Dentsu (4324) AI Stock Analysis

• Market Cap: $804.10B
• Dividend Yield: 4.47%
• Average Volume (3M): 1.26M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.78
• Revenue Growth: 2.30%
• EPS Growth: -1250.34%
• Country: JP
• Employees: 67,667
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): -307.87
• Shares Outstanding: 265,800,000
• 10 Day Avg. Volume: 915,960
• 30 Day Avg. Volume: 1,261,200
• PEG Ratio: >-0.01
• Price to Book (P/B): 1.43
• Price to Sales (P/S): 0.71
• P/FCF Ratio: 29.08
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 0.77
• Enterprise Value/Gross Profit: 0.92
• Enterprise Value/Ebitda: 9.07
• 1Y Price Target: $2,811.59
• Price Target Upside: -9.97% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: ¥3,104.00 ▼(-0.61% Downside)

Dentsu's overall stock score reflects significant financial challenges and valuation concerns, offset by some positive technical signals and strategic initiatives highlighted in the earnings call. The strong performance in Japan and cost reduction efforts are positives, but international difficulties and dividend uncertainties remain key risks.

Dentsu Business Overview & Revenue Model

Company Description

Dentsu Group Inc. (TSE: 4324) is a global advertising and marketing services company headquartered in Tokyo, Japan. The company operates through various segments, including Digital, Media, and Creative, providing a comprehensive range of services such as advertising, media planning and buying, digital transformation, customer relationship management, and public relations. Dentsu serves a diverse clientele across numerous industries, leveraging data-driven insights and innovative strategies to enhance brand visibility and consumer engagement.

How the Company Makes Money

Dentsu generates revenue primarily through its advertising and marketing services, which are billed either on a project basis or through retainers with clients. Key revenue streams include fees from media buying, performance-based advertising, and digital marketing services. The company has formed significant partnerships with technology and data analytics firms, enhancing its capabilities in programmatic advertising and data-based marketing solutions. Additionally, Dentsu benefits from a growing demand for integrated marketing services, allowing it to capitalize on cross-selling opportunities across its segments. The company's global presence also enables it to attract multinational clients, further contributing to its earnings.

Dentsu Financial Statement Overview

Summary

Dentsu's financial performance is challenged by declining revenues and profitability issues, with a negative net profit margin and return on equity. While cash flow management shows some strength, the company needs to address operational inefficiencies to improve its financial health.

Income Statement

Dentsu's income statement reveals significant challenges, with a declining revenue growth rate of -65.3% in TTM, indicating a severe contraction. The net profit margin is negative at -13.45%, reflecting substantial losses. Despite a strong gross profit margin of 84.32%, the negative EBIT and EBITDA margins highlight operational inefficiencies. The company needs to address these profitability issues to improve its financial health.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.85, suggesting manageable leverage. However, the return on equity is negative at -24.64%, indicating poor returns for shareholders. The equity ratio stands at 18.39%, reflecting a stable capital structure. Overall, while leverage is under control, the negative ROE is a concern.

Cash Flow

Cash flow analysis shows a positive free cash flow growth rate of 6.4% in TTM, indicating some improvement in cash generation. The operating cash flow to net income ratio is low at 0.086, suggesting weak cash conversion. However, the free cash flow to net income ratio is relatively strong at 0.85, indicating effective cash management despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.41T	1.41T	1.30T	1.24T	1.09T	939.24B
Gross Profit	1.18T	1.20T	1.14T	1.12T	976.58B	835.04B
EBITDA	120.31B	-29.60B	139.50B	203.16B	302.49B	-32.61B
Net Income	-271.38B	-192.17B	-10.71B	59.85B	108.39B	-159.59B
Balance Sheet
Total Assets	3.15T	3.51T	3.63T	3.74T	3.72T	3.38T
Cash, Cash Equivalents and Short-Term Investments	369.24B	397.19B	390.68B	603.74B	723.54B	530.69B
Total Debt	559.43B	547.27B	713.46B	532.43B	579.19B	584.81B
Total Liabilities	2.50T	2.74T	2.72T	2.79T	2.81T	2.56T
Stockholders Equity	578.97B	696.84B	841.65B	880.27B	845.03B	756.87B
Cash Flow
Free Cash Flow	146.75B	34.30B	46.38B	62.37B	118.68B	66.84B
Operating Cash Flow	168.52B	59.98B	75.27B	80.90B	139.72B	88.31B
Investing Cash Flow	5.24B	-43.33B	-159.44B	-36.37B	155.23B	126.12B
Financing Cash Flow	-81.59B	-53.30B	-140.54B	-176.17B	-125.19B	-85.73B

Dentsu Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3123.00
• 50DMA: Positive
• 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:4324, the sentiment is Positive. The current price of 3123 is above the 20-day moving average (MA) of 3102.55, above the 50-day MA of 3117.58, and above the 200-day MA of 3103.54, indicating a bullish trend. The MACD of -10.98 indicates Positive momentum. The RSI at 51.09 is Neutral, neither overbought nor oversold. The STOCH value of 42.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4324.

Dentsu Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4293	77 Outperform	¥86.17B	25.25	―	7.55%	-12.17%	-47.60%
2491	67 Neutral	¥21.94B	4.89	―	7.99%	-3.20%	34.08%
2461	63 Neutral	¥33.60B	26.18	―	5.24%	2.34%	-12.13%
4751	62 Neutral	$770.83B	30.41	15.68%	1.13%	6.80%	58.78%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
2433	58 Neutral	$406.94B	47.18	2.19%	2.85%	-2.42%	-66.86%
4324	52 Neutral	$804.10B	-2.96	-37.59%	4.47%	2.30%	-1250.34%

Dentsu Corporate Events

Dentsu’s Earnings Call: Mixed Results and Strategic Moves

The recent earnings call for Dentsu Group Inc. painted a picture of mixed performance, with strong results in Japan contrasting with ongoing challenges in the international business. While Japan achieved record-high net revenue and operating margins, the international segments struggled with negative organic growth and a significant goodwill impairment loss. The company’s strategic initiatives focusing on cost reduction and efficiency improvements were highlighted as positive steps, yet these efforts are overshadowed by the difficulties faced abroad.

Dentsu Reports Mixed Results Amid Global Challenges

Dentsu Group Inc., a leading global advertising and public relations company based in Japan, operates across various regions, including Japan, the Americas, EMEA, and APAC, providing a wide range of communication-related services. In its latest earnings report for the first half of 2025, Dentsu reported a slight increase in revenue by 0.4% to 683,904 million yen, despite facing a challenging global economic environment. However, the company experienced a significant operating loss of 36,545 million yen, primarily due to impairment losses in the Americas and EMEA regions.

Dentsu Group Inc. Reports Mixed Financial Results for H1 2025

Dentsu Group Inc. reported its financial results for the first half of 2025, showing a slight increase in revenue by 0.4% compared to the previous year. However, the company faced a significant decline in profits, with a loss before tax of 43,375 million yen and a comprehensive income loss of 94,847 million yen, indicating challenges in maintaining profitability.

The most recent analyst rating on (JP:4324) stock is a Sell with a Yen3000.00 price target. To see the full list of analyst forecasts on Dentsu stock, see the JP:4324 Stock Forecast page.