Koei Tecmo Holdings Co., Ltd. (3635) AI Stock Analysis

• Market Cap: ¥635.90B
• Dividend Yield: 2.51%
• Average Volume (3M): 719.87K
• Price to Earnings (P/E): 20.0
• Beta (1Y): 0.47
• Revenue Growth: -4.23%
• EPS Growth: -18.49%
• Country: JP
• Employees: 2,531
• Sector: Communication Services
• Sector Strength: 94
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 19.23
• Shares Outstanding: 336,096,920
• 10 Day Avg. Volume: 1,077,570
• 30 Day Avg. Volume: 719,866
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥2,075.00
• Price Target Upside: 8.50% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2

• Rating: 64 Neutral
• Price Target: ¥2,106.00 ▲(10.12% Upside)

Koei Tecmo Holdings Co., Ltd. exhibits strong financial performance with robust revenue growth and profitability, which is the most significant factor supporting the stock. However, technical analysis indicates bearish momentum, suggesting potential short-term downside. The valuation is fair, offering a moderate P/E ratio and a reasonable dividend yield, but not enough to offset the negative technical signals.

Koei Tecmo Holdings Co., Ltd. Business Overview & Revenue Model

Company Description

Koei Tecmo Holdings Co., Ltd., together with its subsidiaries, operates as an entertainment company in Japan, North America, Europe, rest of Asia, and internationally. The company operates through Entertainment, Amusement, and Real Estate segments. The Entertainment segment develops and sells entertainment contents. It offers software for personal computers and gaming consoles. The Amusement segment develops commercial amusements; and manages amusement arcades. The Real Estate segment engages in the operation, management, and lease of real estate properties. It is also involved in the venture capital and other activities. The company was founded in 2009 and is headquartered in Yokohama, Japan. Koei Tecmo Holdings Co., Ltd. is a subsidiary of Koyu Holdings Co., Ltd.

How the Company Makes Money

Koei Tecmo generates revenue primarily through the sale of video games across multiple platforms, including physical copies and digital downloads. The company's key revenue streams include retail sales of its gaming titles, in-game purchases, and downloadable content (DLC) for existing games. Additionally, Koei Tecmo earns revenue from mobile gaming applications and subscriptions. Significant partnerships with other gaming companies and collaborations on cross-platform titles also contribute to its earnings. The company capitalizes on its strong brand recognition and loyal fan base, frequently releasing sequels and expanded versions of its popular franchises, which helps to sustain and grow its revenue streams.

Koei Tecmo Holdings Co., Ltd. Financial Statement Overview

Summary

Koei Tecmo Holdings Co., Ltd. demonstrates strong financial health with robust revenue growth, high profitability, and effective cash flow management. The company maintains a low leverage profile, enhancing its financial stability. Minor areas for improvement include optimizing equity financing and addressing cost pressures.

Income Statement

Koei Tecmo Holdings Co., Ltd. has demonstrated strong revenue growth over the years, with a notable 9.38% increase in the most recent year. The company maintains high profitability with a consistent gross profit margin above 60% and a net profit margin around 45%. The EBIT and EBITDA margins also reflect strong operational efficiency. However, the slight decline in gross profit margin from previous years indicates potential cost pressures.

Balance Sheet

The company's balance sheet is robust, with a low debt-to-equity ratio, indicating prudent financial management and low leverage risk. The return on equity is healthy, reflecting efficient use of equity capital. However, the equity ratio suggests a moderate reliance on equity financing, which could be optimized further.

Cash Flow

Koei Tecmo Holdings shows strong cash flow management, with a high operating cash flow to net income ratio, indicating effective conversion of income into cash. The free cash flow growth has been impressive, although it experienced volatility in earlier years. The free cash flow to net income ratio is consistently high, underscoring solid cash generation relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	83.15B	83.15B	84.58B	78.42B	72.76B	60.37B
Gross Profit	52.39B	52.39B	55.30B	57.10B	50.60B	39.07B
EBITDA	38.92B	51.90B	30.31B	40.78B	36.08B	25.95B
Net Income	37.63B	37.63B	33.79B	30.93B	35.36B	29.55B
Balance Sheet
Total Assets	209.83B	209.83B	245.80B	210.89B	219.80B	190.67B
Cash, Cash Equivalents and Short-Term Investments	44.49B	44.49B	70.09B	20.61B	45.42B	17.23B
Total Debt	467.00M	467.00M	46.54B	47.34B	48.15B	41.00M
Total Liabilities	20.41B	20.41B	70.25B	68.20B	81.70B	25.54B
Stockholders Equity	189.42B	189.42B	175.55B	142.68B	138.10B	165.13B
Cash Flow
Free Cash Flow	0.00	32.82B	34.80B	28.80B	23.47B	28.14B
Operating Cash Flow	0.00	34.37B	36.60B	29.69B	24.82B	29.73B
Investing Cash Flow	0.00	40.97B	-24.86B	-21.39B	-13.17B	-12.29B
Financing Cash Flow	0.00	-63.17B	-15.47B	-16.59B	-4.56B	-19.40B

Koei Tecmo Holdings Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1912.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3635, the sentiment is Negative. The current price of 1912.5 is below the 20-day moving average (MA) of 2005.85, below the 50-day MA of 2065.06, and below the 200-day MA of 2045.81, indicating a bearish trend. The MACD of -52.86 indicates Positive momentum. The RSI at 32.80 is Neutral, neither overbought nor oversold. The STOCH value of 37.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3635.

Koei Tecmo Holdings Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3635	64 Neutral	¥635.90B	19.98		2.51%	-4.23%	-18.49%
Sector *	60 Neutral	$46.60B	4.09	-11.40%	4.13%	1.85%	-42.71%
CCOEF	―	$11.36B	30.77	26.13%	0.98%	―	―
DNACF	―	$1.69B	8.00	13.60%	2.75%	―	―
GUNGF	―	$1.03B	27.29	4.72%	4.15%	―	―
SGAMF	―	$4.06B	40.47	4.51%	1.63%	―	―
SQNXF	―	$8.14B	66.49	5.77%	1.27%	―	―

Koei Tecmo Holdings Co., Ltd. Corporate Events

Koei Tecmo Exceeds Profit Forecasts and Raises Dividend

Koei Tecmo Holdings Co., Ltd. announced a discrepancy between its performance forecast and actual results for the fiscal year ending March 2025, with actual net sales falling short of forecasts but operating and ordinary profits exceeding expectations. This was attributed to the release of nine new titles and cost reductions in operating titles. Additionally, the company revised its year-end dividend forecast from 48 yen to 60 yen per share, reflecting its commitment to shareholder returns and improved financial performance.

Koei Tecmo Reports Fiscal Year 2025 Financial Results with Increased Operating Profit

Koei Tecmo Holdings Co., Ltd. reported its consolidated financial results for the fiscal year ending March 31, 2025, showing a slight decline in net sales by 1.7% compared to the previous year, but an increase in operating profit by 12.7%. The company also announced a dividend increase to 60 yen per share, reflecting its commitment to returning value to shareholders. Despite the decrease in comprehensive income, the company maintained a strong financial position with a high capital adequacy ratio of 89.9%.

Koei Tecmo Announces Leadership Changes and Strategic Corporate Restructuring

Koei Tecmo Holdings Co., Ltd. has announced significant changes in its leadership and corporate structure. These include the appointment of Hiroshi Koinuma as the new President and CEO, a shift in management roles to enhance governance, and the establishment of Koei Tecmo Corporate Finance Co., Ltd. to consolidate group finance operations, aiming for better cash management and investment governance.