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DIGITAL HEARTS HOLDINGS Co., Ltd. (JP:3676)
:3676
Japanese Market

DIGITAL HEARTS HOLDINGS Co., Ltd. (3676) AI Stock Analysis

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JP

DIGITAL HEARTS HOLDINGS Co., Ltd.

(3676)

Rating:67Neutral
Price Target:
¥999.00
▲(5.27%Upside)
The overall stock score of DIGITAL HEARTS HOLDINGS Co., Ltd. is 67.25, driven primarily by its strong financial performance, which indicates robust revenue growth and profitability. The technical analysis presents a neutral outlook with short-term positive signals, while the valuation suggests potential overvaluation risks. The absence of earnings call and corporate events data means these factors were not considered in this assessment.

DIGITAL HEARTS HOLDINGS Co., Ltd. (3676) vs. iShares MSCI Japan ETF (EWJ)

DIGITAL HEARTS HOLDINGS Co., Ltd. Business Overview & Revenue Model

Company DescriptionDIGITAL HEARTS HOLDINGS Co., Ltd. is a Japan-based company specializing in quality assurance and testing services primarily for the gaming and entertainment industries. The company operates through various segments, including game debugging services, IT services, and enterprise solutions, offering comprehensive support to ensure the reliability and performance of digital products. Through its subsidiaries, DIGITAL HEARTS provides testing and evaluation services that help developers and publishers enhance the quality of their software products, particularly in the fast-evolving gaming sector.
How the Company Makes MoneyDIGITAL HEARTS HOLDINGS Co., Ltd. generates revenue primarily through its quality assurance and testing services. The company's key revenue streams include game debugging services, where it provides comprehensive testing solutions to game developers and publishers to identify and resolve software issues before release. Additionally, the company offers IT services and enterprise solutions that extend beyond gaming to other digital products, supporting their functionality and performance. Revenue is also driven by strategic partnerships with gaming companies and software developers, establishing long-term contracts that ensure a steady stream of income. The company's focus on high-quality service delivery and leveraging its expertise in the gaming industry significantly contributes to its earnings.

DIGITAL HEARTS HOLDINGS Co., Ltd. Financial Statement Overview

Summary
DIGITAL HEARTS HOLDINGS Co., Ltd. exhibits strong financial performance with robust revenue growth, improving profitability margins, and a stable financial position. The company demonstrates sound cash flow generation, supporting its operations and growth strategies. While debt levels are notable, the equity ratio and cash flow capabilities mitigate potential risks.
Income Statement
85
Very Positive
DIGITAL HEARTS HOLDINGS Co., Ltd. has demonstrated robust revenue growth, with a revenue increase from ¥21.1 billion in 2020 to ¥39.7 billion in 2025. The gross profit margin remains healthy at around 25.5% in 2025, indicating efficient cost management. Net profit margin improved significantly, reaching 1.6% in 2025 from a low of 0.5% in 2024, showcasing enhanced profitability. EBIT and EBITDA margins have also shown positive trends, suggesting strong operational performance.
Balance Sheet
78
Positive
The company maintains a strong equity base with a debt-to-equity ratio of 0.58 in 2025, reflecting a balanced capital structure. ROE improved to 7.03% in 2025, demonstrating effective use of equity capital. The equity ratio stands at 44.9%, indicating a solid financial position with a substantial portion of assets financed by equity, reducing financial risk. However, the total debt level remains significant, which could pose potential risks if not managed carefully.
Cash Flow
82
Very Positive
The operating cash flow to net income ratio is robust, indicating strong cash generation relative to net income. Free cash flow has grown steadily, with a significant increase in free cash flow from ¥829 million in 2020 to ¥2.69 billion in 2025. The free cash flow to net income ratio is favorable, suggesting efficient conversion of profits to cash flows. Overall, the company's cash flow management appears effective, supporting its operational and strategic needs.
BreakdownTTMMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue40.54B39.75B38.79B36.52B29.18B22.67B
Gross Profit10.34B10.14B10.09B10.63B8.39B6.43B
EBITDA3.35B2.70B1.91B3.18B3.49B1.92B
Net Income1.62B629.46M176.93M799.55M1.78B974.49M
Balance Sheet
Total Assets19.91B19.95B21.10B19.58B17.57B14.34B
Cash, Cash Equivalents and Short-Term Investments7.21B7.59B6.90B6.50B5.24B5.23B
Total Debt4.80B5.20B7.10B5.11B5.59B4.80B
Total Liabilities10.15B10.69B12.25B10.11B9.99B8.02B
Stockholders Equity9.33B8.95B8.42B8.81B7.00B5.70B
Cash Flow
Free Cash Flow0.002.69B946.83M1.82B2.70B1.10B
Operating Cash Flow0.003.12B1.76B2.85B3.08B1.42B
Investing Cash Flow0.00-147.41M-2.37B-1.90B-2.54B-1.81B
Financing Cash Flow0.00-2.41B934.08M141.47M-546.57M1.73B

DIGITAL HEARTS HOLDINGS Co., Ltd. Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price949.00
Price Trends
50DMA
938.04
Positive
100DMA
978.76
Negative
200DMA
896.25
Positive
Market Momentum
MACD
11.78
Positive
RSI
48.92
Neutral
STOCH
13.32
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3676, the sentiment is Neutral. The current price of 949 is below the 20-day moving average (MA) of 955.30, above the 50-day MA of 938.04, and above the 200-day MA of 896.25, indicating a neutral trend. The MACD of 11.78 indicates Positive momentum. The RSI at 48.92 is Neutral, neither overbought nor oversold. The STOCH value of 13.32 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3676.

DIGITAL HEARTS HOLDINGS Co., Ltd. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
¥22.15B12.62
0.81%10.07%27.39%
73
Outperform
¥19.51B9.23
3.27%4.16%36.43%
71
Outperform
¥21.33B47.70
0.88%17.17%160.84%
67
Neutral
¥20.53B33.59
2.21%2.47%255.70%
65
Neutral
¥23.15B32.02
1.81%7.60%-6.99%
63
Neutral
$34.07B6.13-11.73%1.80%5.33%-18.31%
54
Neutral
¥13.15B
4.30%10.47%63.47%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:3676
DIGITAL HEARTS HOLDINGS Co., Ltd.
949.00
-132.31
-12.24%
JP:2185
CMC Corporation
1,467.00
266.82
22.23%
JP:3657
Pole To Win Holdings.Inc.
372.00
-101.48
-21.43%
JP:3788
GMO GlobalSign Holdings K.K.
2,010.00
-905.70
-31.06%
JP:6199
SERAKU Co., Ltd.
1,601.00
316.06
24.60%
JP:6572
RPA Holdings, Inc.
341.00
80.09
30.70%

DIGITAL HEARTS HOLDINGS Co., Ltd. Corporate Events

DIGITAL HEARTS HOLDINGS Reports Growth in Fiscal Year 2025
May 13, 2025

DIGITAL HEARTS HOLDINGS Co., Ltd. reported a 2.5% increase in net sales for the fiscal year ending March 31, 2025, with significant growth in operating income and profit attributable to owners of the parent. The company’s financial position improved with a higher shareholders’ equity ratio and increased cash and cash equivalents. The announcement reflects a positive impact on the company’s operations, showcasing resilience and strategic growth, which could enhance its industry positioning and offer favorable implications for stakeholders.

DIGITAL HEARTS HOLDINGS Reports Significant Extraordinary Losses
May 13, 2025

DIGITAL HEARTS HOLDINGS Co., Ltd. reported an extraordinary loss of 1,184 million yen due to a significant decline in the value of its investment securities. This loss impacted the company’s financial results for the fiscal year ending March 31, 2025, leading to a substantial shortfall in profit attributable to owners of the parent. Despite steady project acquisition by its business groups, the company’s net income fell significantly compared to forecasts and the previous fiscal year, primarily due to these extraordinary losses.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 18, 2025