Gungho Online Entertainment (3765) AI Stock Analysis

• Market Cap: $142.28B
• Dividend Yield: 2.43%
• Average Volume (3M): 141.23K
• Price to Earnings (P/E): 25.1
• Beta (1Y): 0.47
• 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: 0.28
• Enterprise Value/Revenue: 0.40
• Enterprise Value/Gross Profit: 0.83
• Enterprise Value/Ebitda: 3.24
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: ¥2,641.00 ▲(7.27% 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 (3765) is a Japanese video game developer and publisher known for its innovative mobile and online games. Founded in 1998, the company operates primarily in the gaming sector, focusing on developing engaging gaming experiences across various platforms, including mobile devices and PCs. Some of its most notable products include the popular puzzle game 'Puzzle & Dragons,' which has garnered a significant user base and revenue through in-game purchases and events.

How the Company Makes Money

Gungho Online Entertainment generates revenue primarily through in-game purchases and microtransactions associated with its games, particularly 'Puzzle & Dragons.' Players can buy virtual currency and items that enhance their gaming experience. Additionally, the company earns revenue from advertising, partnerships, and collaborations with other game developers and brands. The company has also engaged in licensing agreements for merchandise and promotional content, further diversifying its income streams. Strategic partnerships with global platforms and participation in gaming events contribute to its visibility and player acquisition, positively impacting its overall 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	12.43B	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: Negative
• Last Price: 2462.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 2462 is below the 20-day moving average (MA) of 2463.70, below the 50-day MA of 2582.63, and below the 200-day MA of 2807.66, indicating a bearish trend. The MACD of -39.83 indicates Negative momentum. The RSI at 45.33 is Neutral, neither overbought nor oversold. The STOCH value of 69.71 is Neutral, 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
2432	78 Outperform	$296.15B	9.23	17.98%	2.77%	34.16%	―
2121	74 Outperform	$201.21B	12.49	9.54%	4.15%	1.14%	77.07%
3765	64 Neutral	$142.28B	25.10	3.38%	2.43%	-3.12%	-63.07%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3932	60 Neutral	¥38.22B	50.95	―	4.11%	-15.30%	39.61%
3632	54 Neutral	$75.22B	18.37	4.14%	2.05%	-2.61%	116.80%
3903	46 Neutral	¥21.91B	6.25	―	―	-39.08%	―

Gungho Online Entertainment Corporate Events

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.

GungHo Online Entertainment Settles Misconduct Case with Counterparty

GungHo Online Entertainment, Inc. has reached a settlement with a counterparty involved in a misconduct case where a former employee improperly paid outsourcing fees, resulting in a financial loss of approximately 100 million yen. The settlement includes a lump-sum repayment of 70 million yen and the remaining balance to be paid in installments, with the overall impact on the company’s financial results expected to be minimal.

The most recent analyst rating on (JP:3765) stock is a Hold with a Yen3017.00 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 Receives Shareholder Petition for Extraordinary Meeting

GungHo Online Entertainment has announced that it received a petition from shareholders seeking permission to convene an extraordinary general meeting. The company has already scheduled this meeting for September 24, 2025, and believes there is no need to grant additional permissions for the meeting. The company plans to submit necessary arguments to the Tokyo District Court and will make further announcements if required.

GungHo Online Entertainment Proposes Amendment to Enhance Governance

GungHo Online Entertainment, Inc. announced a proposal to amend its Articles of Incorporation by removing a clause that adds requirements for resolutions to dismiss directors. This change, aimed at enhancing corporate governance, will be presented at an Extraordinary General Meeting of Shareholders on September 24, 2025.

GungHo Online Entertainment Opposes Proposal to Dismiss President

GungHo Online Entertainment’s Board of Directors opposes Proposal No. 2 from Strategic Capital, which suggests dismissing President Morishita. The Board believes that President Morishita’s continued leadership is crucial for maintaining and enhancing the company’s corporate value, and dismissing him could significantly impair the company’s performance.

GungHo Online Entertainment Schedules Extraordinary Shareholders Meeting to Address Governance Proposals

GungHo Online Entertainment has announced the details of an upcoming Extraordinary General Meeting of Shareholders scheduled for September 24, 2025. The meeting will address two main proposals: a partial amendment of the Articles of Incorporation to improve corporate governance by removing specific requirements for dismissing directors, and a shareholder proposal to dismiss Director Kazuki Morishita. The board of directors has unanimously resolved on the agenda and venue for the meeting, indicating a significant focus on corporate governance and shareholder engagement.

GungHo Online Entertainment Issues Correction on Employee Misconduct Notice

GungHo Online Entertainment, Inc. issued a correction regarding a previous notice about misconduct by a former employee. The correction involves the fiscal year end date, changing it from March 2026 to December 2025. The company stated that the misconduct’s impact on financial results is immaterial and promised to disclose any future matters requiring attention, along with updates on measures to prevent recurrence by the end of the year.

GungHo Online Entertainment Addresses Executive Misconduct and Financial Safeguards

GungHo Online Entertainment has uncovered misconduct by a former executive who misappropriated company funds through fictitious business orders, causing financial damage of approximately 346 million yen. The company has taken strict measures, including dismissal and legal consultations, to address the issue and prevent recurrence, while assuring stakeholders that the financial impact is minimal and promising further updates on preventive measures.