Dentsu (4324) AI Stock Analysis

• Market Cap: $805.66B
• Dividend Yield: 4.5%
• Average Volume (3M): 3.36M
• 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: 96
• Industry: Advertising Agencies
• EPS (TTM): -307.87
• Shares Outstanding: 265,800,000
• 10 Day Avg. Volume: 4,180,130
• 30 Day Avg. Volume: 3,364,950
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 0.77
• Enterprise Value/Gross Profit: 0.92
• Enterprise Value/Ebitda: 9.07
• 1Y Price Target: $3,000.59
• Price Target Upside: -3.14% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 50 Neutral
• Price Target: ¥3,029.00 ▼(-2.23% Downside)

Dentsu's overall stock score reflects significant financial and operational challenges, particularly in its international business. While there are positive steps towards cost reduction and efficiency improvements, the negative financial performance and bearish technical indicators weigh heavily on the score. The high dividend yield offers some appeal, but the suspension of dividends and negative P/E ratio highlight ongoing difficulties.

Dentsu Business Overview & Revenue Model

Company Description

Dentsu Group Inc. operates in the advertising business in Japan. The company offers advertising services, including newspapers, magazines, radio, television, internet, sales promotions, movies, out-of-home, public transportation, and other services. It is also involved in the consulting, development, and operation of information systems; sale of various software products; and provision of marketing and comprehensive network services. In addition, the company leases office buildings; and buys and sells real estate properties, as well as offers building and calculation services. Dentsu Group Inc. was founded in 1901 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Dentsu makes money through a comprehensive revenue model centered around its diverse range of marketing and advertising services. The company earns revenue primarily from fees charged for media planning and buying, which involves negotiating and purchasing advertising space on behalf of clients. Additionally, Dentsu generates income from creative services, such as developing advertising campaigns, and digital marketing services, which include online advertising, search engine optimization, and social media management. A significant portion of its revenue also comes from data analytics and consumer insights services that help clients understand market trends and target their audiences more effectively. Furthermore, Dentsu has established strategic partnerships and collaborations with global technology firms and media companies, enhancing its service offerings and broadening its revenue streams. The company’s expansive global network and innovative solutions contribute significantly to its earnings.

Dentsu Financial Statement Overview

Summary

Dentsu faces significant financial challenges, with declining revenues and profitability issues. While the balance sheet shows manageable leverage, the negative return on equity is concerning. Cash flow management appears effective, but the company needs to address its operational inefficiencies and improve profitability to enhance its financial position.

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	4.40B	-30.91B	-146.30B	-24.35B	262.23B	137.01B
Financing Cash Flow	-80.74B	-65.71B	-153.68B	-188.19B	-232.19B	-96.62B

Dentsu Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3098.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 3098 is above the 20-day moving average (MA) of 2939.13, above the 50-day MA of 2985.70, and below the 200-day MA of 3226.50, indicating a neutral trend. The MACD of 9.65 indicates Negative momentum. The RSI at 59.99 is Neutral, neither overbought nor oversold. The STOCH value of 85.75 is Negative, 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
Sector *	60 Neutral	$46.60B	4.09	-11.41%	4.12%	1.85%	-42.71%
4324	50 Neutral	$805.66B	―	-37.59%	4.50%	2.30%	-1250.34%
CYAGF	―	$6.03B	35.40	15.68%	<0.01%	―	―
HKUOF	―	$3.00B	46.68	2.19%	3.15%	―	―
4293	77 Outperform	¥87.63B	25.68		7.50%	-12.17%	-47.60%
2491	67 Neutral	¥26.56B	5.52		6.57%	6.24%	48.37%
2461	63 Neutral	¥34.85B	27.16		5.13%	2.34%	-12.13%

Dentsu Corporate Events

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.