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LY Corporation (JP:4689)
:4689
Japanese Market

LY Corporation (4689) AI Stock Analysis

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JP

LY Corporation

(4689)

Rating:78Outperform
Price Target:
¥604.00
▲(13.96%Upside)
LY Corporation's strong financial performance and positive earnings call guidance are the primary drivers of its overall stock score. The company exhibits robust revenue and profit growth, efficient cost management, and strategic focus on emerging technologies. While technical indicators are mixed, the stock's valuation is reasonable. However, challenges in advertising and costs associated with AI investments should be monitored.

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 Moneynull

LY Corporation Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q4-2024)
|
% Change Since: -0.71%|
Next Earnings Date:Aug 01, 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 demonstrates strong financial health with solid revenue growth and profitability metrics. The balance sheet reflects a well-capitalized structure with manageable debt levels. Cash flow performance is robust, indicating efficient operations and cash conversion. While profitability metrics are strong, return on equity suggests potential for further improvement.
Income Statement
88
Very Positive
LY Corporation shows robust revenue growth with a 7.7% increase TTM (Trailing-Twelve-Months) compared to the previous year. Gross profit margin remains strong at 71.9% TTM, while net profit margin is healthy at 6.2%. EBIT and EBITDA margins are solid at 13.3% and 21.5% respectively. Overall, the company demonstrates strong profitability and growth.
Balance Sheet
82
Very Positive
The balance sheet reflects a stable financial position with an equity ratio of 31.7% TTM, indicating a healthy capital structure. The debt-to-equity ratio is manageable at 0.61, showcasing prudent leverage management. Return on equity stands at 3.95%, indicating room for improvement in generating returns from equity.
Cash Flow
79
Positive
LY Corporation exhibits strong cash flow generation with a high operating cash flow to net income ratio of 5.00 TTM. Free cash flow growth is impressive, but the free cash flow to net income ratio is 4.21, suggesting efficient conversion of income to cash. Despite fluctuations in investing cash flows, overall cash flow stability is maintained.
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
1.90T1.81T1.67T1.57T1.21T1.05T
Gross Profit
1.37T1.29T1.16T1.07T773.40B628.48B
EBIT
251.34B198.38B314.53B189.50B162.13B152.28B
EBITDA
407.82B361.30B306.81B325.25B283.52B235.69B
Net Income Common Stockholders
118.43B113.20B178.87B77.32B70.14B81.67B
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.33T1.42T1.65T1.13T1.07T880.10B
Total Assets
9.45T9.04T8.59T7.11T6.70T3.93T
Total Debt
1.82T1.88T1.91T1.67T1.39T1.09T
Net Debt
491.04B462.32B261.95B538.98B323.84B206.34B
Total Liabilities
6.04T5.60T5.27T4.13T3.71T2.89T
Stockholders Equity
2.99T3.04T2.92T2.68T2.68T771.55B
Cash FlowFree Cash Flow
498.19B245.47B-55.94B-6.32B137.18B158.15B
Operating Cash Flow
591.96B316.48B93.05B266.31B207.92B243.28B
Investing Cash Flow
-470.90B-444.06B319.79B-303.90B-12.35B-503.03B
Financing Cash Flow
-306.89B-110.80B105.79B91.63B-12.07B593.41B

LY Corporation Technical Analysis

Technical Analysis Sentiment
Positive
Last Price530.00
Price Trends
50DMA
525.25
Positive
100DMA
500.53
Positive
200DMA
454.52
Positive
Market Momentum
MACD
-0.69
Positive
RSI
53.06
Neutral
STOCH
36.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4689, the sentiment is Positive. The current price of 530 is above the 20-day moving average (MA) of 525.08, above the 50-day MA of 525.25, and above the 200-day MA of 454.52, indicating a bullish trend. The MACD of -0.69 indicates Positive momentum. The RSI at 53.06 is Neutral, neither overbought nor oversold. The STOCH value of 36.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4689.

LY Corporation Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
¥3.72T25.24
1.32%5.67%39.04%
62
Neutral
$6.88B11.322.90%3.87%2.70%-24.57%
$3.48B26.7834.91%1.86%
81
Outperform
¥363.18B27.10
16.87%1.21%
77
Outperform
¥84.13B17.17
1.19%4.92%-12.12%
76
Outperform
¥77.08B45.79
0.84%36.56%47.47%
73
Outperform
¥90.35B30.76
1.77%4.76%21.06%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:4689
LY Corporation
530.00
157.12
42.14%
KKKUF
Kakaku
17.80
5.52
44.95%
JP:3661
m-up holdings, Inc.
2,132.00
843.61
65.48%
JP:4194
Visional, Inc.
9,132.00
1,222.00
15.45%
JP:4298
Proto Corp.
2,093.00
762.43
57.30%
JP:4825
Weathernews Inc.
3,955.00
1,769.85
80.99%

LY Corporation Corporate Events

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.

LY Corporation to Boost Investment in LINE Bank Taiwan
Apr 10, 2025

LY Corporation announced plans to increase its investment in LINE Bank Taiwan Limited, making it a consolidated and specified subsidiary. This strategic move is intended to bolster the banking services of LINE Bank in Taiwan and strengthen collaboration within the LY Corporation Group, potentially impacting the company’s market position and offering enhanced services to stakeholders.

LY Corporation Submits Report on Information Leakage Prevention
Mar 31, 2025

LY Corporation has submitted a report to Japan’s Personal Information Protection Commission detailing measures to prevent a recurrence of unauthorized access that led to an information leakage. The company is committed to improving its technical and organizational safety management measures to regain trust and ensure the security of its users and stakeholders.

LY Corporation Reports to Ministry on Security Measures
Mar 31, 2025

LY Corporation has submitted a report to Japan’s Ministry of Internal Affairs and Communications following administrative guidance related to an information leakage incident due to unauthorized access. The company is actively implementing measures to enhance security governance, manage subcontractors, and improve customer support to restore trust and ensure safe service usage.

LY Corporation Addresses LINE App Error with Ministry Guidance
Mar 28, 2025

LY Corporation, a company known for its LINE app, has received administrative guidance from Japan’s Ministry of Internal Affairs and Communications due to an error in the app’s album feature that occurred in November 2024. The guidance includes implementing preventive measures, providing user support, and reporting on these actions. LY Corporation is committed to addressing the issue and ensuring user confidence in their services.

ASKUL Corporation to Repurchase and Cancel Treasury Stock
Mar 18, 2025

LY Corporation announced that its subsidiary, ASKUL Corporation, has resolved to repurchase and cancel its treasury stock. This decision aims to maximize ASKUL’s corporate value while maintaining LY Corporation’s voting rights ratio. The impact on LY Corporation’s consolidated business results is expected to be minor.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.