Ines Corporation (9742) AI Stock Analysis

• Market Cap: ¥37.87B
• Dividend Yield: 2.77%
• Average Volume (3M): 39.97K
• Price to Earnings (P/E): 40.4
• Beta (1Y): 0.72
• 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: 747.53
• 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: ¥1,967.00 ▼(-0.61% Downside)

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 and low leverage

A very low debt-to-equity ratio and sizable equity base provide durable financial flexibility. This reduces refinancing risk, supports investment or acquisitive optionality during downturns, and lets management prioritize strategic initiatives without near-term liquidity strain.

Positive trailing-twelve-month free cash flow

Sustained positive TTM free cash flow indicates the business can convert earnings into cash, enabling capex, dividends, or debt reduction. Over a multi-quarter horizon this supports shareholder returns and resilience to cyclical revenue swings despite prior year volatility.

Improved annual profitability in 2025 vs 2024

Year-over-year margin recovery demonstrates management's ability to restore operational efficiency and control costs. If sustained, this indicates the company can lift returns through execution rather than relying solely on top-line growth, strengthening long-term earnings durability.

Negative Factors

TTM revenue decline

A declining TTM revenue trend signals weakening demand or market share loss which can erode economies of scale and make fixed costs harder to cover. Over several quarters this reduces visibility into growth and constrains sustainable margin recovery and reinvestment capacity.

Margin compression and low TTM margins

Compressed operating and net margins limit the company's ability to generate high returns on capital and leave little buffer against cost inflation. Persistently low margins weaken reinvestment potential and make long-term profitability sensitive to small revenue or cost shocks.

Volatile cash generation with prior large deficit

Material swings in free cash flow complicate planning for capex, dividends, or buybacks and raise the likelihood of episodic funding needs. Structural cash volatility increases financing risk and reduces the reliability of cash as a long-term support for strategic investments.

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

Ines Corporation generates revenue through multiple key streams, primarily by selling its proprietary software solutions and hardware products to enterprises in various sectors. The company has a subscription-based model for its software services, allowing clients to pay for access to advanced features and ongoing updates. Additionally, Ines Corporation earns income from hardware sales, including telecommunications equipment and IoT devices. Strategic partnerships with major technology firms and telecommunications providers enhance its market reach and drive sales growth. The company also benefits from consultancy services, providing expertise on digital transformation projects, which further contributes to its overall revenue.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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	3.31B	5.47B	4.68B	5.75B	4.88B	4.38B
Net Income	973.00M	2.44B	1.79B	2.54B	1.30B	1.43B
Balance Sheet
Total Assets	49.56B	56.73B	54.43B	48.52B	46.83B	51.26B
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	5.00B	20.00M	29.00M	40.00M
Total Liabilities	11.79B	17.53B	16.64B	12.24B	12.21B	12.46B
Stockholders Equity	37.77B	39.19B	37.79B	36.29B	34.62B	38.80B
Cash Flow
Free Cash Flow	3.00B	46.00M	-8.53B	700.00M	4.79B	542.00M
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: Positive
• RSI: Neutral
• 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 above the 20-day moving average (MA) of 1916.80, above the 50-day MA of 1895.46, and above the 200-day MA of 1776.96, indicating a bullish trend. The MACD of -6.09 indicates Positive momentum. The RSI at 55.03 is Neutral, neither overbought nor oversold. The STOCH value of 48.75 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
9658	82 Outperform	¥38.97B	13.83	―	2.97%	16.59%	40.56%
4743	81 Outperform	¥43.78B	15.85	―	3.28%	-3.21%	8.89%
4725	77 Outperform	¥33.89B	9.83	10.34%	4.82%	-3.03%	38.83%
9739	76 Outperform	¥36.58B	10.69	―	3.38%	-0.10%	-19.50%
4709	72 Outperform	¥31.75B	12.93	―	3.40%	12.64%	30.73%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
9742	58 Neutral	¥37.87B	40.42	―	2.77%	-2.93%	-30.16%

Ines Corporation Corporate Events

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.

INES Corporation Reports Decline in Financial Performance and Revises Forecasts

INES Corporation reported a decline in its financial performance for the six months ending September 30, 2025, with net sales dropping by 11.5% compared to the previous year. The company has revised its earnings and dividend forecasts, indicating a challenging market environment and potential impacts on shareholder returns.

The most recent analyst rating on (JP:9742) stock is a Hold with a Yen1721.00 price target. To see the full list of analyst forecasts on Ines Corporation stock, see the JP:9742 Stock Forecast page.