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

• Market Cap: ¥20.53B
• Dividend Yield: 2.21%
• Average Volume (3M): 84.67K
• Price to Earnings (P/E): 33.6
• Beta (1Y): 0.84
• Revenue Growth: 2.47%
• EPS Growth: 255.70%
• Country: JP
• Employees: 1,870
• Sector: Technology
• Sector Strength: 87
• Industry: Information Technology Services
• EPS (TTM): -33.22
• Shares Outstanding: 23,890,800
• 10 Day Avg. Volume: 65,430
• 30 Day Avg. Volume: 84,673
• PEG Ratio: -0.72
• Price to Book (P/B): 3.61
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.53
• 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: 67 Neutral
• 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. Business Overview & Revenue Model

Company Description

DIGITAL 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 Money

DIGITAL 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

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

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

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.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	40.54B	39.75B	38.79B	36.52B	29.18B	22.67B
Gross Profit	10.34B	10.14B	10.09B	10.63B	8.39B	6.43B
EBITDA	3.35B	2.70B	1.91B	3.18B	3.49B	1.92B
Net Income	1.62B	629.46M	176.93M	799.55M	1.78B	974.49M
Balance Sheet
Total Assets	19.91B	19.95B	21.10B	19.58B	17.57B	14.34B
Cash, Cash Equivalents and Short-Term Investments	7.21B	7.59B	6.90B	6.50B	5.24B	5.23B
Total Debt	4.80B	5.20B	7.10B	5.11B	5.59B	4.80B
Total Liabilities	10.15B	10.69B	12.25B	10.11B	9.99B	8.02B
Stockholders Equity	9.33B	8.95B	8.42B	8.81B	7.00B	5.70B
Cash Flow
Free Cash Flow	0.00	2.69B	946.83M	1.82B	2.70B	1.10B
Operating Cash Flow	0.00	3.12B	1.76B	2.85B	3.08B	1.42B
Investing Cash Flow	0.00	-147.41M	-2.37B	-1.90B	-2.54B	-1.81B
Financing Cash Flow	0.00	-2.41B	934.08M	141.47M	-546.57M	1.73B

DIGITAL HEARTS HOLDINGS Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 949.00
• 50DMA: Positive
• 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: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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6199	77 Outperform	¥22.15B	12.62		0.81%	10.07%	27.39%
2185	73 Outperform	¥19.51B	9.23		3.27%	4.16%	36.43%
6572	71 Outperform	¥21.33B	47.70		0.88%	17.17%	160.84%
3676	67 Neutral	¥20.53B	33.59		2.21%	2.47%	255.70%
3788	65 Neutral	¥23.15B	32.02		1.81%	7.60%	-6.99%
Sector *	63 Neutral	$34.07B	6.13	-11.73%	1.80%	5.33%	-18.31%
3657	54 Neutral	¥13.15B	―		4.30%	10.47%	63.47%

DIGITAL HEARTS HOLDINGS Co., Ltd. Corporate Events

DIGITAL HEARTS HOLDINGS Reports Growth in Fiscal Year 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

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.