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

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JP:3676

DIGITAL HEARTS HOLDINGS Co., Ltd.

(3676)

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Outperform 73 (OpenAI - 4o)
Rating:73Outperform
Price Target:
¥1,085.00
▲(10.26% Upside)
DIGITAL HEARTS HOLDINGS Co., Ltd. scores well due to its strong financial performance, characterized by revenue growth and profitability improvements. The technical analysis indicates neutral momentum, while the valuation suggests a moderate price level with a reasonable dividend yield. The absence of earnings call data and corporate events does not impact the overall score.

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., together with its subsidiaries, engages in debugging, media, and other businesses. It provides debug testing and reporting services for consumer games, mobile and online games, arcade games, etc.; one-stop solutions, such as translation, LQA, and marketing support for game makers to develop overseas markets; and support services in the creating of content, including game development and CG video creation, etc. The company also operates 4Gamer.net, a website for distributing information about computer games and online games, and hardware; and publishes news, as well as distributes movies, free trials, weekly publications, and other content. In addition, it offers testing services for IT-related software, including websites and operations systems; solutions for the development of AI application and testing automation; and security services. Further, the company provides various IT services, such as system development, maintenance, and operation support for IT systems. The company was formerly known as Hearts United Group Co., Ltd. and changed its name to DIGITAL HEARTS HOLDINGS Co., Ltd. in July 2018. DIGITAL HEARTS HOLDINGS Co., Ltd. was founded in 2001 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyThe company generates revenue primarily through providing quality assurance services, including debugging and testing for video games and other digital content. DIGITAL HEARTS HOLDINGS Co., Ltd. charges clients for its testing and debugging services, which are essential for ensuring the quality and functionality of digital products before they reach the market. Additionally, the company offers localization services, helping clients adapt their products for different languages and cultural contexts, further expanding their market reach. Partnerships with major gaming companies and continuous demand for high-quality digital content are significant factors contributing to the company's earnings.

DIGITAL HEARTS HOLDINGS Co., Ltd. Financial Statement Overview

Summary
DIGITAL HEARTS HOLDINGS Co., Ltd. exhibits strong financial performance with consistent revenue growth, improving profitability margins, and a stable financial position. The company demonstrates sound cash flow generation, supporting its operations and growth strategies. While there is notable debt on the balance sheet, the company's 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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue39.29B39.75B38.79B36.52B29.18B22.67B
Gross Profit10.32B10.14B10.09B10.63B8.39B6.43B
EBITDA3.08B2.70B1.91B3.18B3.49B1.92B
Net Income881.41M629.46M176.93M799.55M1.78B974.49M
Balance Sheet
Total Assets19.71B19.95B21.10B19.58B17.57B14.34B
Cash, Cash Equivalents and Short-Term Investments7.22B7.59B6.90B6.50B5.24B5.23B
Total Debt5.39B5.20B7.10B5.11B5.59B4.80B
Total Liabilities10.45B10.69B12.25B10.11B9.99B8.02B
Stockholders Equity8.97B8.95B8.42B8.81B7.00B5.70B
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
Positive
Last Price984.00
Price Trends
50DMA
962.92
Positive
100DMA
951.11
Positive
200DMA
942.47
Positive
Market Momentum
MACD
-0.17
Negative
RSI
55.39
Neutral
STOCH
50.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3676, the sentiment is Positive. The current price of 984 is above the 20-day moving average (MA) of 963.17, above the 50-day MA of 962.92, and above the 200-day MA of 942.47, indicating a bullish trend. The MACD of -0.17 indicates Negative momentum. The RSI at 55.39 is Neutral, neither overbought nor oversold. The STOCH value of 50.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3676.

DIGITAL HEARTS HOLDINGS Co., Ltd. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
¥20.97B12.060.87%11.50%11.23%
78
Outperform
¥21.50B10.033.21%-1.95%34.62%
73
Outperform
¥20.12B23.512.26%-0.09%1653.62%
69
Neutral
¥24.42B32.031.63%5.38%-8.86%
61
Neutral
$37.18B12.37-10.20%1.83%8.50%-7.62%
60
Neutral
¥20.95B45.671.71%13.47%296.94%
50
Neutral
¥11.77B4.72%7.53%49.93%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:3676
DIGITAL HEARTS HOLDINGS Co., Ltd.
984.00
196.97
25.03%
JP:2185
CMC Corporation
1,632.00
493.64
43.36%
JP:3657
Pole To Win Holdings.Inc.
335.00
-92.50
-21.64%
JP:3788
GMO GlobalSign Holdings K.K.
2,245.00
-431.61
-16.13%
JP:6199
SERAKU Co., Ltd.
1,536.00
290.30
23.30%
JP:6572
RPA Holdings, Inc.
341.00
147.25
76.00%

DIGITAL HEARTS HOLDINGS Co., Ltd. Corporate Events

DIGITAL HEARTS HOLDINGS Announces Capital Reduction for Subsidiary AGEST
Sep 26, 2025

DIGITAL HEARTS HOLDINGS Co., Ltd. has announced a planned reduction in the stated capital of its subsidiary, AGEST, Inc., from 100 million yen to 10 million yen. This move is aimed at enhancing financial flexibility and is part of the company’s broader financial and tax strategies. The capital reduction will not affect the number of shares or net assets of AGEST and is expected to have no impact on the consolidated business results of DIGITAL HEARTS HOLDINGS.

The most recent analyst rating on (JP:3676) stock is a Buy with a Yen1074.00 price target. To see the full list of analyst forecasts on DIGITAL HEARTS HOLDINGS Co., Ltd. stock, see the JP:3676 Stock Forecast page.

DIGITAL HEARTS HOLDINGS Reports Strong Profit Growth Amid Decline in Sales
Aug 7, 2025

DIGITAL HEARTS HOLDINGS Co., Ltd. reported its consolidated financial results for the first quarter ending June 30, 2025, showing a slight decline in net sales by 4.6% compared to the previous year. However, the company experienced significant growth in operating income, ordinary income, and profit attributable to owners of the parent, with increases of 139.2%, 124.0%, and 119.0% respectively. This improvement in profitability suggests a strong operational performance despite the decrease in sales, potentially strengthening the company’s position in the market.

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: Oct 22, 2025