Digital Garage (4819) AI Stock Analysis

• Market Cap: $151.83B
• Dividend Yield: 1.69%
• Average Volume (3M): 127.34K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.76
• Revenue Growth: 19.61%
• EPS Growth: N/A
• Country: JP
• Employees: 1,087
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): N/A
• Shares Outstanding: 47,701,134
• 10 Day Avg. Volume: 124,770
• 30 Day Avg. Volume: 127,340
• PEG Ratio: 0.13
• Price to Book (P/B): 2.83
• Price to Sales (P/S): 6.63
• P/FCF Ratio: 12.71
• Enterprise Value/Market Cap: 0.67
• Enterprise Value/Revenue: 3.23
• Enterprise Value/Gross Profit: 19.91
• Enterprise Value/Ebitda: -18.58
• 1Y Price Target: $4,395.45
• Price Target Upside: 36.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 46 Neutral
• Price Target: ¥3,205.00 ▼(-0.16% Downside)

The overall stock score is primarily impacted by weak financial performance and bearish technical indicators. The negative P/E ratio and moderate dividend yield further contribute to valuation concerns. Stabilizing financials and improving technical momentum are necessary for a better outlook.

Positive Factors

Revenue Growth

A revenue growth rate of 25.3% suggests strong market demand and effective business strategies, supporting long-term expansion.

Cash Flow Improvement

Improved operating cash flow enhances financial flexibility, allowing for reinvestment and debt reduction, supporting sustainable growth.

Diverse Revenue Streams

Diverse revenue streams from digital marketing and fintech reduce dependency on a single market, enhancing resilience to industry changes.

Negative Factors

High Leverage

High leverage increases financial risk, potentially limiting the company's ability to invest in growth opportunities or weather downturns.

Income Statement Volatility

Volatility in financial performance and negative margins indicate operational inefficiencies, challenging consistent profitability.

Gross Profit Margin Decline

Declining gross profit margins suggest cost management issues, which could erode profitability if not addressed.

Digital Garage Business Overview & Revenue Model

Company Description

Digital Garage, Inc. operates as a context company in Japan and internationally. The company operates through Financial Technology, Marketing Technology, Incubation Technology, and Long-term Incubation segments. The Financial Technology segment provides payment platforms, including credit card payment, convenience store payment, and QR code payment systems. The Marketing Technology segment provides marketing solutions that integrate digital and real solutions. The Incubation Technology segment invests in early-stage startups company. The Long-term Incubation segment provides medium to long term cash inflows. Digital Garage, Inc. was incorporated in 1995 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Digital Garage generates revenue through multiple streams, primarily by offering digital marketing services, which include SEO, SEM, and social media marketing to businesses seeking to improve their online visibility. Additionally, the company earns income from its fintech solutions, such as online payment processing and financial technology services. Key partnerships with e-commerce platforms and tech firms enhance its service offerings and expand its reach, while subscription-based models for its software and analytics tools provide a steady income. Furthermore, Digital Garage may benefit from performance-based revenue models where they earn commissions or fees based on the success of their marketing campaigns.

Digital Garage Financial Statement Overview

Summary

Digital Garage's financial performance is mixed. Positive cash flow developments are overshadowed by income statement volatility and high leverage, indicating financial risks. Stabilizing revenue and improving cost efficiency are crucial for future profitability.

Income Statement

The company has experienced volatility in its financial performance. Gross profit margin has decreased over the years, highlighting cost management challenges. The net profit margin is negative in the latest period, indicating recent operational inefficiencies. Revenue growth has been inconsistent, with recent declines, suggesting potential market challenges.

Balance Sheet

The balance sheet shows a reasonable equity ratio, indicating some level of asset financing through equity, which is a positive sign. However, high debt-to-equity levels in recent years highlight significant leverage, posing potential financial risk. Return on equity has been unstable due to fluctuating net income.

Cash Flow

Cash flow analysis reveals a strong turnaround in operating cash flow in the latest year, suggesting improved cash generation capacity. Free cash flow has also turned positive, which is a positive indicator for financial flexibility. However, the cash flow to net income ratios have been inconsistent, indicating potential cash flow management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	31.29B	32.20B	31.38B	30.07B	72.95B	40.48B
Gross Profit	5.07B	19.25B	20.70B	19.98B	62.44B	29.78B
EBITDA	-5.44B	-5.69B	10.30B	-5.31B	31.50B	14.79B
Net Income	-11.03B	-7.19B	5.81B	-9.32B	30.33B	9.79B
Balance Sheet
Total Assets	212.00B	226.34B	231.43B	216.27B	231.61B	178.30B
Cash, Cash Equivalents and Short-Term Investments	50.29B	111.29B	119.42B	121.29B	121.64B	86.07B
Total Debt	60.43B	61.63B	67.34B	52.70B	49.93B	45.62B
Total Liabilities	137.73B	148.65B	139.29B	134.19B	134.39B	115.22B
Stockholders Equity	72.09B	75.42B	89.25B	80.14B	95.74B	62.13B
Cash Flow
Free Cash Flow	9.53B	16.79B	-13.95B	11.29B	4.20B	3.84B
Operating Cash Flow	10.07B	17.39B	-11.03B	13.47B	7.06B	7.05B
Investing Cash Flow	-8.24B	-10.04B	-8.76B	1.63B	-7.98B	-864.00M
Financing Cash Flow	-14.99B	-14.92B	15.93B	-5.21B	6.24B	-914.00M

Digital Garage Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3210.00
• 50DMA: Negative
• 100DMA: Negative
• 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:4819, the sentiment is Neutral. The current price of 3210 is above the 20-day moving average (MA) of 3182.00, below the 50-day MA of 3400.60, and below the 200-day MA of 4080.01, indicating a neutral trend. The MACD of -61.70 indicates Negative momentum. The RSI at 48.41 is Neutral, neither overbought nor oversold. The STOCH value of 80.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:4819.

Digital Garage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2317	76 Outperform	¥193.15B	18.58	―	2.36%	13.82%	37.07%
9715	75 Outperform	$139.40B	10.17	11.52%	2.90%	4.00%	38.72%
4722	73 Outperform	¥188.65B	18.46	―	2.11%	9.29%	1.18%
3636	71 Outperform	¥79.08B	12.32	―	3.30%	5.28%	28.90%
9682	66 Neutral	$189.79B	16.72	18.89%	2.63%	11.90%	60.66%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4819	46 Neutral	$151.83B	-13.95	4.18%	1.69%	19.61%	―