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KDDI
(9433)
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Rating:67Neutral
Price Target:
¥3,148.00
▲(7.72% Upside)
Action:Reiterated
Date:08/07/26
The score is driven primarily by steady but moderating financial quality (profitability and cash flow remain solid, but leverage has risen sharply and recent growth/FCF momentum softened). Technicals add support with the stock trading above major moving averages and neutral momentum. Valuation is reasonable with a moderate dividend. The latest earnings call was a net positive on Q1 performance and KPI strength, tempered by roaming-contract uncertainty, financial business volatility, and security/regulatory risk.
Positive Factors
Improving Mobile KPIs
Rising ARPU, lower churn and net additions signal stronger customer monetization and retention in core mobile services. These durable improvements support recurring revenue and margin stability across the consumer base, reducing reliance on one‑off promotions over the medium term.
Negative Factors
Rising Leverage
A materially higher debt load reduces financial flexibility and raises refinancing and interest‑rate sensitivity. Increased leverage constrains the ability to pursue opportunistic investments or shareholder returns during downturns and elevates risk across a multi‑year investment program.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving Mobile KPIs
Rising ARPU, lower churn and net additions signal stronger customer monetization and retention in core mobile services. These durable improvements support recurring revenue and margin stability across the consumer base, reducing reliance on one‑off promotions over the medium term.
Read all positive factors
KDDI (9433) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥10.52T
Dividend Yield2.74%
Average Volume (3M)9.18M
Price to Earnings (P/E)15.5
Beta (1Y)0.29
Revenue Growth3.58%
EPS Growth11.30%
CountryJP
Employees73,198
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)188.21
Shares Outstanding4,007,451,000
10 Day Avg. Volume9,688,190
30 Day Avg. Volume9,180,513
Financial Highlights & Ratios
PEG Ratio1.12
Price to Book (P/B)1.86
Price to Sales (P/S)1.61
P/FCF Ratio9.97
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥1,865.00Price Target Upside-36.18% Downside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)196.6
Revenue Forecast (FY)¥6.36T
KDDI Business Overview & Revenue Model
Company Description
KDDI Corporation operates as a leading telecommunications company, serving customers in Japan and across international markets. Its diverse operations are structured into two primary segments: Personal Services and Business Services. The Personal ...
How the Company Makes Money
KDDI primarily makes money by selling telecommunications connectivity and related services to consumers and enterprises. Key revenue streams include: (1) Mobile services: recurring monthly fees from individual and corporate customers for smartphon...
KDDI Earnings Call Summary
Earnings Call Date:Aug 07, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The earnings call conveyed a generally positive operational and financial performance for Q1 — with solid revenue and profit growth, improving mobile KPIs (ARPU, churn, active smartphones), strong momentum in AI/cloud/Data Center businesses, disciplined promotional spend, and meaningful divestment activity to fund growth. Key near‑term negatives include a decline in Financial Business profit driven by mark‑to‑market losses and liquidity management, the imminent termination of the Rakuten roaming agreement (Q1 impact ~JPY 800m and uncertain second‑half effect), a security incident prompting regulatory guidance, and cost pressures in the device business. Management maintained a conservative full‑year outlook despite Q1 outperformance and signaled disciplined capital allocation for large planned investments in AI and cloud.Positive Updates
Revenue and Profit Growth
Operating revenue +5.1% year‑on‑year with progress vs full‑year forecast at 23.2%; adjusted operating income +21.1% YoY (progress ~26%); adjusted net income +21.6% YoY (progress ~26.5%).
Negative Updates
Financial Business Profit Decline and Valuation Losses
Au Financial Holdings operating income down JPY 3.7 billion YoY in Q1. Mark‑to‑market valuation losses related to rising long‑term interest rates were roughly JPY 2.4 billion and deposit gathering / liquidity control constrained housing loan growth and margins in the near term.
Read all updates
Q1-2027 Updates
Positive
Negative
Revenue and Profit Growth
Operating revenue +5.1% year‑on‑year with progress vs full‑year forecast at 23.2%; adjusted operating income +21.1% YoY (progress ~26%); adjusted net income +21.6% YoY (progress ~26.5%).
Read all positive updates
Company Guidance
KDDI reaffirmed its full‑year target of JPY 1,210 billion in operating revenue after a strong Q1 start: operating revenue +5.1% YoY (progress vs FY forecast 23.2%), adjusted operating income +21.1% (26% progress) and adjusted net income +21.6% (26.5% progress). Key KPIs: 33.3 million active smartphones (+390k YoY), churn 1.17% (‑0.06 ppt YoY) and mobile ARPU JPY 4,400 (+JPY 160, +3.8%). Segment results included Personal Growth OP +9.3% YoY and Business Growth OP +21.6% YoY; AI & cybersecurity revenue +19.2% YoY, cloud revenue >30% YoY, Connectivity/Data Center revenue +20.6% YoY with Data Center EBITDA margin >40% (adjusted OP JPY 6.9bn, +JPY 0.7bn YoY). Financial business OP was down JPY 3.7bn (including roughly JPY 2.4bn mark‑to‑market losses), Rakuten roaming reduced Q1 revenue by about JPY 0.8bn and the roaming contract ends end‑September (limited rural cooperation to continue and post‑Sept revenue conservatively not assumed). Balance sheet and capital priorities: operating cash flow margin 21.6%, 11 divestments announced raising ~JPY 150bn, and a JPY 1 trillion growth investment envelope over three years (organic CapEx targeted around 12% of sales); management will continue strategic investment while aiming to deliver the full‑year forecast.KDDI Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
58
Neutral
Cash Flow
63
Positive
| Breakdown | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.07T | 5.92T | 5.75T | 5.67T | 5.45T |
| Gross Profit | 2.59T | 2.51T | 2.43T | 2.41T | 2.46T |
| EBITDA | 1.84T | 1.78T | 1.62T | 1.71T | 1.78T |
| Net Income | 707.11B | 685.68B | 637.87B | 679.11B | 672.49B |
Balance Sheet | |||||
| Total Assets | 19.06T | 16.88T | 14.15T | 11.92T | 11.08T |
| Cash, Cash Equivalents and Short-Term Investments | 1.08T | 944.14B | 907.73B | 504.62B | 819.05B |
| Total Debt | 5.38T | 4.69T | 2.66T | 1.66T | 1.74T |
| Total Liabilities | 13.47T | 11.23T | 8.35T | 6.25T | 5.57T |
| Stockholders Equity | 5.08T | 5.13T | 5.25T | 5.13T | 4.98T |
Cash Flow | |||||
| Free Cash Flow | 1.21T | 958.47B | 1.12T | 834.45B | 1.04T |
| Operating Cash Flow | 1.61T | 1.36T | 1.64T | 1.23T | 1.47T |
| Investing Cash Flow | -1.09T | -1.28T | -820.24B | -739.43B | -767.35B |
| Financing Cash Flow | -544.46B | -5.76B | -462.97B | -671.76B | -721.50B |
KDDI Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | ¥357.04B | 25.58 | 13.57% | 1.74% | 3.09% | 12.81% | |
74 Outperform | ¥631.41B | 25.66 | 16.08% | 1.12% | 9.02% | 21.15% | |
67 Neutral | ¥10.52T | 15.52 | 14.41% | 2.71% | 3.58% | 11.30% | |
66 Neutral | ¥10.67T | 19.70 | ― | 3.88% | 7.55% | 3.35% | |
63 Neutral | ¥19.02B | 24.84 | ― | ― | 25.92% | -10.51% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
57 Neutral | ¥12.99T | 12.10 | 10.96% | 3.50% | 5.14% | 5.33% |
* Communication Services Sector Average
JP:9433
KDDI
2,981.00
481.49
19.26%
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KDDI Corporate Events
KDDI Delivers Stable Q1 FY2027.3 Results With Solid Cash Flow and Investment Capacity
Aug 7, 2026
KDDI reported consolidated results for the first quarter of the fiscal year ending March 2027, showing continued growth in operating revenue and adjusted operating income, along with solid adjusted EBITDA and margins. The group also highlighted a ...
KDDI Delivers Strong Q1 Earnings and Confirms Full-Year Outlook
Aug 7, 2026
KDDI reported strong results for the three months to June 30, 2026, with operating revenue rising 5.1% year on year to ¥1.49 trillion and operating income jumping 21.1% to ¥314.2 billion. Profit attributable to owners of the parent climb...
KDDI Advances Large-Scale Share Buyback, Repurchasing Over 111 Million Shares
Aug 7, 2026
KDDI Corporation has disclosed the latest status of its ongoing share repurchase program authorized by its board in May 2026. Between August 1 and August 6, 2026, the company bought back 830,000 common shares for approximately ¥2.37 billion, ...
KDDI to Dispose of Treasury Stock for Performance-Linked Executive Share Plan
Aug 7, 2026
KDDI will dispose of 1,243,000 shares of its treasury stock on August 27, 2026, at ¥2,886 per share, for a total of about ¥3.59 billion, allocating the shares to The Master Trust Bank of Japan under an executive compensation BIP Trust. T...
KDDI Accelerates Share Buybacks Under ¥300 Billion Program
Aug 6, 2026
KDDI Corporation has been actively executing a share repurchase program authorized by its board, targeting up to 146 million common shares or 3.83% of its outstanding stock for a maximum of 300 billion yen by January 2027. This capital allocation ...
KDDI Reports No Share Repurchases Under Current Buyback Authorization
Jul 6, 2026
KDDI reported that it did not repurchase any of its common shares during the period from June 1 to June 30, 2026, despite having an existing authorization from its board. The current buyback program, approved on May 12, 2026, allows KDDI to repurc...
KDDI Flags Material Internal Control Weaknesses After Fictitious Transactions at Subsidiaries
Jun 25, 2026
KDDI has disclosed that its internal control over financial reporting is currently ineffective due to material weaknesses uncovered at its consolidated subsidiary BIGLOBE and its unit G-PLAN. An internal probe and a special investigation committee...
KDDI Completes Tender Offer Share Buyback at ¥2,325 Per Share
Jun 10, 2026
KDDI has completed a tender offer to repurchase its own ordinary shares as part of a broader treasury share buyback program authorized by its board on May 12, 2026. The tender offer, conducted between May 13 and June 9 at a price of 2,325 yen per ...
KDDI Reports No Share Repurchases Yet Under ¥300 Billion Buyback Plan
Jun 4, 2026
KDDI said it did not repurchase any of its common shares between May 13 and May 31, 2026, under the share buyback framework authorized by its board. The resolution permits buybacks of up to 146 million shares, or 3.83% of shares outstanding exclud...
KDDI Files Improvement Report to TSE After Correcting Past Financial Disclosures
Jun 2, 2026
KDDI has submitted an Improvement Report to the Tokyo Stock Exchange, responding to an April 30, 2026 request related to corrections of its past Annual Securities Reports and financial statements. The move signals regulatory scrutiny of the compan...
KDDI Begins Preparations to List au Financial Holdings on Tokyo Stock Exchange
May 12, 2026
KDDI has resolved to begin preparations for the listing of its consolidated subsidiary au Financial Holdings on the Tokyo Stock Exchange, aiming to support the medium- to long-term expansion of its financial business. The company plans to keep lev...
KDDI to Cancel Over 180 Million Treasury Shares in Capital Policy Move
May 12, 2026
KDDI CORPORATION has resolved to cancel 180,396,507 shares of its common stock, representing 4.31% of its total issued shares before cancellation. The cancellation, scheduled for May 29, 2026, will reduce the total number of issued shares to 4,007...
KDDI launches new share buyback and tender offer to bolster capital efficiency
May 12, 2026
KDDI has approved a new share repurchase program, including a tender offer for its own shares, as part of a capital allocation strategy that emphasizes higher capital efficiency and enhanced shareholder returns. The move aligns with its mid-term m...
KDDI to Revamp and Expand Performance-Linked Stock Plan for Executives
May 12, 2026
KDDI plans to continue and partially revise its performance-linked stock compensation plan for directors and senior executives, subject to shareholder approval at the June 17, 2026 annual meeting. The scheme, based on a Board Incentive Plan trust ...
KDDI Posts Solid FY2026 Results and Strengthens Balance Sheet
May 12, 2026
KDDI reported consolidated financial results for the fiscal year ended March 2026, highlighting steady operating revenue growth alongside solid EBITDA and operating margins, despite some quarterly volatility. The company also detailed its financia...
KDDI Hits Mid-Term EPS Target on Strong Underlying Profit Growth in FY2026
May 12, 2026
KDDI reported consolidated results for the fiscal year ended March 2026, with operating revenue rising 4.1% to ¥6,071.9 billion and operating income climbing 6.0% to ¥1,164.3 billion. Profit attributable to owners of the parent reached &...
KDDI lifts earnings and cash reserves, signals steady growth for FY2027
May 12, 2026
KDDI reported a 4.1% increase in operating revenue to ¥6.07 trillion for the fiscal year ended March 31, 2026, with operating income edging up 1.1% and profit attributable to owners of the parent rising 7.9%. Earnings per share climbed to ...
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.