DIGITAL PLUS, Inc. (3691) AI Stock Analysis

• Market Cap: ¥6.71B
• Dividend Yield: N/A
• Average Volume (3M): 65.64K
• Price to Earnings (P/E): 141.1
• Beta (1Y): 0.71
• 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: 44 Neutral
• Price Target: ¥1,430.00 ▲(3.40% Upside)
• Action: Reiterated Date: 03/05/26
• Date: Action: Reiterated 03/05/26

The score is held down primarily by weak financial quality—losses, significant operating/free-cash-flow burn, and higher leverage—despite solid revenue growth and high gross margins. Technical indicators are neutral-to-mixed and do not offset fundamentals, while the very high P/E further limits the overall score.

Positive Factors

Revenue Growth Momentum

Sustained double-digit top-line growth demonstrates persistent customer demand and effective go-to-market execution. Over 2–6 months this underpins scale benefits for SaaS offerings, supports further product investment, and provides a runway to improve operating leverage if cost trends normalize.

High Gross Margin

A ~75% gross margin signals strong pricing power and scalable software economics. That structural margin advantage gives room to fund R&D, sales, and marketing long-term, enabling profitable unit economics once fixed costs and cash burn are addressed and supporting durable competitive positioning.

Diversified SaaS and Services Revenue

Multiple revenue streams—subscription SaaS, consulting, partner arrangements and performance fees—reduce concentration risk and create cross-sell/up-sell pathways. This structural diversification improves resiliency across cycles and helps stabilize recurring revenue as services scale.

Negative Factors

Severe Cash Burn

Deeply negative operating and free cash flow indicate persistent cash consumption from operations and working capital. Over months this heightens reliance on external financing, constrains organic reinvestment, and raises solvency risk if revenue or margin recovery stalls.

Elevated Leverage

Rising debt-to-equity reduces financial flexibility and increases interest and refinancing exposure. If cash generation doesn't improve, higher leverage can force prioritization of debt service over strategic spending, limiting the company’s ability to execute long-term growth initiatives.

Return to Losses

A shift from profit to negative net margin and ROE reflects deteriorating earnings quality and cost-management challenges. Sustained losses erode equity cushions, reduce retained-capital availability for growth, and increase the probability of dilutive or costly external funding over the medium term.

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 is strong and gross margin remains high, but profitability has deteriorated into losses (negative net margin) and cash generation is very weak with deeply negative operating and free cash flow. Leverage has also risen (debt-to-equity ~1.6), reducing financial flexibility.

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	674.07M	475.41M	571.79M	228.06M
EBITDA	83.83M	-484.00K	37.83M	-148.37M	101.03M	-64.05M
Net Income	-48.30M	-71.25M	21.17M	-277.02M	-201.92M	33.39M
Balance Sheet
Total Assets	3.49B	3.33B	2.34B	1.69B	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	1.16B	835.37M	457.15M
Stockholders Equity	860.15M	843.18M	720.28M	490.33M	781.91M	840.96M
Cash Flow
Free Cash Flow	-629.92M	-458.38M	-17.45M	-229.62M	69.16M	83.16M
Operating Cash Flow	-620.34M	-445.13M	-17.13M	-229.19M	71.01M	83.16M
Investing Cash Flow	58.99M	46.66M	-167.40M	-381.60M	169.13M	-482.90M
Financing Cash Flow	814.83M	709.84M	540.54M	131.82M	279.29M	-84.58M

DIGITAL PLUS, Inc. Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3691, the sentiment is Neutral. The current price of 1383 is below the 20-day moving average (MA) of 1553.20, below the 50-day MA of 1587.12, and above the 200-day MA of 1327.75, indicating a neutral trend. The MACD of -14.39 indicates Positive momentum. The RSI at 46.08 is Neutral, neither overbought nor oversold. The STOCH value of 33.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	¥29.37B	12.43	―	0.38%	18.02%	46.43%
6180	75 Outperform	¥7.66B	15.62	―	3.29%	7.47%	55.61%
6185	64 Neutral	¥5.69B	24.73	―	―	8.77%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6562	60 Neutral	¥11.63B	10.90	―	―	33.34%	-25.08%
2489	57 Neutral	¥10.52B	40.80	―	1.09%	-5.70%	-215.73%
3691	44 Neutral	¥6.71B	141.08	―	―	11.29%	-358.08%