DIGITAL PLUS, Inc. (3691) AI Stock Analysis

• Market Cap: ¥7.30B
• Dividend Yield: N/A
• Average Volume (3M): 65.64K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.68
• Revenue Growth: 11.29%
• EPS Growth: -358.08%
• Country: JP
• Employees: 33
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 2.45
• Shares Outstanding: 4,458,067
• 10 Day Avg. Volume: 51,650
• 30 Day Avg. Volume: 65,643
• PEG Ratio: 0.19
• Price to Book (P/B): 6.35
• Price to Sales (P/S): 5.74
• P/FCF Ratio: -11.69
• 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: 42 Neutral
• Price Target: ¥1,462.00 ▲(5.71% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily held down by weak financial quality: losses, significant operating/free-cash-flow burn, and higher leverage. Technicals are mixed but lean soft in the near term, while valuation is difficult to support due to a negative P/E and no dividend yield data.

Positive Factors

Recurring SaaS & diversified revenue

A multi-stream model anchored by SaaS subscriptions creates durable recurring revenue and predictable renewal dynamics. Consulting, partnerships and performance fees broaden client touchpoints, supporting cross-sell and retention that underpin steady top-line durability over coming quarters.

Consistent revenue growth

Sustained mid-teens and double-digit TTM growth indicates ongoing demand for the company's digital solutions. Continued top-line expansion provides the base to scale fixed costs, improve operating leverage, and fund product investment without relying solely on external financing.

High gross margins and positive EBITDA

Very high gross margins reflect a software-centric, scalable cost structure; positive EBITDA shows operating fundamentals can be profitable at the EBITDA line. This mix supports long-term margin recovery if revenue growth is maintained and overhead is controlled.

Negative Factors

Deep operating cash burn

Material negative OCF and FCF signal the business is consuming significant cash to run operations and growth. That persistent cash burn increases reliance on financing, constrains capital allocation, and creates runway risk unless operating cash conversion improves.

Elevated leverage

Rising debt-to-equity reduces financial flexibility and raises refinancing and interest-cost sensitivity. With negative cash flow and weakened profitability, higher leverage increases default and covenant risk and limits the company's ability to invest during a recovery period.

Reversal to net losses

A shift from profitability to negative net margins and negative ROE erodes internal capital generation and shareholder returns. Sustained losses may force cost cuts, dilution, or strategic shifts, undermining the firm's ability to fund growth and improve margins organically.

DIGITAL PLUS, Inc. Business Overview & Revenue Model

Company Description

DIGITAL PLUS, Inc. engages in the digital marketing and fintech businesses in Japan. The company offers internet advertising agency, consulting services, alliance media services, digital wallet exchange services, and media management consulting services; and web media marketing support services, including advertising placement, advertisement production, and various content creation services. It also offers Digital Gift, a contactless marketing support tool; Q-Kyu, a salary advance payment service; Mahina, a fortune-telling consultation; Peace, an online tutoring service. The company was formerly known as REALWORLD, inc. and changed its name to DIGITAL PLUS, Inc. in April 2022. DIGITAL PLUS, Inc. was incorporated in 2005 and is headquartered in Tokyo, Japan.

How the Company Makes Money

DIGITAL PLUS, Inc. generates revenue through multiple streams primarily by providing software-as-a-service (SaaS) solutions to businesses, which includes subscription fees for access to their digital platforms. Additional revenue comes from consulting services focused on digital transformation, where the company assists clients in implementing technology-driven strategies. The company also earns income through strategic partnerships with other tech firms, allowing for cross-promotional opportunities and shared revenue models. Furthermore, it engages in performance-based marketing initiatives, where it receives commissions or fees based on the success of digital marketing campaigns it manages for clients.

DIGITAL PLUS, Inc. Financial Statement Overview

Summary

Revenue growth remains solid and gross margins are high, but profitability has deteriorated into losses and cash flow is materially negative. Elevated leverage (debt-to-equity ~1.6) combined with deep negative operating/free cash flow is the primary financial risk.

Income Statement

Top-line momentum is a clear positive: revenue rose strongly in TTM (Trailing-Twelve-Months) (+10.2%) and has grown materially versus prior years. Profitability, however, has weakened meaningfully from 2024 (profitable) to losses in the latest periods: TTM (Trailing-Twelve-Months) net margin is negative (~-7.6%) with slightly negative EBIT, even though gross margin remains high (~75.7%) and EBITDA margin is modestly positive (~5.0%). Overall, the business shows demand resilience, but earnings quality and cost control are currently the key concern.

Balance Sheet

Leverage has increased: total debt is high relative to equity (debt-to-equity ~1.61 in both TTM (Trailing-Twelve-Months) and the latest annual), up from ~1.09 in 2024 and below 1.0 in 2023. Equity is still positive, but returns to shareholders are negative in the latest periods (TTM (Trailing-Twelve-Months) return on equity ~-8.7%), reflecting the shift back to losses. The balance sheet is not distressed on assets/equity alone, but the higher leverage reduces flexibility if profitability and cash generation do not recover.

Cash Flow

Cash generation is the weakest area. Operating cash flow is deeply negative in TTM (Trailing-Twelve-Months) (-620M) and free cash flow is also sharply negative (-630M), worse than recent annual periods, indicating cash burn despite only mid-single-digit EBITDA margins. While free cash flow growth is shown as positive in TTM (Trailing-Twelve-Months), the absolute level remains materially negative, and negative operating cash flow suggests working-capital/operating funding pressure that likely increases reliance on financing.

Breakdown	TTM	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	1.03B	933.13M	838.50M	665.46M	623.88M	303.22M
Gross Profit	781.23M	697.87M	714.10M	566.98M	594.55M	297.29M
EBITDA	83.83M	52.63M	137.45M	-165.59M	-125.21M	46.88M
Net Income	-48.30M	-71.25M	21.17M	-289.15M	-201.92M	33.39M
Balance Sheet
Total Assets	3.49B	3.33B	2.34B	1.68B	1.62B	1.30B
Cash, Cash Equivalents and Short-Term Investments	840.66M	1.11B	801.22M	444.77M	921.17M	601.74M
Total Debt	1.43B	1.36B	781.74M	478.52M	279.94M	237.98M
Total Liabilities	2.55B	2.41B	1.52B	1.15B	835.37M	457.15M
Stockholders Equity	860.15M	843.18M	720.28M	491.86M	781.91M	840.96M
Cash Flow
Free Cash Flow	-629.92M	-458.38M	-100.03M	-276.43M	32.65M	62.97M
Operating Cash Flow	-620.34M	-445.13M	-17.13M	-229.19M	71.01M	83.16M
Investing Cash Flow	58.99M	46.66M	-167.40M	-383.07M	169.13M	-482.90M
Financing Cash Flow	814.83M	709.84M	540.54M	133.29M	279.29M	-84.58M

DIGITAL PLUS, Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1383.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3691, the sentiment is Positive. The current price of 1383 is below the 20-day moving average (MA) of 1561.50, below the 50-day MA of 1565.58, and above the 200-day MA of 1285.73, indicating a bullish trend. The MACD of 8.00 indicates Negative momentum. The RSI at 55.68 is Neutral, neither overbought nor oversold. The STOCH value of 90.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3691.

DIGITAL PLUS, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3922	77 Outperform	¥31.37B	15.15	―	0.38%	18.02%	46.43%
6180	75 Outperform	¥7.66B	12.37	―	3.29%	7.47%	55.61%
6185	64 Neutral	¥6.25B	13.22	―	―	8.77%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6562	60 Neutral	¥12.19B	13.47	―	―	33.34%	-25.08%
2489	57 Neutral	¥10.80B	44.82	―	1.09%	-5.70%	-215.73%
3691	42 Neutral	¥7.30B	-144.09	―	―	11.29%	-358.08%