Ines Corporation (9742) AI Stock Analysis

• Market Cap: ¥42.83B
• Dividend Yield: 2.77%
• Average Volume (3M): 39.97K
• Price to Earnings (P/E): 74.7
• Beta (1Y): 0.70
• Revenue Growth: -2.93%
• EPS Growth: -30.16%
• Country: JP
• Employees: 1,350
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 6.56
• Shares Outstanding: 20,900,000
• 10 Day Avg. Volume: 46,390
• 30 Day Avg. Volume: 39,973
• PEG Ratio: 0.40
• Price to Book (P/B): 0.88
• Price to Sales (P/S): 0.85
• P/FCF Ratio: 747.52
• 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: 58 Neutral
• Price Target: ¥2,315.00 ▲(16.98% Upside)
• Action: Reiterated Date: 02/03/26
• Date: Action: Reiterated 02/03/26

The score is held up mainly by balance-sheet strength and current positive TTM free cash flow, but it is weighed down by weakening TTM revenue/margins, negative momentum indicators (notably MACD), and a high P/E that leaves limited valuation cushion.

Positive Factors

Conservative balance sheet

A very low debt-to-equity (~0.10 TTM) and sizable equity base give Ines durable financial flexibility. This conservatism reduces refinancing and liquidity risk, supports appetite for strategic investment or buybacks, and helps the firm absorb cyclical earnings shocks over months.

Positive trailing free cash flow

A positive TTM free cash flow (~¥3.0B) indicates the business can generate operating cash to fund capex, dividends, or debt reduction without relying on external financing. Consistent FCF supports long-term self-funding and strategic optionality over 2–6 months.

Annual profitability recovery in 2025

Improved annual margins and higher operating profit in 2025 show management can restore profitability through cost control or pricing actions. This demonstrates structural ability to recover earnings power, which supports medium-term cash generation and return improvement if trends continue.

Negative Factors

Declining revenue trend

TTM revenue decline indicates weakening demand or loss of share. Persistent top-line contraction erodes scale economics, limits leverage of fixed costs, and makes margin recovery harder; sustained declines can impair long-term growth and strategic flexibility.

Margin compression in the TTM

TTM margin compression materially reduces cash flow conversion and return on capital. Lower margins constrain reinvestment, dividend capacity, and resilience to cost inflation; if margins remain depressed, capital allocation choices become more limited over the medium term.

Volatile free cash flow history

Large swings in free cash flow — a big deficit in 2024 despite positive TTM FCF — increase uncertainty for planning and capital allocation. Volatility raises the risk that cash will be constrained in weaker quarters, forcing cutbacks or balance-sheet moves when investment is needed.

Ines Corporation Business Overview & Revenue Model

Company Description

INES Corporation provides information network system services to industrial corporations, financial institutions, and public entities in Japan. The company offers operation and maintenance services for information systems and communication networks, including IT outsourcing and iDC services; and information system analysis and design, program development, testing, and conversion services, such as software development for the financial, distribution, and service industries, as well as for the public sector. In addition, it provides system integration services for software and hardware systems comprising construction of Web-based networks, client/server networks, local area networks, and wide-area networks; and sells mobile PCs, automatic printing device systems, and other equipment. Further, the company offers other system related services, including data input, help desk, and security services, as well as machine-room, and network operation and management, systems maintenance, and training in PC systems; and hardware procurement, staff training and education, ERP consulting, and outsourcing services. The company was formerly known as Kyoei Computer Center and changed its name to INES Corporation in August 1984. INES Corporation was incorporated in 1964 and is headquartered in Tokyo, Japan.

How the Company Makes Money

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Ines Corporation Financial Statement Overview

Summary

Financial quality is mixed: a strong, conservatively financed balance sheet (low debt-to-equity and sizable equity base) offsets weaker recent operating performance. Profitability improved in 2025 versus 2024, but the latest TTM shows revenue decline and margin compression, and cash flow has been volatile despite currently positive TTM free cash flow.

Income Statement

Profitability has been moderate but volatile. Annual results improved from 2024 to 2025 with higher operating profit and net income (net margin rising to ~6.0% in 2025 from ~4.4% in 2024), but the latest TTM (Trailing-Twelve-Months) shows a clear step-down in earnings power (net margin ~2.6% and operating margin ~4.0%) alongside a revenue decline. Overall, the business can generate profits in good years, but recent margin compression and negative TTM revenue growth are key concerns.

Balance Sheet

The balance sheet looks conservatively financed, with low-to-moderate leverage and a large equity base. Debt levels remain manageable (debt-to-equity ~0.10 in TTM (Trailing-Twelve-Months) and ~0.19 in 2025 annual), providing flexibility. The main weakness is that returns on equity are not especially high (mid-single digits in most periods, ~3.4% in TTM (Trailing-Twelve-Months)), reflecting weaker recent profitability rather than balance-sheet stress.

Cash Flow

Cash generation is mixed. TTM (Trailing-Twelve-Months) free cash flow is solid and positive (~¥3.0B) with growth versus the prior period, but annual cash flow has been volatile, including a very large free-cash-flow deficit in 2024. Cash conversion also varies materially year to year (free cash flow relative to net income is strong in TTM (Trailing-Twelve-Months) but was very weak in 2025 annual), suggesting swings in working capital and/or investment timing.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	37.63B	40.56B	40.56B	42.40B	40.03B	41.57B
Gross Profit	7.36B	9.72B	9.73B	10.10B	8.48B	8.58B
EBITDA	3.06B	5.45B	4.87B	5.85B	4.91B	5.01B
Net Income	973.00M	2.44B	1.79B	2.54B	1.30B	1.43B
Balance Sheet
Total Assets	49.56B	56.90B	54.55B	48.59B	46.91B	51.34B
Cash, Cash Equivalents and Short-Term Investments	9.98B	8.21B	6.48B	11.68B	12.24B	12.90B
Total Debt	3.96B	7.58B	5.01B	9.00M	13.00M	23.00M
Total Liabilities	11.79B	17.71B	16.76B	12.30B	12.29B	12.54B
Stockholders Equity	37.77B	39.19B	37.79B	36.29B	34.62B	38.80B
Cash Flow
Free Cash Flow	3.00B	46.00M	-7.48B	1.37B	5.69B	1.56B
Operating Cash Flow	3.62B	1.48B	2.14B	2.33B	6.43B	1.92B
Investing Cash Flow	1.08B	-288.00M	-9.99B	-2.04B	-1.42B	-11.59B
Financing Cash Flow	-1.98B	1.54B	3.95B	-849.00M	-5.64B	-971.00M

Ines Corporation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1979.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9742, the sentiment is Positive. The current price of 1979 is below the 20-day moving average (MA) of 2113.80, below the 50-day MA of 2008.94, and above the 200-day MA of 1848.38, indicating a bullish trend. The MACD of 58.99 indicates Negative momentum. The RSI at 72.36 is Negative, neither overbought nor oversold. The STOCH value of 79.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9742.

Ines Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3762	78 Outperform	¥65.18B	18.88	17.96%	1.83%	13.23%	16.07%
2359	78 Outperform	¥30.58B	8.18	―	2.93%	2.11%	5.55%
2317	76 Outperform	¥148.22B	14.81	―	2.30%	13.82%	37.07%
3923	74 Outperform	¥262.56B	28.54	―	0.22%	25.00%	62.07%
4725	65 Neutral	¥30.51B	10.75	10.34%	4.82%	-3.03%	38.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
9742	58 Neutral	¥42.83B	74.72	―	2.77%	-2.93%	-30.16%

Ines Corporation Corporate Events

INES Corporation Warns of Loss on Public-Sector IT Project, Cuts Dividend Forecast

INES Corporation has sharply revised its forecast for the fiscal year ending March 31, 2026, projecting net sales of ¥38 billion and shifting from previously expected profits to an operating loss and net loss after recording an impairment on capitalized development costs. The downgrade stems mainly from a large public-sector system standardization project, where rising costs of around ¥1 billion and an additional ¥1 billion impairment on project-related investments have forced the company to reset expectations, though it anticipates a return to profitability in the following fiscal year and is preparing a new medium-term management plan.

Reflecting weaker earnings, INES has cut its forecast for the year-end dividend from ¥30 to ¥25 per share, bringing the total annual payout to ¥50 compared with ¥55 a year earlier. The move signals pressure on short-term shareholder returns but underscores management’s focus on absorbing near-term project strains to support the rollout for more than 60 organizations scheduled to go live in the year ending March 31, 2027, a phase that is expected to restore earnings momentum.

The most recent analyst rating on (JP:9742) stock is a Hold with a Yen2415.00 price target. To see the full list of analyst forecasts on Ines Corporation stock, see the JP:9742 Stock Forecast page.

INES Swings to Loss Over Nine Months but Maintains Dividend and Profit Outlook

INES Corporation reported a sharp deterioration in results for the nine months ended Dec. 31, 2025, with net sales down 10.4% year on year to ¥25.2 billion and a swing to an operating loss of ¥734 million. Profit attributable to owners of parent fell into a ¥465 million loss, compared with a ¥998 million profit a year earlier, resulting in a loss per share of ¥22.36, while comprehensive income also turned negative.

Despite weaker earnings, INES maintained a solid financial base, with total assets of ¥49.6 billion and an equity ratio rising to 76.2% as net assets stood at ¥37.8 billion. The company kept its dividend policy unchanged, paying an interim dividend of ¥25 per share and forecasting a full-year total of ¥55, while also reaffirming its full-year outlook that assumes lower sales and profits but a return to net profitability, signaling a cautious but stable stance for shareholders.

The most recent analyst rating on (JP:9742) stock is a Hold with a Yen2004.00 price target. To see the full list of analyst forecasts on Ines Corporation stock, see the JP:9742 Stock Forecast page.

INES Swings to Loss for Nine-Month Period but Keeps Dividend and Full-Year Outlook

INES Corporation reported a sharp deterioration in results for the nine months ended December 31, 2025, with net sales down 10.4% year on year to ¥25.2 billion and a swing to an operating loss of ¥734 million and a net loss attributable to owners of the parent of ¥465 million, compared with solid profits a year earlier. Despite the earnings slump and a decline in total assets and shareholders’ equity, the company is maintaining its dividend plan at an annual ¥55 per share and left its full-year forecast unchanged, projecting a 3.9% decline in net sales and profit drops of around 60%, signaling pressure on profitability but a desire to sustain shareholder returns while it navigates weaker business conditions.

The most recent analyst rating on (JP:9742) stock is a Hold with a Yen2129.00 price target. To see the full list of analyst forecasts on Ines Corporation stock, see the JP:9742 Stock Forecast page.