DLE, Inc. (3686) AI Stock Analysis

• Market Cap: ¥4.87B
• Dividend Yield: N/A
• Average Volume (3M): 160.13K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.03
• Revenue Growth: -2.84%
• EPS Growth: 36.23%
• Country: JP
• Employees: 125
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): -0.74
• 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: -12.34
• 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: 46 Neutral
• Price Target: ¥110.00 ▼(-15.38% Downside)
• Action: Reiterated Date: 12/25/25
• Date: Action: Reiterated 12/25/25

The score is primarily held down by weak financial performance: persistent losses, negative operating metrics, and negative operating/free cash flow outweigh the benefit of low leverage. Technicals are only moderately supportive with neutral RSI and improving short-term trend, while valuation remains challenged due to the negative P/E and lack of dividend data.

Positive Factors

Low Leverage / Strong Capital Structure

A low debt-to-equity ratio and high equity ratio give DLE durable financial flexibility, lowering refinancing and interest risks. This structural strength supports continued investment in content and operations while absorbing short-term losses without immediate solvency pressure.

Recent Revenue Recovery

A meaningful year-over-year revenue rise indicates recovering demand or successful commercial initiatives, which can be sustained through distribution and content monetization. Continued top-line growth enhances scale potential and creates a path to improve operating leverage over coming quarters.

Improving Free Cash Flow Trend

A slight improvement in free cash flow, even from negative levels, signals early progress reducing cash burn. If this trend continues, it materially reduces financing needs and strengthens liquidity, allowing more reinvestment in high-return content and product initiatives.

Negative Factors

Persistent Net Losses and Negative Margins

Sustained negative EBIT/EBITDA and net losses erode retained capital and impair the firm’s ability to self-fund growth. Over months this weakens return metrics, limits reinvestment capacity, and forces reliance on external capital unless margins are structurally improved.

Negative Operating and Free Cash Flow

Ongoing negative operating and free cash flow create persistent cash burn that increases liquidity risk and dependence on external financing. This constrains strategic flexibility, forces prioritization of projects, and raises long-term sustainability concerns unless cash conversion reverses.

Volatile Top-Line Trend

Fluctuating revenue growth and inconsistent top-line trends make forecasting and margin recovery difficult. Structural unpredictability in sales or content monetization reduces visibility for investors and management, complicating capital allocation and long-term planning.

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.

DLE, Inc. Financial Statement Overview

Summary

Despite a recent revenue increase (+16.03% from 2024 to 2025) and low leverage, the company continues to post net losses with negative EBIT/EBITDA margins and negative operating/free cash flow, indicating weak profitability and ongoing cash burn.

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	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2021
Income Statement
Total Revenue	1.82B	1.98B	1.71B	2.02B	1.64B	1.12B
Gross Profit	743.78M	745.33M	493.61M	596.34M	566.82M	435.78M
EBITDA	-407.19M	-413.48M	-608.21M	-286.90M	-195.57M	-476.62M
Net Income	-368.11M	-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	688.69M	770.20M	744.90M	398.99M	415.38M	508.87M
Stockholders Equity	1.58B	1.81B	2.81B	2.67B	3.14B	3.37B
Cash Flow
Free Cash Flow	0.00	-437.65M	-341.68M	-397.24M	-236.05M	-464.65M
Operating Cash Flow	0.00	-432.74M	-335.80M	-393.92M	-234.66M	-458.53M
Investing Cash Flow	0.00	15.75M	6.01M	-191.41M	-205.32M	-729.44M
Financing Cash Flow	0.00	24.00M	-11.71M	-20.20M	-71.72M	-159.34M

DLE, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 130.00
• 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:3686, the sentiment is Negative. The current price of 130 is above the 20-day moving average (MA) of 119.00, above the 50-day MA of 123.34, and below the 200-day MA of 135.01, indicating a bearish trend. The MACD of -2.81 indicates Positive momentum. The RSI at 40.10 is Neutral, neither overbought nor oversold. The STOCH value of 25.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3686.

DLE, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5032	77 Outperform	¥195.47B	16.53	―	1.17%	53.21%	65.83%
9605	75 Outperform	¥411.05B	15.93	―	0.33%	6.38%	38.69%
9602	69 Neutral	¥1.41T	28.41	11.19%	1.12%	10.99%	2.35%
4816	66 Neutral	¥527.26B	28.18	―	1.12%	5.90%	17.39%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3791	59 Neutral	¥26.03B	124.21	―	1.11%	-4.66%	-56.66%
3686	46 Neutral	¥4.87B	-42.70	―	―	-2.84%	36.23%