Digital Media Professionals Inc. (3652) AI Stock Analysis

• Market Cap: ¥6.90B
• Dividend Yield: N/A
• Average Volume (3M): 194.26K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.03
• 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: ¥2,461.00 ▲(8.75% 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 zero-debt balance sheet materially lowers financial risk and provides durable financial flexibility. Over a multi-month horizon this supports R&D spend, absorbing revenue volatility, opportunistic investment or M&A, and reduced refinancing risk versus peers with leverage.

Revenue Momentum and Profitability

Sustained top-line expansion and a return to profitability indicate product-market fit and improved operating leverage. Over the next several months this trend supports reinvestment in core products and durability of cash profits if revenue growth sustains.

Positive Free Cash Flow

Consistent positive free cash flow and FCF near net income (~0.91) demonstrate the business can generate internal funding for operations and capex. That cash generation enhances resilience and optionality for strategic actions over the medium term.

Negative Factors

Margin Compression

Material year-over-year margin erosion weakens the company's ability to convert revenue into durable profits. If margins remain compressed, it limits reinvestment, reduces buffer against cost inflation, and makes earnings more sensitive to revenue swings over months.

Cash Conversion Volatility

A sharp drop in cash coverage signals working-capital strain or weaker cash quality of earnings. Persistent cash conversion volatility can force reliance on balance-sheet buffers, delay investment, and raise execution risk for growth initiatives in the medium term.

Recent Revenue Decline

A negative recent revenue growth rate indicates short-term demand softness or cyclicality that could persist. Declining top-line trends reduce scalability of fixed costs and could exacerbate margin pressure and earnings volatility across the coming quarters.

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.

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	1.31B	1.26B	853.98M	600.75M	332.25M
EBITDA	-17.87M	293.26M	369.87M	98.88M	-54.84M	-361.60M
Net Income	-142.59M	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	462.78M	718.99M	377.54M	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	634.94M	-67.15M	-54.40M	11.26M
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: Negative
• Last Price: 2263.00
• 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:3652, the sentiment is Negative. The current price of 2263 is below the 20-day moving average (MA) of 2270.35, below the 50-day MA of 2296.26, and above the 200-day MA of 2233.71, indicating a bearish trend. The MACD of -10.12 indicates Positive momentum. The RSI at 44.12 is Neutral, neither overbought nor oversold. The STOCH value of 27.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
7717	76 Outperform	¥44.87B	4.58	6.12%	2.67%	-7.95%	-34.83%
6965	74 Outperform	¥589.35B	44.29	4.03%	2.25%	3.97%	-41.76%
2760	70 Outperform	¥95.85B	10.19	―	3.02%	-14.47%	-26.11%
4980	70 Outperform	¥394.00B	14.11	―	2.18%	-6.10%	-7.03%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3652	59 Neutral	¥6.90B	-19.45	―	―	-21.36%	-183.79%
6740	42 Neutral	¥368.64B	-6.12	-217.94%	―	-31.80%	-117.36%