DIGITAL PLUS, Inc. (3691) AI Stock Analysis

• Market Cap: ¥5.80B
• 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: 4,459,567
• 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: ¥1,249.00 ▼(-9.69% Downside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is held down primarily by weak financial quality—ongoing losses, sharply negative operating/free cash flow, and rising leverage—despite solid revenue growth and high gross margins. Technicals also point to a weak downtrend (price below key moving averages, negative MACD), while valuation is a further headwind due to a very high P/E and no dividend support.

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.

DIGITAL PLUS, Inc. Financial Statement Overview

Summary

Revenue growth is solid (+10.1%) and gross margin is high (~76%), but recent profitability has turned negative (TTM net margin about -4.7%) and leverage has risen sharply (debt-to-equity ~1.61–1.65). The biggest drag is cash burn, with deeply negative TTM operating cash flow (-620M) and free cash flow (-630M), increasing near-term financial risk.

Income Statement

TTM (Trailing-Twelve-Months) revenue growth is strong (+10.1%) and gross margins remain high (~76%), suggesting solid core economics. However, profitability is still weak: EBIT and net income are negative (TTM net margin about -4.7%), following a sharp deterioration from profitability in 2024 to losses in 2025 annual results. EBITDA is positive in TTM, but the overall earnings profile remains volatile and not yet consistently profitable.

Balance Sheet

Leverage has increased materially, with debt-to-equity rising from ~0.36 (2022) to ~1.61–1.65 (2025), reducing financial flexibility. Equity remains positive, but returns to shareholders are negative in the most recent periods (TTM return on equity about -5.7%), reflecting loss-making operations. The balance sheet is not distressed on equity value alone, but the rising debt load alongside weaker earnings increases risk.

Cash Flow

Cash generation is the main weakness: TTM operating cash flow is deeply negative (-620M) and free cash flow is also sharply negative (-630M), a significant deterioration versus earlier years that included positive operating cash flow (2021–2022). While free cash flow growth is positive in TTM, it is improving from a very weak base and remains materially cash-consuming, implying higher reliance on funding or balance sheet capacity.

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	50.65M	-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	1.42B	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: Negative
• Last Price: 1383.00
• 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:3691, the sentiment is Negative. The current price of 1383 is below the 20-day moving average (MA) of 1522.60, below the 50-day MA of 1574.78, and above the 200-day MA of 1343.54, indicating a bearish trend. The MACD of -45.01 indicates Positive momentum. The RSI at 33.49 is Neutral, neither overbought nor oversold. The STOCH value of 4.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	¥27.34B	12.43	―	0.38%	18.02%	46.43%
6180	74 Outperform	¥7.39B	15.62	―	3.29%	7.47%	55.61%
6185	64 Neutral	¥5.56B	24.73	―	―	8.77%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6562	60 Neutral	¥11.06B	10.90	―	―	33.34%	-25.08%
2489	57 Neutral	¥9.98B	40.80	―	1.09%	-5.70%	-215.73%
3691	42 Neutral	¥5.80B	141.08	―	―	11.29%	-358.08%