B	-538.49	―	―	22.18%	28.27%

ISB CORP (Japan) Corporate Events

ISB Corp Sets 2030 Growth Plan With Stronger Profit, People and ESG Targets

ISB Corporation has revamped its group materiality and unveiled a new Medium- to Long-Term Business Plan 2030 to accelerate growth and respond to rapid changes in the digital and social environment. The plan, branded under the theme “ISB Innovation: Toward Breakthrough Growth,” succeeds the current 2024–2026 program and is positioned as a framework to transform the company into an enduring enterprise.

Under MTP2030, ISB will pursue three key strategies spanning business operations in information services and security systems, human capital development, and financial and management foundations. The group targets a significant scale-up by fiscal 2030, including raising consolidated net sales to at least ¥50 billion and operating profit to ¥4.5 billion, while improving productivity and expanding its workforce.

The roadmap also emphasizes diversity and engagement, aiming to increase the share of women in management and among new graduate hires, and to boost employee engagement scores. For shareholders and other stakeholders, ISB plans stronger capital efficiency with higher ROE and dividend payout, alongside environmental commitments such as a 30% cut in domestic Scope 1 and 2 greenhouse gas emissions from fiscal 2024 levels.

The most recent analyst rating on (JP:9702) stock is a Buy with a Yen1998.00 price target. To see the full list of analyst forecasts on ISB CORP (Japan) stock, see the JP:9702 Stock Forecast page.

ISB updates capital-cost-focused management policy to bolster long-term value

ISB Corporation has announced that its Board of Directors has adopted a new policy framework to advance management with a strong awareness of capital costs and the company’s share price. The move is aimed at supporting sustainable growth and boosting the medium- to long-term corporate value of the company.

At a board meeting held on February 13, 2026, directors reviewed ISB’s current initiatives related to capital efficiency and market valuation, and resolved on future steps to improve them. The company signaled that these measures are intended to align management decisions more closely with shareholder interests and market expectations.

The most recent analyst rating on (JP:9702) stock is a Buy with a Yen1998.00 price target. To see the full list of analyst forecasts on ISB CORP (Japan) stock, see the JP:9702 Stock Forecast page.

ISB Corporation Highlights Dual IT and Security Focus in Latest Corporate Overview

ISB Corporation, an independent system integrator listed on the Tokyo Stock Exchange Prime Market, focuses on software development and access control security systems. The group comprises seven domestic and one overseas consolidated subsidiary, employs 2,757 staff including part-time and contract workers, and is led by Representative Director and President Kazufumi Wakao.

In its latest corporate disclosure for the fiscal year ended December 31, 2025, ISB highlighted its dual business structure in information services and security systems as the foundation for ongoing operations. The company’s established market presence, capital base of approximately ¥2.4 billion, and expanding group structure underscore its role as a mid-sized technology player in Japan’s IT and security infrastructure markets.

The most recent analyst rating on (JP:9702) stock is a Buy with a Yen1998.00 price target. To see the full list of analyst forecasts on ISB CORP (Japan) stock, see the JP:9702 Stock Forecast page.

ISB Subsidiary SMC to Relocate Head Office as Part of Group Consolidation Plan

ISB Corporation has approved the relocation of the head office of its consolidated subsidiary SMC Corporation, moving it from Shinagawa-ku to Konan, Minato-ku, Tokyo, with the change scheduled to take effect on April 1, 2026, subject to shareholder approval through an amendment to SMC’s articles of incorporation. The move is part of a broader ISB group relocation plan aimed at consolidating group companies at a single, state-of-the-art office site to improve business management efficiency, reinforce intercompany networks, enhance the group’s corporate brand, boost recruitment competitiveness, and increase employee engagement, signalling a strategic investment in workplace infrastructure and organizational integration.

The most recent analyst rating on (JP:9702) stock is a Buy with a Yen1998.00 price target. To see the full list of analyst forecasts on ISB CORP (Japan) stock, see the JP:9702 Stock Forecast page.