DLE, Inc. (3686) AI Stock Analysis

• Market Cap: ¥5.39B
• Dividend Yield: N/A
• Average Volume (3M): 160.13K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.02
• Revenue Growth: -2.84%
• EPS Growth: 36.23%
• Country: JP
• Employees: 125
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): N/A
• Shares Outstanding: 43,448,440
• 10 Day Avg. Volume: 146,490
• 30 Day Avg. Volume: 160,126
• PEG Ratio: -0.25
• Price to Book (P/B): 2.98
• Price to Sales (P/S): 2.73
• P/FCF Ratio: -12.31
• 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: Moderate Sell
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 41 Neutral
• Price Target: ¥102.00 ▼(-4.67% Downside)

DLE, Inc. is facing significant financial and operational challenges, as evidenced by its negative profitability and cash flow issues. The technical indicators suggest a bearish trend, with the stock trading below key moving averages and approaching oversold conditions. The negative P/E ratio further highlights valuation concerns. Overall, the stock's score reflects the need for strategic improvements to address these challenges.

Positive Factors

Revenue Growth

The recent revenue growth indicates potential market expansion and increased demand for DLE, Inc.'s digital content and services, which could enhance long-term business prospects.

Strong Equity Position

A strong equity position with low leverage provides financial stability and flexibility, allowing DLE, Inc. to invest in growth opportunities and weather economic downturns.

Partnerships with Tech Companies

Strategic partnerships with tech companies bolster DLE, Inc.'s product offerings and competitive position, potentially driving sustained revenue growth and market share gains.

Negative Factors

Negative Cash Flow

Persistent negative cash flow challenges DLE, Inc.'s ability to fund operations and growth initiatives, posing risks to financial stability and long-term viability.

Operational Inefficiencies

Operational inefficiencies reflected in negative margins suggest that DLE, Inc. needs to optimize its operations to improve profitability and sustain its business model.

Consistent Net Losses

Ongoing net losses undermine DLE, Inc.'s financial health, limiting reinvestment capacity and potentially affecting investor confidence and market valuation.

DLE, Inc. Business Overview & Revenue Model

Company Description

DLE Inc. engages in the entertainment business in Japan. The company's activities include animation, live entertainment, music, mobile app and game development, and event planning; production management, concept designing, and other activities; and marketing solutions. It is also involved in the movies and television, and fashion businesses; and operation of in-house studios. The company was formerly known as Pasania, Ltd. and changed its name to DLE Inc. in October 2003. DLE Inc. was founded in 2001 and is based in Tokyo, Japan. DLE Inc. operates as a subsidiary of Asahi Broadcasting Group Holdings Corporation.

How the Company Makes Money

DLE, Inc. generates revenue through multiple streams, primarily by offering subscription-based software services and cloud solutions to businesses. The company charges clients a recurring fee for access to its software applications, which often include features such as data analytics, customer relationship management, and enterprise resource planning. Additionally, DLE, Inc. earns income through consulting services that help organizations integrate and optimize their technology solutions. Significant partnerships with other tech firms and service providers enhance its product offerings and broaden its market reach, contributing to its overall earnings. The company also explores opportunities in licensing its technology to third parties, further diversifying its revenue sources.

DLE, Inc. Financial Statement Overview

Summary

DLE, Inc. faces significant financial challenges, with consistent losses impacting profitability and cash flow. Despite a strong equity position with low leverage, negative margins and cash flow issues suggest operational inefficiencies. Strategic changes are needed to improve financial health and ensure long-term viability.

Income Statement

DLE, Inc. has experienced fluctuating revenue growth with a recent increase of 16.03% from 2024 to 2025. However, the company consistently reports negative net income, resulting in a negative net profit margin. The gross profit margin has remained relatively stable, but negative EBIT and EBITDA margins indicate operational challenges and inefficiencies.

Balance Sheet

The company's debt-to-equity ratio is low, indicating limited leverage and a strong equity base. However, the return on equity is negative due to persistent net losses. The equity ratio is high, reflecting a strong capital structure, but the continuous losses may pose long-term sustainability concerns.

Cash Flow

DLE, Inc. has negative operating and free cash flows, indicating cash burn issues. The free cash flow has slightly improved from the previous year, but the operating cash flow to net income ratio remains negative, highlighting cash flow challenges. The company needs to address these issues to ensure financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.82B	1.98B	1.71B	2.02B	1.64B	1.12B
Gross Profit	703.79M	745.33M	493.61M	596.34M	566.82M	435.78M
EBITDA	-461.86M	-676.42M	-544.07M	-499.32M	-194.18M	-607.16M
Net Income	-399.45M	-728.50M	-562.13M	-582.32M	-315.16M	-514.51M
Balance Sheet
Total Assets	2.30B	2.63B	3.62B	3.18B	3.58B	3.89B
Cash, Cash Equivalents and Short-Term Investments	1.25B	587.87M	1.01B	1.42B	2.08B	2.59B
Total Debt	29.00M	25.00M	1.00M	12.71M	63.02M	138.34M
Total Liabilities	690.00M	770.20M	672.63M	398.99M	415.38M	508.87M
Stockholders Equity	1.58B	1.81B	2.85B	2.67B	3.14B	3.37B
Cash Flow
Free Cash Flow	0.00	-438.52M	-466.15M	-489.19M	-270.73M	-529.57M
Operating Cash Flow	0.00	-433.61M	-418.41M	-434.51M	-240.94M	-458.53M
Investing Cash Flow	0.00	15.75M	6.01M	-222.52M	-209.39M	-736.52M
Financing Cash Flow	0.00	24.00M	-11.71M	10.00M	-67.65M	-152.26M

DLE, Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 107.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3686, the sentiment is Neutral. The current price of 107 is below the 20-day moving average (MA) of 120.60, below the 50-day MA of 128.38, and below the 200-day MA of 136.78, indicating a bearish trend. The MACD of -4.16 indicates Positive momentum. The RSI at 42.82 is Neutral, neither overbought nor oversold. The STOCH value of 19.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3686.

DLE, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4317	79 Outperform	¥10.00B	8.32	―	2.32%	4.44%	29.38%
4308	67 Neutral	¥8.85B	17.56	―	3.77%	2.87%	27.30%
3929	63 Neutral	¥3.18B	16.76	―	―	-0.97%	-29.96%
4347	63 Neutral	¥11.70B	20.51	―	2.30%	0.16%	116.15%
4772	62 Neutral	¥13.44B	15.48	―	0.95%	8.13%	275.53%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3686	41 Neutral	¥5.39B	-14.32	―	―	-2.84%	36.23%