Digital Media Professionals Inc. (3652) AI Stock Analysis

• Market Cap: ¥7.47B
• Dividend Yield: N/A
• Average Volume (3M): 194.26K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.99
• Revenue Growth: -21.36%
• EPS Growth: -183.79%
• Country: JP
• Employees: 63
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): -30.33
• Shares Outstanding: 3,152,400
• 10 Day Avg. Volume: 37,040
• 30 Day Avg. Volume: 194,263
• PEG Ratio: -0.67
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 1.79
• P/FCF Ratio: 65.16
• 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: 59 Neutral
• Price Target: ¥2,478.00 ▲(9.50% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is primarily supported by solid financial stability (debt-free balance sheet) and continued profitability, but is held back by weaker technical conditions (below key moving averages with negative MACD) and unattractive valuation signals (negative P/E with no dividend yield provided).

Positive Factors

Debt-free Balance Sheet

A debt-free, equity-heavy balance sheet materially lowers financial risk and provides durable flexibility. This capital structure supports sustained R&D, hardware investment, and the ability to weather cyclicality without dependence on external financing.

Positive Free Cash Flow

Consistent positive operating and free cash flow demonstrates the business can self-fund operations and reinvest. Near-parity of FCF to net income implies cash earnings are backing reported profits, supporting durable capital allocation and operational continuity.

Return to Profitability & Revenue Momentum

Revenue growth and a return to profitability signal product-market fit and improving commercial traction. Sustained top-line momentum creates a foundation for margin recovery and longer-term earnings stability if cost structure is managed.

Negative Factors

Margin Compression

Material year-over-year margin erosion weakens earnings durability and increases leverage to cost inflation or pricing pressure. Lower margins mean the company needs higher revenue growth to sustain profits, heightening execution risk over the medium term.

Cash Conversion Volatility

Sharp deterioration in cash conversion and prior periods of negative OCF indicate earnings may not reliably convert to cash. This volatility constrains reinvestment, dividends, or buybacks and raises financing risk if operations tighten.

Modest Shareholder Returns

A very conservative capital structure yields low ROE, suggesting limited capital efficiency. While defensive, this constrains long-term shareholder returns absent stronger margin expansion or faster revenue growth, reducing investor upside potential.

Digital Media Professionals Inc. Business Overview & Revenue Model

Company Description

Digital Media Professionals Inc. engages in the intellectual property (IP) core license, product, and professional service business in Japan and internationally. The company licenses graphics processing units (GPU), and artificial intelligence (AI) related IP products; and develops and sells semiconductors and modules. It also offers low-load and high-precision license plate recognition software products; configurable AI inference processor IP, AI inference processor IP, and AI camera system small-size image signal processing IP hardware products. In addition, the company provides ZIA C3 SoM, a platform for developing edge devices equipped with AI functions; and ZIA Cloud SAFE, a SaaS type cloud service. Further, it offers professional services, such as safety driving assistance system development, system design, board development, and AI solutions; 3D and 2D graphics GPU hardware products; and image processors. The company was incorporated in 2002 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Digital Media Professionals Inc. generates revenue primarily through the licensing of its proprietary GPU and AI technologies to manufacturers and developers in the gaming, automotive, and industrial sectors. The company earns income from upfront licensing fees, royalties based on the volume of products sold using its technology, and service fees for customization and technical support. Strategic partnerships with semiconductor manufacturers and OEMs further bolster DMP's revenue streams by expanding the market reach and adoption of its solutions. Additionally, the company invests in research and development to maintain a competitive edge and explore new applications for its technologies, contributing to sustained business growth.

Digital Media Professionals Inc. Financial Statement Overview

Summary

Strong financial safety from a debt-free balance sheet (high balance sheet score), with revenue growth and current profitability. However, profitability quality is less consistent as margins compressed year-over-year and cash conversion weakened, reflecting more variability in earnings quality.

Income Statement

Revenue has expanded meaningfully over the period, with the latest annual revenue up about 5%. Profitability has improved versus the earlier loss years, and the company is currently profitable, but margins have weakened year-over-year: net margin fell to ~5.1% from ~11.0% and EBIT margin declined to ~7.4% from ~11.0%. Overall, the business shows solid top-line momentum and a return to profitability, but earnings quality looks less consistent due to the recent margin compression and prior volatility.

Balance Sheet

The balance sheet is very conservative with zero total debt and a 0.0 debt-to-equity ratio, which materially lowers financial risk. Equity is large relative to assets (equity ~3.61B vs assets ~4.09B in the latest year), supporting resilience. The trade-off is that shareholder returns are modest in the latest year (return on equity ~4.4%), down from the prior year’s stronger level (~9.6%).

Cash Flow

Cash generation is mixed. The latest year produced positive operating cash flow (~93M) and free cash flow (~85M), and free cash flow was close to net income (free cash flow to net income ~0.91), which is supportive. However, operating cash flow covered only about ~20% of net income in the latest year, a sharp drop from the prior year (coverage ~1.49), highlighting higher working-capital or cash conversion volatility; earlier years also included negative operating and free cash flow.

Breakdown	TTM	Mar 2025	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	2.74B	3.08B	3.02B	2.32B	1.67B	1.01B
Gross Profit	1.15B	1.32B	1.27B	860.67M	604.46M	335.15M
EBITDA	-5.48M	256.89M	371.77M	100.64M	-84.17M	-363.00M
Net Income	-143.19M	157.12M	331.27M	22.57M	-157.20M	-364.62M
Balance Sheet
Total Assets	3.74B	4.09B	3.92B	3.84B	3.47B	3.48B
Cash, Cash Equivalents and Short-Term Investments	2.59B	2.73B	2.90B	2.74B	2.30B	2.41B
Total Debt	0.00	0.00	0.00	0.00	0.00	0.00
Total Liabilities	365.48M	480.94M	461.95M	717.96M	376.70M	227.09M
Stockholders Equity	3.37B	3.61B	3.46B	3.12B	3.10B	3.25B
Cash Flow
Free Cash Flow	0.00	84.71M	633.70M	-73.30M	-77.40M	5.54M
Operating Cash Flow	0.00	93.25M	660.98M	-37.57M	-39.92M	36.36M
Investing Cash Flow	0.00	-167.11M	-500.03M	465.91M	-77.35M	68.62M
Financing Cash Flow	0.00	0.00	-291.00K	-108.00K	-90.00K	-1.51M

Digital Media Professionals Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2263.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3652, the sentiment is Positive. The current price of 2263 is above the 20-day moving average (MA) of 2230.20, below the 50-day MA of 2314.04, and above the 200-day MA of 2239.34, indicating a bullish trend. The MACD of -16.09 indicates Negative momentum. The RSI at 59.38 is Neutral, neither overbought nor oversold. The STOCH value of 84.73 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3652.

Digital Media Professionals Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6965	74 Outperform	¥625.35B	47.17	4.19%	2.25%	3.97%	-41.76%
2760	70 Outperform	¥113.08B	13.08	―	3.02%	-14.47%	-26.11%
4980	70 Outperform	¥443.63B	16.99	―	2.18%	-6.10%	-7.03%
7717	66 Neutral	¥45.06B	21.48	2.31%	2.67%	-7.95%	-34.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3652	59 Neutral	¥7.47B	-21.14	―	―	-21.36%	-183.79%
6740	45 Neutral	¥108.65B	-2.98	-217.94%	―	-31.80%	-117.36%