Digital Holdings, Inc. (2389) AI Stock Analysis

• Market Cap: ¥19.49B
• Dividend Yield: 4.95%
• Average Volume (3M): 52.43K
• Price to Earnings (P/E): 8.7
• Beta (1Y): 0.63
• Revenue Growth: -9.56%
• EPS Growth: 127.51%
• Country: JP
• Employees: 970
• Sector: Communication Services
• Sector Strength: 89
• Industry: Advertising Agencies
• EPS (TTM): 114.58
• Shares Outstanding: 17,459,908
• 10 Day Avg. Volume: 34,620
• 30 Day Avg. Volume: 52,426
• PEG Ratio: 0.10
• Price to Book (P/B): 0.86
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.52
• 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

• Rating: 64 Neutral
• Price Target: ¥1,458.00 ▲(10.71%Upside)

Digital Holdings, Inc. presents a mixed investment case. The company's financial stability, underpinned by a strong balance sheet, is a significant strength. Valuation metrics suggest the stock may be undervalued, with a compelling dividend yield. However, technical analysis indicates limited momentum, and past financial performance reveals revenue and profit growth challenges. The lack of earnings call insights further limits the current outlook.

Digital Holdings, Inc. Business Overview & Revenue Model

Company Description

Digital Holdings, Inc. (2389) is a prominent player in the digital marketing and advertising industry. The company specializes in providing comprehensive digital marketing solutions, including online advertising, data analytics, and performance marketing services. By leveraging advanced technology and data-driven strategies, Digital Holdings, Inc. helps businesses enhance their online presence and optimize their marketing efforts across various digital platforms.

How the Company Makes Money

Digital Holdings, Inc. generates revenue primarily through its diverse portfolio of digital marketing services. Key revenue streams include online advertising services, where the company collaborates with businesses to create and manage effective advertising campaigns across digital channels. The company also earns income from its data analytics services, which provide clients with actionable insights to improve their marketing strategies. Additionally, performance marketing services, which focus on delivering measurable results such as lead generation and sales conversions, contribute significantly to the company's earnings. Strategic partnerships with digital platforms and technology providers enhance the company's service offerings and expand its market reach, further supporting its revenue growth.

Digital Holdings, Inc. Financial Statement Overview

Summary

Digital Holdings, Inc. shows financial stability with a strong balance sheet characterized by high equity and low debt, indicating robust financial health. The income statement reflects challenges, particularly in sustaining revenue and profit growth, though EBIT and EBITDA margins have seen recent improvement. Cash flow generation has improved but with historical volatility, raising concerns about consistency.

Income Statement

The company has experienced erratic revenue performance with a decline in recent years. Gross and net profit margins have fluctuated, with the latest year showing some recovery in net income after previous declines. EBIT and EBITDA margins have improved in the latest period, indicating better operational efficiency but remain challenged overall.

Balance Sheet

The balance sheet is solid, with a high equity ratio and low debt-to-equity ratio, indicating financial stability and low leverage. The company maintains strong cash reserves, supporting its liquidity position. Stockholders' equity has remained stable, providing a strong capital base.

Cash Flow

Cash flow generation has been inconsistent, with negative free cash flow in previous years turning positive in the latest period. Operating cash flow has shown significant improvement, but historical volatility poses concerns. The company has managed to improve free cash flow to net income ratios recently.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
15.53B	16.16B	16.26B	16.92B	98.52B	88.77B
	Gross Profit
9.63B	10.02B	10.95B	11.21B	25.23B	17.79B
	EBIT
1.04B	984.00M	616.00M	-417.00M	10.92B	3.24B
	EBITDA
4.13B	1.96B	856.00M	20.00M	11.65B	3.86B
	Net Income Common Stockholders
2.64B	1.34B	237.00M	5.72B	10.23B	3.75B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
27.91B	25.31B	24.41B	33.33B	46.32B	48.75B
	Total Assets
46.93B	48.22B	50.28B	55.96B	69.73B	71.43B
	Total Debt
4.08B	4.08B	5.00B	5.17B	9.04B	10.83B
	Net Debt
-20.09B	-17.66B	-13.86B	-21.30B	-28.50B	-16.23B
	Total Liabilities
15.83B	15.15B	16.39B	19.72B	28.80B	31.42B
	Stockholders Equity
28.74B	30.69B	29.33B	29.83B	32.67B	31.19B
Cash Flow		Free Cash Flow
5.47B	6.92B	-3.79B	-8.18B	10.97B	1.22B
	Operating Cash Flow
6.72B	6.92B	-3.44B	-7.61B	12.13B	2.18B
	Investing Cash Flow
191.00M	395.00M	-1.27B	4.70B	2.99B	1.57B
	Financing Cash Flow
-1.94B	-4.68B	-3.06B	-8.56B	-4.83B	2.95B

Digital Holdings, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1317.00
• 50DMA: Negative
• 100DMA: Negative
• 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:2389, the sentiment is Negative. The current price of 1317 is below the 20-day moving average (MA) of 1379.90, below the 50-day MA of 1364.08, and above the 200-day MA of 1206.46, indicating a neutral trend. The MACD of -11.30 indicates Positive momentum. The RSI at 39.61 is Neutral, neither overbought nor oversold. The STOCH value of 4.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:2389.

Digital Holdings, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6535	81 Outperform	¥33.93B	13.20		3.73%	14.35%	-5.35%
7068	74 Outperform	¥12.59B	14.26		2.00%	2.79%	194.48%
2491	67 Neutral	¥26.08B	5.98		7.04%	5.36%	32.46%
2389	64 Neutral	¥19.49B	8.69		4.95%	-9.56%	127.51%
2461	63 Neutral	¥28.16B	21.77		4.48%	-5.88%	15.11%
Sector *	61 Neutral	$14.78B	5.89	-4.32%	3.67%	2.75%	-30.30%
4499	59 Neutral	¥24.55B	158.92		―	10.17%	―

Digital Holdings, Inc. Corporate Events

Digital Holdings Reports Q1 2025 Financial Results with Profit Surge

Digital Holdings, Inc. reported its consolidated financial results for the first quarter of 2025, showing a decline in revenue by 14.6% compared to the previous year. Despite the revenue drop, the company saw a significant increase in ordinary profit and profit attributable to owners, indicating improved operational efficiency. The company maintains its forecast for the fiscal year 2025, with expectations of a decrease in revenue and operating profit but a substantial rise in ordinary profit and profit attributable to owners, reflecting strategic adjustments in its operations.

Digital Holdings Receives USD 27 Million Dividend from OPT America

Digital Holdings, Inc. announced the receipt of a USD 27 million dividend from its consolidated subsidiary, OPT America, Inc. This dividend will be recorded as revenue in the company’s non-consolidated financial statements for the fiscal year ending December 31, 2025. However, it will have an immaterial impact on the consolidated financial results for the same period.