| Valuation method | Value, ¥ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 1237.82 | -27 |
| Intrinsic value (DCF) | 1403.83 | -17 |
| Graham-Dodd Method | 728.45 | -57 |
| Graham Formula | 2034.55 | 21 |
Cresco Ltd. (4674.T) is a leading Japanese IT services company specializing in application development, IT infrastructure system architecture, and embedded systems. Headquartered in Tokyo and founded in 1948, Cresco provides end-to-end IT solutions, including system design, development, deployment, and maintenance for business applications. The company also offers engineering services for automotive electronics, home appliances, communication devices, and industrial equipment. Additionally, Cresco delivers IT infrastructure services that support core business operations and digital transformation solutions. Operating in Japan's competitive IT services sector, Cresco leverages its deep technical expertise and long-standing industry presence to serve diverse industries. With a market capitalization of approximately ¥64.4 billion, the company plays a significant role in Japan's technology ecosystem, combining traditional IT services with emerging digital solutions.
Cresco presents a stable investment opportunity within Japan's IT services sector, supported by consistent revenue (¥52.8 billion in FY2024) and profitability (net income of ¥3.7 billion). The company maintains a healthy balance sheet with ¥14.98 billion in cash and modest debt (¥2.39 billion). Its beta of 0.854 suggests lower volatility than the broader market, appealing to risk-averse investors. However, growth may be constrained by its domestic focus in Japan's mature IT market. The dividend yield (based on ¥58 per share) adds income appeal, but investors should monitor competitive pressures and Japan's macroeconomic conditions. Cresco's embedded systems expertise provides niche differentiation, but global IT firms and digital-native competitors pose long-term challenges.
Cresco competes in Japan's fragmented IT services market, where differentiation comes from technical specialization and client relationships. Its competitive advantage lies in embedded systems engineering—a high-barrier segment due to hardware-software integration complexity. This aligns well with Japan's automotive and electronics manufacturing base. However, in enterprise IT services, Cresco faces intense competition from larger domestic players (e.g., NTT Data) with greater scale and global reach. The company's ¥52.8 billion revenue is modest compared to industry leaders, limiting R&D and sales investment capacity. Cresco's infrastructure services are table stakes in the market, though its long-term client relationships provide revenue stability. Unlike offshore-centric competitors, Cresco's Japan-only operation reduces currency risk but exposes it to domestic economic cycles. The firm lacks visible cloud or AI differentiation—key growth areas where hyperscalers and consulting firms are gaining share. Success hinges on deepening embedded systems leadership while modernizing its enterprise IT offerings.