Digital Arts Inc. (2326) AI Stock Analysis

• Market Cap: ¥101.32B
• Dividend Yield: 1.25%
• Average Volume (3M): 92.24K
• Price to Earnings (P/E): 31.0
• Beta (1Y): 0.95
• Revenue Growth: -5.73%
• EPS Growth: 49.33%
• Country: JP
• Employees: 252
• Sector: Technology
• Sector Strength: 86
• Industry: Software - Application
• EPS (TTM): 73.90
• Shares Outstanding: 14,133,000
• 10 Day Avg. Volume: 84,170
• 30 Day Avg. Volume: 92,243
• PEG Ratio: 4.22
• Price to Book (P/B): 5.06
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 31.40
• 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

• Rating: 76 Outperform
• Price Target: ―

Digital Arts Inc. is fundamentally strong, with excellent profitability and a solid balance sheet supporting its position in the market. Its financial performance is the most significant factor in the overall score. Technical analysis suggests a stable trend, while the valuation is fair, aligning with industry averages. The absence of detailed cash flow data and technical momentum indicators tempers the overall score.

Digital Arts Inc. Business Overview & Revenue Model

Company Description

Digital Arts Inc. (2326) is a leading provider in the digital security sector, specializing in the development and distribution of advanced information security solutions. The company offers a comprehensive range of products, including cloud-based security services, data encryption, anti-virus software, and secure communication systems, catering to both individual and enterprise clients. Their innovative technology ensures the protection of sensitive data across various digital platforms, reinforcing the integrity and confidentiality of user information.

How the Company Makes Money

Digital Arts Inc. generates revenue primarily through the sale of its software products and subscription-based services. The company’s key revenue streams include licensing fees for their software solutions, recurring subscription fees for cloud-based services, and maintenance and support contracts. Additionally, Digital Arts Inc. partners with various technology firms and enterprise clients to integrate their security solutions into broader IT infrastructures, which often involves long-term contracts and strategic partnerships. These partnerships not only enhance the company's market reach but also provide significant contributions to its overall earnings.

Digital Arts Inc. Financial Statement Overview

Summary

Digital Arts Inc. demonstrates strong financial health, characterized by high profitability, a debt-free balance sheet, and a history of consistent revenue growth. The robust income statement and balance sheet are tempered by limited current cash flow data. Overall, the company is well-positioned in the software application industry, with minimal financial risk and effective capital management.

Income Statement

The company shows strong profitability with a TTM (Trailing-Twelve-Months) gross profit margin of 66.5% and a net profit margin of 41.9%. Revenue growth is steady, with a 15.5% increase from 2022 to 2023, followed by a 10.3% increase in 2024. EBIT and EBITDA margins are robust at 42.5% and 51.0% respectively, indicating efficient operations and strong earnings before interest, taxes, depreciation, and amortization.

Balance Sheet

The company maintains a strong balance sheet with zero debt, resulting in an excellent debt-to-equity ratio. The return on equity (ROE) is impressive at 26.4% TTM, demonstrating effective use of shareholders' equity to generate profits. The equity ratio of 78.8% TTM reflects a strong capital structure with a healthy proportion of equity financing.

Cash Flow

The company's cash flow metrics show variability, with a TTM operating cash flow to net income ratio of 0, due to missing operating cash flow data. Historical data indicates solid free cash flow generation, though the absence of current period data limits the analysis. Free cash flow growth was strong in previous years, supporting financial flexibility.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	9.98B	11.51B	10.44B	9.05B	6.83B
Gross Profit	7.03B	6.93B	6.77B	6.38B	4.88B
EBITDA	5.48B	5.31B	5.30B	5.02B	3.84B
Net Income	3.18B	4.38B	3.06B	2.90B	2.06B
Balance Sheet
Total Assets	22.63B	22.52B	21.15B	19.34B	14.86B
Cash, Cash Equivalents and Short-Term Investments	17.95B	18.34B	17.02B	15.77B	11.38B
Total Debt	0.00	0.00	0.00	0.00	0.00
Total Liabilities	5.26B	6.52B	6.98B	7.18B	4.80B
Stockholders Equity	17.36B	16.00B	14.15B	12.14B	10.05B
Cash Flow
Free Cash Flow	2.79B	1.84B	2.28B	5.19B	4.39B
Operating Cash Flow	2.82B	2.83B	3.15B	6.17B	5.22B
Investing Cash Flow	-1.11B	1.01B	-867.00M	-978.00M	-830.00M
Financing Cash Flow	-2.10B	-2.54B	-1.05B	-810.00M	-671.00M

Digital Arts Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7590.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:2326, the sentiment is Positive. The current price of 7590 is above the 20-day moving average (MA) of 7539.00, above the 50-day MA of 7183.20, and above the 200-day MA of 6178.81, indicating a neutral trend. The MACD of 38.01 indicates Positive momentum. The RSI at 43.46 is Neutral, neither overbought nor oversold. The STOCH value of 5.13 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:2326.

Digital Arts Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2326	76 Outperform	¥101.32B	31.02		1.25%	-5.73%	49.33%
4704	75 Outperform	$1.27T	39.19	29.09%	1.92%	9.63%	233.82%
4812	75 Outperform	¥428.81B	28.39		1.76%	7.49%	1.09%
3626	74 Outperform	¥1.09T	21.86		1.53%	4.13%	5.66%
4686	73 Outperform	¥235.06B	19.07		0.55%	4.47%	-1.74%
Sector *	69 Neutral	¥228.24B	14.40	7.64%	2.72%	9.13%	8.48%
4755	58 Neutral	$1.68T	―	-22.97%	―	10.38%	38.09%

Digital Arts Inc. Corporate Events

Digital Arts Inc. Acquires Own Shares to Boost Shareholder Value

Digital Arts Inc. announced the acquisition of 28,200 of its own shares, valued at JPY 188,427,000, through market purchases on the Tokyo Stock Exchange during April 2025. This move is part of a broader strategy approved by the Board of Directors to acquire up to 90,000 shares, aiming to enhance shareholder value and optimize capital structure.

Digital Arts Inc. Acquires Own Shares to Enhance Shareholder Value

Digital Arts Inc. announced the acquisition of 21,700 of its own shares, valued at JPY 135,658,000, through market purchases on the Tokyo Stock Exchange during March 2025. This move is part of a broader strategy approved by the Board of Directors to acquire up to 90,000 shares, aiming to enhance shareholder value and optimize capital structure.