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LY Corporation (JP:4689)
:4689
Japanese Market
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LY Corporation (4689) AI Stock Analysis

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JP:4689

LY Corporation

(4689)

Rating:70Outperform
Price Target:
¥534.00
▲(12.14% Upside)
LY Corporation's strong financial performance and strategic focus on growth areas like AI and digital finance are significant strengths. However, technical indicators suggest bearish momentum, and high valuation metrics indicate potential overvaluation. Earnings call insights highlight growth but also underline risks in advertising and AI investment costs.

LY Corporation (4689) vs. iShares MSCI Japan ETF (EWJ)

LY Corporation Business Overview & Revenue Model

Company DescriptionLY Corp. engages in the management of group companies and related operations. It operates through the following segments: Media and Commerce. The Media segment covers the advertisement related services that include search linked advertisement and display advertisement. The Commerce segment handles the commerce related services in Yahoo Auction!, Yahoo! Shopping, ASKUL Corp., and Yahoo! Premium. It also provides the settlement finance related services. The company was founded on January 31, 1996 and is headquartered in Tokyo, Japan.
How the Company Makes MoneyLY Corporation generates revenue through multiple channels, including direct sales of consumer electronics, partnerships with major retailers, and contracts with automotive manufacturers for electronic components. A significant portion of its income comes from the sale of smart home devices, which have seen increased demand in recent years. Additionally, the company benefits from long-term contracts with telecommunications providers, supplying essential hardware for network infrastructure. Strategic collaborations with tech firms for product development and joint ventures in emerging markets also contribute to its earnings, allowing LY Corporation to leverage new opportunities and expand its market reach.

LY Corporation Earnings Call Summary

Earnings Call Date:Aug 04, 2025
(Q4-2024)
|
% Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in adjusted EBITDA, significant revenue increases across segments, and strategic advancements in AI and financial services. However, challenges remain in the advertising sector and the costs associated with AI investments pose a potential risk to profitability.
Q4-2024 Updates
Positive Updates
Adjusted EBITDA Growth
Adjusted EBITDA grew 13.5% year-on-year to JPY470.8 billion. The margin expanded to 24.6%.
Revenue Growth Across Segments
In FY '24, revenue and profit increased in Media, Commerce, and Strategic segments.
Share Repurchase Announcement
Announced up to JPY150 billion share repurchase to improve capital efficiency.
Significant Growth in PayPay
PayPay consolidated achieved 17.7% year-on-year growth, with GMV increasing by 23.4% year-over-year.
Strong Performance in LINE Official Account and MINI App
Continued double-digit growth exceeding 18% for three consecutive years in account ads.
Strategic Focus on AI Agents
Plans to deploy AI agents in consumer-facing services, leveraging extensive user data and content.
Negative Updates
Decline in Commerce Ads
Commerce ads revenue declined, although disciplined sales promotion investment led to a major growth recovery.
Challenges in Display Advertising
Revenue from display advertising declined by 1.4% year-on-year due to decreased demand in some industries.
Flat Search Advertising Revenue
Search advertising revenue for partners' websites declined, impacting overall media revenue.
Higher Costs Due to AI Investments
Costs related to generative AI are anticipated, impacting EBITDA despite revenue growth expectations.
Company Guidance
During the FY 2024 full-year and Q4 earnings call for LY Corporation, CEO Takeshi Idezawa provided guidance for FY 2025, emphasizing a focus on transforming existing services and expanding into new areas. The company reported a 13.5% year-on-year growth in adjusted EBITDA to JPY470.8 billion. For FY 2025, LY Corporation anticipates high single-digit growth in both revenue and profit, with group revenue expected to grow by approximately 9% and adjusted EBITDA projected to rise by 6.2% to 8.3%. The company also announced a share repurchase of up to JPY150 billion to improve capital efficiency. Key strategic areas include developing the LINE Official Account and MINI App into a business platform, transitioning PayPay into a digital financial platform, and deploying AI agents in consumer-facing services. Additionally, LY Corporation aims for a cumulative total payout ratio of over 70% over the next five years through flexible share buybacks and stable dividends.

LY Corporation Financial Statement Overview

Summary
LY Corporation exhibits strong financial performance with robust revenue growth and profitability. The balance sheet is stable with prudent leverage, and cash flows are healthy, supporting future growth. Some volatility in operational margins and capital allocation is noted.
Income Statement
85
Very Positive
LY Corporation has demonstrated strong revenue growth with a consistent upward trajectory over the years. The gross profit margin remains robust, indicating effective cost management. Net profit margin has improved significantly, reflecting enhanced profitability. However, the EBIT margin shows some volatility, suggesting potential operational challenges.
Balance Sheet
78
Positive
The company's balance sheet is solid with a healthy equity ratio, indicating a strong capital structure. The debt-to-equity ratio is manageable, suggesting prudent leverage levels. Return on equity has been improving, showcasing effective utilization of shareholder funds. However, the increase in total liabilities warrants monitoring for potential risk.
Cash Flow
82
Very Positive
LY Corporation's cash flow position is strong, with significant growth in free cash flow. The operating cash flow to net income ratio is healthy, indicating efficient cash generation from operations. The free cash flow to net income ratio also shows positive trends, supporting sustainable growth. However, fluctuations in investing and financing cash flows suggest potential volatility in capital allocation.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.92T1.92T1.81T1.67T1.57T1.21T
Gross Profit1.39T1.39T1.29T1.16T1.07T773.40B
EBITDA405.27B444.44B361.30B306.81B325.25B283.52B
Net Income153.46B153.47B113.20B178.87B77.32B70.14B
Balance Sheet
Total Assets9.16T9.16T9.04T8.59T7.11T6.70T
Cash, Cash Equivalents and Short-Term Investments1.04T1.04T1.42T1.65T1.13T1.07T
Total Debt1.69T1.69T1.88T1.91T1.67T1.39T
Total Liabilities5.74T5.74T5.60T5.27T4.13T3.71T
Stockholders Equity3.00T3.00T3.04T2.92T2.68T2.68T
Cash Flow
Free Cash Flow419.85B419.85B245.47B-55.94B-6.32B137.18B
Operating Cash Flow519.59B519.59B316.48B93.05B266.31B207.92B
Investing Cash Flow-505.74B-485.28B-444.06B319.79B-303.90B-12.35B
Financing Cash Flow-416.69B-437.15B-110.80B105.79B91.63B-12.07B

LY Corporation Technical Analysis

Technical Analysis Sentiment
Negative
Last Price476.20
Price Trends
50DMA
508.30
Negative
100DMA
519.05
Negative
200DMA
489.03
Negative
Market Momentum
MACD
-12.84
Negative
RSI
45.71
Neutral
STOCH
72.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4689, the sentiment is Negative. The current price of 476.2 is above the 20-day moving average (MA) of 473.57, below the 50-day MA of 508.30, and below the 200-day MA of 489.03, indicating a neutral trend. The MACD of -12.84 indicates Negative momentum. The RSI at 45.71 is Neutral, neither overbought nor oversold. The STOCH value of 72.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4689.

LY Corporation Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
¥3.15T22.35
1.50%5.24%23.07%
61
Neutral
$17.97B12.87-5.30%2.97%1.26%-14.45%
$3.59B26.9438.20%2.79%
81
Outperform
¥441.87B30.34
19.50%2.10%
77
Outperform
4.92%-12.12%
76
Outperform
¥80.98B39.00
0.73%36.67%35.38%
73
Outperform
¥107.71B33.49
1.48%5.68%27.44%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4689
LY Corporation
476.20
84.28
21.50%
KKKUF
Kakaku
18.38
1.61
9.60%
JP:3661
m-up holdings, Inc.
2,237.00
1,001.16
81.01%
JP:4194
Visional, Inc.
11,055.00
1,885.00
20.56%
JP:4298
Proto Corp.
2,090.00
702.39
50.62%
JP:4825
Weathernews Inc.
4,700.00
1,939.80
70.28%

LY Corporation Corporate Events

LY Corporation Reports Mixed Financial Results for Q1 FY2025
Aug 4, 2025

LY Corporation reported its financial results for the three months ended June 30, 2025, showing a revenue increase of 5.7% year-on-year. However, the company experienced a decline in operating income by 11% and a slight decrease in profit before tax by 0.7%. The results indicate a mixed performance, with growth in revenue but challenges in maintaining profitability, which could impact their market positioning and investor confidence.

The most recent analyst rating on (JP:4689) stock is a Buy with a Yen585.00 price target. To see the full list of analyst forecasts on LY Corporation stock, see the JP:4689 Stock Forecast page.

LY Corporation Announces Share Repurchase and Treasury Share Cancellation
Jun 30, 2025

LY Corporation has announced the establishment of a facility for share repurchase and the cancellation of treasury shares. The company aims to enhance its corporate value by balancing profit growth with strategic investments and improving shareholder returns. The share repurchase program targets up to 63.4 million shares, with a maximum purchase amount of JPY38.5 billion, to be executed between July and September 2025. The cancellation of repurchased shares is scheduled for October 2025, reflecting LY Corporation’s commitment to capital efficiency and shareholder value.

The most recent analyst rating on (JP:4689) stock is a Hold with a Yen530.00 price target. To see the full list of analyst forecasts on LY Corporation stock, see the JP:4689 Stock Forecast page.

LY Corporation Completes Share Repurchase via Tender Offer
Jun 5, 2025

LY Corporation announced the completion of its share repurchase program through a tender offer, which was resolved by the board of directors on May 7, 2025. The tender offer, which began on May 8 and concluded on June 4, 2025, involved the acquisition of 213,264,491 shares at a price of 533 yen per share. The company plans to cancel a portion of these treasury shares on July 1, 2025, which could impact the company’s stock value and shareholder equity.

The most recent analyst rating on (JP:4689) stock is a Buy with a Yen585.00 price target. To see the full list of analyst forecasts on LY Corporation stock, see the JP:4689 Stock Forecast page.

LY Corporation Reports Compliance Measures for LINE App
May 20, 2025

LY Corporation has submitted a report to Japan’s Ministry of Internal Affairs and Communications regarding the administrative guidance it received for its LINE app (Albums). The company is implementing recurrence prevention and containment measures, such as reinforcing tests and inspecting source codes, to address the issues raised. Additionally, LY Corporation has established systems for early error detection and defect impact minimization, aiming to rebuild trust and ensure user confidence in its services.

The most recent analyst rating on (JP:4689) stock is a Buy with a Yen585.00 price target. To see the full list of analyst forecasts on LY Corporation stock, see the JP:4689 Stock Forecast page.

LY Corporation Secures Prime Market Listing Compliance
May 19, 2025

LY Corporation has successfully met the continued listing requirements for the Tokyo Stock Exchange’s Prime Market as of March 31, 2025. This achievement follows a strategic plan involving the acquisition and cancellation of its own shares to improve the tradable share ratio, ensuring compliance with the Prime Market’s criteria. The company aims to maintain this compliance and enhance its corporate value.

The most recent analyst rating on (JP:4689) stock is a Buy with a Yen585.00 price target. To see the full list of analyst forecasts on LY Corporation stock, see the JP:4689 Stock Forecast page.

LY Corporation Announces Director Reappointments
May 16, 2025

LY Corporation has announced the reappointment of its directors, including key figures such as Chairperson Kentaro Kawabe and CEO Takeshi Idezawa, as decided in the recent Board of Directors meeting. This move, to be confirmed at the upcoming Ordinary General Meeting of Shareholders, reflects the company’s commitment to maintaining its current leadership structure, which may provide stability and continuity in its operations and strategic direction.

The most recent analyst rating on (JP:4689) stock is a Buy with a Yen585.00 price target. To see the full list of analyst forecasts on LY Corporation stock, see the JP:4689 Stock Forecast page.

LY Corporation Announces Dividend Payment for Fiscal Year 2025
May 16, 2025

LY Corporation announced a dividend payment of JPY7.00 per share for the fiscal year ending March 31, 2025, amounting to a total of JPY50.0 billion. This decision aligns with their policy to maintain a cumulative total payout ratio of 70% or more over the next five years, reflecting a commitment to balancing shareholder returns with strategic investments.

The most recent analyst rating on (JP:4689) stock is a Buy with a Yen585.00 price target. To see the full list of analyst forecasts on LY Corporation stock, see the JP:4689 Stock Forecast page.

LY Corporation Announces Strategic Merger with Z Financial
May 16, 2025

LY Corporation has announced the absorption-type merger of its wholly owned subsidiary, Z Financial Corporation, effective August 1, 2025. This strategic move aims to optimize the group’s resources by dissolving Z Financial Corporation, which serves as an intermediate holding company for LY Corporation’s domestic financial business areas. The merger is expected to streamline operations and enhance the company’s market positioning.

The most recent analyst rating on (JP:4689) stock is a Buy with a Yen585.00 price target. To see the full list of analyst forecasts on LY Corporation stock, see the JP:4689 Stock Forecast page.

LY Corporation Completes Acquisition of BEENOS Inc. Shares
May 8, 2025

LY Corporation has successfully completed a tender offer to acquire shares and share options of BEENOS Inc., a company listed on the Tokyo Stock Exchange Prime Market. This acquisition, finalized on May 7, 2025, is expected to strengthen LY Corporation’s market presence and strategic positioning, potentially impacting stakeholders by expanding its influence in the industry.

LY Corporation Reports Record Growth in FY2024 Results
May 7, 2025

LY Corporation reported significant growth in its consolidated and non-consolidated business results for FY2024 compared to FY2023, driven by increased revenue from strategic business operations and a successful intra-group reorganization. The company’s revenue reached a record high, supported by the expansion of PayPay’s consolidated revenue and growth in media and commerce businesses. This performance underscores LY Corporation’s strengthened market position and positive outlook for stakeholders.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 06, 2025