Digital Garage (4819) AI Stock Analysis

• Market Cap: $216.96B
• Dividend Yield: 1.2%
• Average Volume (3M): 106.72K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.77
• Revenue Growth: 18.11%
• EPS Growth: -212.45%
• Country: JP
• Employees: 1,087
• Sector: Technology
• Sector Strength: 65
• Industry: Information Technology Services
• EPS (TTM): -81.04
• Shares Outstanding: 47,650,900
• 10 Day Avg. Volume: 71,940
• 30 Day Avg. Volume: 106,716
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Digital Garage's overall score of 56 reflects a challenging financial and operational environment. The company's strengths include robust cash flow and liquidity, providing some stability. However, the negative profitability and minimal growth are significant concerns. Technical analysis suggests potential resistance in the short term, and the unattractive valuation due to negative earnings further weighs on the stock's prospects.

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 its diverse business segments. The marketing segment provides digital marketing services and solutions, earning revenue from clients using these services to enhance their online presence and advertising effectiveness. The fintech segment includes payment solutions and financial services, generating income through transaction fees and service charges. Additionally, the incubation segment invests in and supports startups, potentially earning returns through equity stakes and successful exits. Strategic partnerships and collaborations with other technology and financial firms also play a crucial role in expanding their market reach and revenue generation.

Digital Garage Financial Statement Overview

Summary

Digital Garage shows a mixed financial picture. While they maintain a strong cash position and moderate leverage, profitability and growth remain areas of concern. Operational inefficiencies are evident from negative EBIT and EBITDA margins, and recent revenue stagnation suggests growth challenges. The strong free cash flow and liquidity, however, offer some stability and potential for future improvement.

Income Statement

The company has experienced fluctuating revenue with a recent decline, indicating instability. The TTM data shows a negative net profit margin of -12.14%, which raises concerns about profitability. Gross profit margin remains fairly strong at 26.13%, but negative EBIT and EBITDA margins highlight operational challenges. The revenue growth rate from the last annual report to TTM is a mere 1.02%, suggesting minimal top-line expansion.

Balance Sheet

Digital Garage maintains a solid equity base with an equity ratio of 30.56% TTM. The debt-to-equity ratio of 0.79 TTM suggests moderate leverage, but the declining return on equity from previous years indicates diminishing returns. The balance sheet reflects strong liquidity with substantial cash reserves, which is a positive indicator of financial stability.

Cash Flow

The company's cash flow position shows improvement in free cash flow, with a notable positive change from the previous year. The operating cash flow to net income ratio is misleading due to negative net income, yet the operating cash flow itself is robust, supporting operational needs. The company’s ability to generate free cash flow is a strength, providing flexibility in capital allocation.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
31.38B	30.07B	72.95B	40.48B	36.94B
	Gross Profit
20.70B	19.98B	62.44B	29.78B	24.90B
	EBIT
2.84B	2.61B	45.74B	14.63B	10.39B
	EBITDA
10.30B	-5.31B	31.50B	14.79B	7.56B
	Net Income Common Stockholders
5.81B	-9.32B	30.33B	9.79B	7.42B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
119.42B	121.29B	121.64B	86.07B	70.57B
	Total Assets
231.43B	216.27B	231.61B	178.30B	162.30B
	Total Debt
67.34B	52.70B	49.93B	45.62B	43.17B
	Net Debt
17.77B	-633.00M	6.52B	7.63B	10.47B
	Total Liabilities
139.29B	134.19B	134.39B	115.22B	109.50B
	Stockholders Equity
89.25B	80.14B	95.74B	62.13B	52.03B
Cash Flow		Free Cash Flow
-13.95B	11.29B	4.20B	3.84B	-17.57B
	Operating Cash Flow
-11.03B	13.47B	7.06B	7.05B	-12.32B
	Investing Cash Flow
-8.76B	1.63B	-7.98B	-864.00M	-5.47B
	Financing Cash Flow
15.93B	-5.21B	6.24B	-914.00M	2.36B

Digital Garage Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4685.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 4685 is above the 20-day moving average (MA) of 4445.25, above the 50-day MA of 4510.04, and above the 200-day MA of 3610.40, indicating a bullish trend. The MACD of 29.73 indicates Negative momentum. The RSI at 60.09 is Neutral, neither overbought nor oversold. The STOCH value of 70.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:4819.

Digital Garage Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4689	71 Outperform	¥3.75T	33.18		1.30%	6.51%	-0.45%
4816	67 Neutral	¥683.10B	31.68		0.95%	5.28%	11.13%
Sector *	60 Neutral	$10.96B	10.28	-6.73%	2.97%	7.74%	-12.45%
4819	56 Neutral	$216.96B	―	-5.12%	1.20%	18.11%	-212.45%