Gungho Online Entertainment (3765) AI Stock Analysis

• Market Cap: ¥140.11B
• Dividend Yield: 2.38%
• Average Volume (3M): 141.23K
• Price to Earnings (P/E): 32.7
• Beta (1Y): 0.48
• Revenue Growth: -3.12%
• EPS Growth: -63.07%
• Country: JP
• Employees: 1,583
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 7.97
• Shares Outstanding: 69,161,415
• 10 Day Avg. Volume: 125,650
• 30 Day Avg. Volume: 141,233
• PEG Ratio: -0.55
• Price to Book (P/B): 1.58
• Price to Sales (P/S): 1.97
• P/FCF Ratio: 12.07
• 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: 64 Neutral
• Price Target: ¥2,641.00 ▲(2.13% Upside)

The overall stock score of 64 reflects a combination of solid financial health and bearish technical indicators. The company's strong balance sheet and cash position provide stability, but the recent decline in revenue and bearish market momentum pose challenges. The valuation is somewhat high, but the dividend yield offers some compensation for investors.

Positive Factors

Balance Sheet Strength

A high equity ratio and minimal debt-to-equity indicate strong financial stability, providing resilience against economic downturns and flexibility for future investments.

Profitability Margins

Consistently high profitability margins reflect efficient cost management and pricing power, supporting long-term financial health and competitive positioning.

Cash Generation Ability

Strong cash generation supports ongoing operations, investment in growth opportunities, and potential shareholder returns, enhancing long-term business sustainability.

Negative Factors

Revenue Decline

A significant drop in revenue growth can hinder the company's ability to invest in new projects and maintain competitive edge, impacting long-term growth prospects.

Decreased Free Cash Flow

Reduced free cash flow limits the company's ability to fund new initiatives and return capital to shareholders, potentially affecting future growth and financial flexibility.

Net Profit Margin Decline

A declining net profit margin indicates potential challenges in cost control or pricing power, which could pressure future profitability and financial performance.

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 generates revenue primarily through in-game purchases and microtransactions associated with its mobile and online games. The company offers free-to-play games that entice users to spend on virtual goods, character upgrades, and exclusive content. Additionally, Gungho earns revenue from game downloads and subscriptions where applicable. Strategic partnerships with other gaming firms and collaborations for cross-promotional campaigns further enhance its revenue streams. The company's strong brand recognition and successful game titles, especially in the mobile gaming sector, contribute significantly to its earnings.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	100.53B	103.60B	125.31B	105.50B	104.63B	98.84B
Gross Profit	48.85B	53.41B	56.97B	58.42B	61.06B	55.35B
EBITDA	12.67B	20.81B	30.96B	29.94B	37.64B	29.46B
Net Income	5.81B	11.17B	16.43B	19.02B	22.88B	16.37B
Balance Sheet
Total Assets	168.58B	175.46B	168.04B	152.21B	134.93B	122.25B
Cash, Cash Equivalents and Short-Term Investments	136.83B	104.62B	140.03B	127.21B	116.46B	102.72B
Total Debt	1.35B	759.00M	722.00M	489.00M	508.00M	614.00M
Total Liabilities	20.22B	21.93B	18.55B	19.38B	16.26B	17.53B
Stockholders Equity	122.46B	128.77B	128.76B	118.38B	108.40B	97.51B
Cash Flow
Free Cash Flow	0.00	16.89B	19.90B	18.23B	22.98B	21.57B
Operating Cash Flow	0.00	17.13B	20.51B	18.66B	23.65B	24.21B
Investing Cash Flow	0.00	-47.59B	-14.61B	-2.79B	-5.41B	-6.47B
Financing Cash Flow	0.00	-12.22B	-7.03B	-9.27B	-12.39B	-4.71B

Gungho Online Entertainment Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2586.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3765, the sentiment is Positive. The current price of 2586 is above the 20-day moving average (MA) of 2451.79, above the 50-day MA of 2435.65, and below the 200-day MA of 2664.62, indicating a neutral trend. The MACD of 37.21 indicates Negative momentum. The RSI at 70.67 is Negative, neither overbought nor oversold. The STOCH value of 72.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3765.

Gungho Online Entertainment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2432	78 Outperform	¥283.29B	6.46	17.98%	2.52%	34.16%	―
2121	66 Neutral	¥182.56B	10.93	9.54%	4.61%	1.14%	77.07%
3765	64 Neutral	¥140.11B	32.72	3.38%	2.38%	-3.12%	-63.07%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3932	60 Neutral	¥38.39B	18.38	―	4.06%	-15.30%	39.61%
3632	54 Neutral	¥73.97B	18.07	4.14%	2.09%	-2.61%	116.80%
3903	46 Neutral	¥19.50B	6.52	―	―	-37.68%	―

Gungho Online Entertainment Corporate Events

GungHo Revamps Directors’ Pay to Tie Incentives to Corporate Value and Shareholder Interests

GungHo Online Entertainment has introduced a new directors’ remuneration system designed to better reflect the business environment the company faces and to align management incentives with long-term corporate value creation. The framework establishes key performance indicators (KPIs) tied to enhancing corporate value and transitions executive pay toward a structure more closely linked with shareholder interests, supporting the company’s newly announced management structure and strengthening its corporate governance with a clear focus on maximizing corporate value.

The most recent analyst rating on (JP:3765) stock is a Hold with a Yen2641.00 price target. To see the full list of analyst forecasts on Gungho Online Entertainment stock, see the JP:3765 Stock Forecast page.

GungHo Online Entertainment Plans Overhaul of Director Pay, Adding Performance-Linked Stock Awards

GungHo Online Entertainment’s Nomination and Remuneration Committee, dominated by independent outside directors, has recommended significant revisions to the remuneration system for executive directors, aiming to better link pay with business performance and long-term corporate value. The proposed changes include a substantial review of basic monetary remuneration levels in line with a newly announced management structure and industry benchmarks, a shift in the key performance indicator for performance-linked cash bonuses from consolidated operating profit to profit attributable to owners of the parent, and setting a maximum annual performance-linked cash pool of ¥400 million, with tighter downside when performance is weak and higher potential payouts when results are strong. In addition, the committee has advised abolishing the current stock option-based remuneration and introducing a performance-linked stock-based plan that grants restricted shares based on performance and shareholder value growth over a defined evaluation period, in order to heighten management’s focus on share price and alignment with shareholder interests, while outside and part-time directors will continue to receive only basic remuneration. These revisions will be deliberated by the Board and key elements will be put to a shareholder vote at the March 2026 ordinary general meeting.

The most recent analyst rating on (JP:3765) stock is a Hold with a Yen2641.00 price target. To see the full list of analyst forecasts on Gungho Online Entertainment stock, see the JP:3765 Stock Forecast page.

GungHo Reshapes Top Management as Founder Focuses on Game Development

GungHo Online Entertainment has announced a management reshuffle effective February 1, 2026, under which long-time president and CEO Kazuki Morishita will step down from his representative role to become chairman of the board and chief development officer, allowing him to focus more fully on directing and overseeing game development to further enhance corporate value. Current CFO and head of the Finance Accounting Division, Kazuya Sakai, will be promoted to representative director, president, and CEO, leveraging his experience in creating new revenue streams, establishing a global brand, and leading shareholder dialogue, while Kazumasa Takayama, currently executive officer and IRO, will succeed Sakai as CFO, collectively signaling a shift toward a structure that separates creative leadership from corporate and financial management to support sustainable growth.

The most recent analyst rating on (JP:3765) stock is a Hold with a Yen2641.00 price target. To see the full list of analyst forecasts on Gungho Online Entertainment stock, see the JP:3765 Stock Forecast page.

GungHo Online Entertainment Strengthens Controls Following Misconduct

GungHo Online Entertainment has announced progress in addressing misconduct by a former executive-level employee who misappropriated company funds through fictitious business orders. The company has taken steps to prevent future incidents by decentralizing authority, enhancing compliance training, improving internal controls, and strengthening internal audits. These measures aim to restore stakeholder trust and ensure robust operational integrity.

The most recent analyst rating on (JP:3765) stock is a Hold with a Yen2641.00 price target. To see the full list of analyst forecasts on Gungho Online Entertainment stock, see the JP:3765 Stock Forecast page.

GungHo Online Entertainment Reports Decline in Q3 Financial Performance

GungHo Online Entertainment reported a significant decline in its financial performance for the third quarter of the fiscal year ending December 31, 2025. The company experienced a decrease in net sales, operating profit, and net profit compared to the previous year, highlighting challenges in its operating environment. Despite maintaining a stable shareholder’s equity ratio, the company has not disclosed its full-year earnings forecast, indicating uncertainty in its market conditions.

The most recent analyst rating on (JP:3765) stock is a Hold with a Yen2978.00 price target. To see the full list of analyst forecasts on Gungho Online Entertainment stock, see the JP:3765 Stock Forecast page.