Gungho Online Entertainment (3765) AI Stock Analysis

• Market Cap: $150.33B
• Dividend Yield: 2.27%
• Average Volume (3M): 247.60K
• Price to Earnings (P/E): 17.8
• Beta (1Y): 0.52
• Revenue Growth: -17.33%
• EPS Growth: -28.64%
• Country: JP
• Employees: 1,583
• Sector: Communication Services
• Sector Strength: 81
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 28.92
• Shares Outstanding: 69,161,415
• 10 Day Avg. Volume: 193,480
• 30 Day Avg. Volume: 247,603
• PEG Ratio: -1.53
• Price to Book (P/B): 1.49
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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

• Rating: 76 Outperform
• Price Target: ―

Gungho Online Entertainment's robust balance sheet and strong profitability margins are notable strengths, providing stability amid revenue growth challenges. The stock's technical indicators suggest positive momentum, though caution is advised as it approaches overbought levels. Valuation metrics indicate a fair market price, complemented by a reasonable dividend yield.

Gungho Online Entertainment Business Overview & Revenue Model

Company Description

GungHo Online Entertainment, Inc. plans, develops, operates, and distributes online computer games, smartphone applications, and console games. The company was formerly known as ONSale Co., Ltd. and changed its name to GungHo Online Entertainment, Inc. in August 2002. GungHo Online Entertainment, Inc. was founded in 1998 and is based in Tokyo, Japan.

How the Company Makes Money

GungHo Online Entertainment primarily generates revenue through the development and publishing of online and mobile games. The company employs a free-to-play model for many of its games, offering them at no initial cost to attract a large user base. Revenue is then generated through in-game purchases, where players buy virtual items, upgrades, and currency to enhance their gaming experience. Additionally, GungHo benefits from partnerships and collaborations with other game developers and publishers, which can include revenue-sharing agreements or licensing deals. The company's diverse portfolio and strategic partnerships help it maintain a steady flow of income, driven largely by microtransactions and player engagement.

Gungho Online Entertainment Financial Statement Overview

Summary

Gungho Online Entertainment demonstrates solid financial health with strong profitability margins and a robust balance sheet. However, the notable decline in revenue in 2024 suggests challenges in maintaining growth momentum. Despite this, the company's low leverage and strong cash position provide a buffer against potential risks, allowing for sustained operations and potential growth opportunities.

Income Statement

The company demonstrates strong profitability with a gross profit margin averaging around 50% over the years. However, the recent decline in total revenue from 125.3 billion in 2023 to 103.6 billion in 2024, a decrease of 17.3%, indicates a significant drop in revenue growth. Net profit margin also decreased from 13.1% in 2023 to 10.8% in 2024. Despite this, EBIT and EBITDA margins remain healthy, reflecting efficient cost management.

Balance Sheet

The company's balance sheet shows exceptional strength with a high equity ratio of approximately 73% in 2024, indicating low leverage and solid financial stability. The debt-to-equity ratio is minimal at 0.01, and a strong return on equity averaging around 12% over the years suggests efficient use of equity capital. The company's substantial cash reserves further enhance its financial stability.

Cash Flow

Cash flow analysis reveals a mixed performance. Although free cash flow decreased by 15% from 19.9 billion in 2023 to 16.9 billion in 2024, the company maintains a robust free cash flow to net income ratio, reflecting good cash generation relative to net income. The operating cash flow to net income ratio remains strong, indicating consistent cash flow from operations.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
103.60B	125.31B	105.50B	104.63B	98.84B
	Gross Profit
53.41B	56.97B	58.42B	61.06B	55.35B
	EBIT
17.49B	27.88B	27.65B	32.80B	30.16B
	EBITDA
20.81B	29.09B	29.94B	37.64B	29.46B
	Net Income Common Stockholders
11.17B	16.43B	19.02B	22.88B	16.37B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
104.62B	140.03B	127.21B	116.46B	102.72B
	Total Assets
175.46B	168.04B	152.21B	134.93B	122.25B
	Total Debt
1.28B	0.00	489.00M	508.00M	614.00M
	Net Debt
-98.32B	-136.20B	-125.46B	-114.50B	-102.11B
	Total Liabilities
21.93B	18.55B	19.38B	16.26B	17.53B
	Stockholders Equity
128.77B	128.76B	118.38B	108.40B	97.51B
Cash Flow		Free Cash Flow
16.89B	19.90B	18.23B	22.98B	21.57B
	Operating Cash Flow
17.13B	20.51B	18.66B	23.65B	24.21B
	Investing Cash Flow
-47.59B	-14.61B	-2.79B	-5.41B	-6.47B
	Financing Cash Flow
-12.22B	-7.03B	-9.27B	-12.39B	-4.71B

Gungho Online Entertainment Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2756.00
• 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:3765, the sentiment is Negative. The current price of 2756 is below the 20-day moving average (MA) of 2901.53, below the 50-day MA of 2908.83, and below the 200-day MA of 3051.18, indicating a bearish trend. The MACD of -41.06 indicates Positive momentum. The RSI at 37.72 is Neutral, neither overbought nor oversold. The STOCH value of 6.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3765.

Gungho Online Entertainment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3765	76 Outperform	$150.33B	17.84	6.97%	2.27%	-17.33%	-28.64%
Sector *	60 Neutral	$14.06B	6.51	-3.76%	3.69%	2.48%	-35.40%
DNACF		$2.25B	16.06	10.56%	1.86%	―	―
GREZF		$633.46M	41.18	2.39%	2.96%	―	―
MIXIF		$1.57B	14.45	9.81%	3.29%	―	―
3932	64 Neutral	¥42.39B	25.76		3.23%	1.15%	1150.40%
3903	43 Neutral	¥24.99B	―		―	-12.61%	-314.92%

Gungho Online Entertainment Corporate Events

GungHo Online Entertainment Finalizes Stock Option Issuance for Executives

GungHo Online Entertainment, Inc. has finalized the details for issuing stock options as part of a stock-based compensation scheme for its Managing Directors and Executive Officers. This decision, made by the Board of Directors, aims to align the interests of the company’s leadership with its shareholders, potentially impacting the company’s operational strategies and stakeholder engagement.

GungHo Online Entertainment Announces Stock-Based Compensation Plan

GungHo Online Entertainment, Inc. has resolved to grant stock options as a form of stock-based compensation to its Managing Directors and Executive Officers. This decision, made during the Board of Directors meeting on April 14, 2025, involves the allocation of 528 units of stock acquisition rights, translating to 52,800 shares of the company’s common stock. This move is part of a broader strategy to align the interests of the company’s leadership with its shareholders, potentially impacting the company’s operational dynamics and market positioning.

GungHo Online Entertainment Issues Stock Options to Boost Management Focus

GungHo Online Entertainment, Inc. announced the issuance of stock options as part of a stock-based compensation scheme for its Executive Directors and Officers. This initiative aims to enhance management’s focus on shareholder value and motivate leadership towards long-term business growth and corporate value improvement.

GungHo Online Entertainment Clarifies Shareholder Structure and Independence

GungHo Online Entertainment, Inc. announced details regarding its controlling shareholders, specifically Belleisle Japan Inc. and SON Financial LLC. Belleisle Japan Inc. holds a significant 23.34% of voting rights, making it the most influential entity in the company’s shareholder structure. Despite this, GungHo maintains its operational independence, with no business or human relationships with Belleisle Japan Inc., ensuring no constraints on its decision-making processes.

GungHo Online Completes Treasury Share Acquisition

GungHo Online Entertainment, Inc. has completed the acquisition of 1,023,600 treasury shares at a total price of 3,110,047,700 yen, as part of a resolution by the Board of Directors. This strategic move, executed on the Tokyo stock exchange, reflects the company’s efforts to manage its capital structure and potentially enhance shareholder value.

GungHo Online Entertainment Advances Treasury Share Acquisition

GungHo Online Entertainment, Inc. announced the progress of its treasury share acquisition, following a resolution made on February 14, 2025. The company acquired 615,300 common shares at a total price of 1,889,776,200 yen through the Tokyo stock exchange between February 17 and February 28, 2025. This acquisition is part of a larger plan to acquire up to 1.8 million shares, with a maximum budget of 5 billion yen, by March 24, 2025. The move is likely aimed at enhancing shareholder value and optimizing capital structure.