Digital Garage (4819) AI Stock Analysis

• Market Cap: ¥98.36B
• Dividend Yield: 1.97%
• Average Volume (3M): 127.34K
• Price to Earnings (P/E): 50.4
• Beta (1Y): 0.62
• Revenue Growth: 19.61%
• EPS Growth: N/A
• Country: JP
• Employees: 1,087
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 70.63
• Shares Outstanding: 47,714,530
• 10 Day Avg. Volume: 124,770
• 30 Day Avg. Volume: 127,340
• PEG Ratio: -0.16
• Price to Book (P/B): 1.67
• Price to Sales (P/S): 4.75
• P/FCF Ratio: -10.68
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥4,285.00
• Price Target Upside: 59.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 117.6
• Revenue Forecast (FY): ¥42.80B

• Rating: 55 Neutral
• Price Target: ¥2,356.00 ▼(-12.09% Downside)
• Action: Reiterated Date: 12/11/25
• Date: Action: Reiterated 12/11/25

Digital Garage's overall stock score reflects strong financial performance, particularly in revenue and cash flow growth, but is tempered by bearish technical indicators and a high valuation. The lack of earnings call data and corporate events further limits the score.

Positive Factors

Strong free cash flow generation

Digital Garage's 34.93% TTM free cash flow growth and ~97% FCF-to-net-income show durable cash conversion. This strong cash generation funds reinvestment in platforms, supports debt management or M&A, and provides a lasting cushion against downturns without relying on external financing.

Consistent revenue expansion

Sustained top-line growth (reported ~19.6% and 13.5% TTM metrics) indicates continued demand for the company's marketing, media and tech services. Persistent revenue expansion enhances scale economics, supports investment in product development, and helps drive medium-term profitability improvement.

Balanced capital structure

A debt-to-equity around 0.79 and a healthy equity ratio reflect moderate leverage and financial stability. This balance preserves borrowing capacity, limits refinancing risk, and gives management flexibility to fund strategic initiatives or absorb cyclical pressures over the coming months.

Negative Factors

Low net profit margin

A net margin near 9.1% limits the company's ability to convert revenue into retained earnings. Persistently low net profitability reduces buffers for investment or shocks, constrains internal capital for growth initiatives, and makes earnings more sensitive to cost or revenue fluctuations.

Declining gross profit margin

A declining gross margin signals rising COGS or pricing pressure at the core operating level. Structural gross margin erosion can compress operating and net profitability unless offset by higher pricing, improved procurement, or a shift toward higher-margin services.

Modest return on equity

ROE around 4.28% indicates limited effectiveness in converting equity into returns. Over time a modest ROE can reflect suboptimal capital allocation or low operating leverage, potentially constraining long-term shareholder value creation versus peers.

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 demonstrates strong revenue growth and cash flow performance, with stable debt levels and a healthy equity ratio. However, profitability margins, particularly the net profit margin, have room for improvement.

Income Statement

Digital Garage has shown a strong revenue growth rate of 13.52% in the TTM, indicating a positive trajectory. However, the gross profit margin has decreased from previous years, and the net profit margin remains relatively low at 9.10%. The EBIT and EBITDA margins have improved significantly in the TTM, reflecting better operational efficiency compared to the previous fiscal year.

Balance Sheet

The company's debt-to-equity ratio is stable at 0.79, indicating a balanced approach to leveraging. Return on equity has improved in the TTM but remains modest at 4.28%. The equity ratio is healthy, suggesting a solid financial structure with a good proportion of equity financing.

Cash Flow

Digital Garage has demonstrated strong free cash flow growth of 34.93% in the TTM, signaling robust cash generation capabilities. The operating cash flow to net income ratio is stable, and the free cash flow to net income ratio is high at 97.07%, indicating efficient cash management.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	34.92B	32.20B	31.38B	30.07B	72.95B	40.48B
Gross Profit	19.72B	19.25B	20.70B	19.98B	62.44B	29.78B
EBITDA	106.00M	-5.69B	10.30B	-5.31B	31.50B	14.79B
Net Income	1.93B	-7.19B	5.81B	-9.32B	30.33B	9.79B
Balance Sheet
Total Assets	228.25B	226.34B	231.43B	216.27B	231.61B	178.30B
Cash, Cash Equivalents and Short-Term Investments	111.04B	111.29B	119.42B	121.29B	121.64B	86.07B
Total Debt	61.89B	61.63B	67.34B	52.70B	49.93B	45.62B
Total Liabilities	148.21B	148.65B	139.29B	134.19B	134.39B	115.22B
Stockholders Equity	77.92B	75.42B	89.25B	80.14B	95.74B	62.13B
Cash Flow
Free Cash Flow	-15.72B	16.79B	-13.95B	11.29B	4.20B	3.84B
Operating Cash Flow	-15.46B	17.39B	-11.03B	13.47B	7.06B	7.05B
Investing Cash Flow	-6.70B	-10.04B	-8.76B	1.63B	-7.98B	-864.00M
Financing Cash Flow	-5.55B	-14.92B	15.93B	-5.21B	6.24B	-914.00M

Digital Garage Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2680.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:4819, the sentiment is Negative. The current price of 2680 is above the 20-day moving average (MA) of 2163.40, above the 50-day MA of 2452.86, and below the 200-day MA of 3455.59, indicating a bearish trend. The MACD of -136.13 indicates Negative momentum. The RSI at 43.73 is Neutral, neither overbought nor oversold. The STOCH value of 48.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:4819.

Digital Garage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3984	80 Outperform	¥26.65B	15.97	―	0.73%	17.86%	21.52%
9715	75 Outperform	¥153.08B	10.80	11.52%	2.76%	4.00%	38.72%
5574	74 Outperform	¥31.40B	56.04	―	―	29.61%	93.16%
3655	70 Outperform	¥58.97B	606.48	―	0.28%	8.64%	-23.20%
4725	65 Neutral	¥32.65B	10.11	10.34%	4.82%	-3.03%	38.83%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
4819	55 Neutral	¥98.36B	50.39	4.18%	1.97%	19.61%	―