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KDDI Corporation (JP:9433)
:9433
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KDDI (9433) AI Stock Analysis

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JP:9433

KDDI

(OTC:9433)

Rating:80Outperform
Price Target:
¥2,850.00
▲(14.11%Upside)
KDDI's strong financial performance and reasonable valuation underpin its positive stock score. Earnings call insights further support this with steady revenue growth and strategic advancements. Technical analysis suggests a neutral market stance, highlighting the need for close monitoring of market conditions.
Positive Factors
Earnings
A 9.3% increase in earnings per share was supported by a significant ¥400 billion share buyback.
Financial Performance
KDDI’s Q4 operating profit exceeded expectations, driven by strong growth in Business Services and Personal Services.
Negative Factors
Guidance
FY3/26 earnings guidance is below consensus expectations, raising concerns about future performance.
Sector Growth
The Japanese telecom sector is generally considered an ex-growth sector, which may limit future expansion opportunities.

KDDI (9433) vs. iShares MSCI Japan ETF (EWJ)

KDDI Business Overview & Revenue Model

Company DescriptionKDDI Corporation is a leading Japanese telecommunications company, providing a wide range of services including mobile and fixed-line communications. Operating under the popular 'au' brand, it offers mobile phone services, broadband internet, and other value-added services. The company also engages in data center operations, network solutions for businesses, and international telecommunications services, positioning itself as a comprehensive provider in the telecommunications and IT sectors.
How the Company Makes MoneyKDDI generates revenue primarily through its telecommunications services. The mobile segment is the largest contributor, with earnings derived from subscription fees, data packages, and value-added services. Additionally, KDDI's fixed-line services, including internet and broadband offerings, contribute significantly to its income. The company also earns through its enterprise solutions, providing network and IT solutions to businesses. Furthermore, KDDI's international business and data center operations supplement its revenue streams. Strategic partnerships and collaborations with tech companies and content providers enhance its service offerings and customer base, further driving its financial performance.

KDDI Earnings Call Summary

Earnings Call Date:Feb 05, 2025
(Q3-2025)
|
% Change Since: -2.37%|
Next Earnings Date:Aug 01, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook with steady growth in revenue and income, successful new plans, and strong collaborations, particularly with Lawson. However, challenges persist in terms of churn rates, specific revenue declines, and slower than expected growth in certain segments such as DX and BPO services.
Q3-2025 Updates
Positive Updates
Steady Revenue Growth
Operating revenue for the third quarter was ¥4,364.2 billion, up 2.3% year-on-year, with a progress ratio of 75.6% versus the full year forecast.
Increased Operating Income
Operating income was ¥864.6 billion, up 2.0% year-on-year, with a progress ratio of 77.9%.
Growth in Personal Services
Total ARPU revenues increased steadily, with communications ARPU revenues up ¥3.5 billion year-on-year and value-added ARPU revenues up ¥27.9 billion year-on-year.
Successful New Pricing Plans
Introduction of competitive new plans such as Komikomi Plan+ and Money Activity Plan+ recovered momentum in monthly net additions of multi-brand IDs since November.
Strong Collaboration with Lawson
Ponta Pass acquisitions increased by about 20% quarter-on-quarter since launch in October, contributing to Lawson's daily sales increase by 3.4% year-on-year.
Investment in AI and DX
Decided to introduce NVIDIA's latest GPU to meet growing demand, furthering AI service preparations and accelerating customers' digitalization through WAKON-CROSS.
Negative Updates
Increased Churn Rate
Despite steady smartphone subscription growth, intensified competition led to an increased multi-brand churn rate, although au churn rate remained low.
Decline in Rakuten Roaming Revenue
Group MVNO and Rakuten roaming revenues were down ¥12.2 billion year-on-year.
Challenges in Business Services Segment
The DX market faced sluggish growth, and BPO services declined partly due to rapid digitalization and AI impact.
Energy and Financial Business Constraints
While showing growth, the financial and energy businesses faced limitations in scaling as quickly as anticipated.
Company Guidance
In the call, KDDI provided guidance for its financial performance in the third quarter of the fiscal year ending March 2025. The company reported consolidated operating revenue of ¥4,364.2 billion, reflecting a 2.3% year-on-year increase, with a progress ratio of 75.6% against the full-year forecast. Operating income rose by 2.0% year-on-year to ¥864.6 billion, achieving a 77.9% progress ratio. Net income, excluding temporary impacts from subsidiary reorganizations, increased by 0.6% year-on-year, with a progress ratio of 77.8%. Key factors for the growth in operating income included steady increases in communications ARPU revenues and strong performances in finance, energy, and DX businesses, as well as Lawson's contributions. Specifically, communications ARPU revenues grew by ¥3.5 billion year-on-year, financial and energy businesses combined contributed an additional ¥12.6 billion, and Lawson's equity method accounted income was up by ¥18.2 billion. The company also noted a positive trajectory for its multi-brand ID monthly net additions since November, driven by new pricing plans such as the Komikomi Plan+ and Money Activity Plan+.

KDDI Financial Statement Overview

Summary
KDDI displays strong financial health with consistent revenue growth, effective cost management, and a stable balance sheet. However, there is room for improvement in net income growth and free cash flow optimization.
Income Statement
88
Very Positive
KDDI has demonstrated consistent revenue growth with a notable increase in total revenue from prior years. The gross profit margin remains strong, suggesting effective cost management. The EBIT and EBITDA margins indicate robust operational efficiency. However, the net profit margin, while healthy, shows limited growth, which could be improved.
Balance Sheet
82
Very Positive
The balance sheet reflects a stable financial position with a reasonable debt-to-equity ratio, indicating prudent leverage. The return on equity is strong, showcasing effective use of shareholder funds. The equity ratio suggests a balanced capital structure, though there is room for reducing debt further to enhance financial stability.
Cash Flow
78
Positive
Cash flow analysis reveals sound operational cash generation, with a solid operating cash flow to net income ratio. The free cash flow has shown growth, though capital expenditures remain high, impacting free cash flow growth potential. A balanced approach to managing investing and financing activities would strengthen cash flow performance.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.92T5.75T5.67T5.45T5.31T
Gross Profit2.51T2.43T2.41T2.46T2.38T
EBITDA1.79T1.68T1.71T1.78T1.77T
Net Income685.68B637.87B679.11B672.49B651.50B
Balance Sheet
Total Assets16.88T14.15T11.92T11.08T10.54T
Cash, Cash Equivalents and Short-Term Investments921.17B887.21B844.97B819.05B1.11T
Total Debt4.44T2.43T1.65T1.74T1.76T
Total Liabilities11.23T8.35T6.25T5.57T5.28T
Stockholders Equity5.13T5.25T5.12T4.98T4.76T
Cash Flow
Free Cash Flow958.47B956.97B444.74B793.08B1.06T
Operating Cash Flow1.36T1.71T1.08T1.47T1.68T
Investing Cash Flow-1.28T-832.43B-732.48B-761.59B-658.92B
Financing Cash Flow-5.76B-476.48B-669.84B-727.26B-585.57B

KDDI Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2497.50
Price Trends
50DMA
2463.35
Positive
100DMA
2459.10
Positive
200DMA
2437.21
Positive
Market Momentum
MACD
3.66
Negative
RSI
60.46
Neutral
STOCH
73.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9433, the sentiment is Positive. The current price of 2497.5 is above the 20-day moving average (MA) of 2454.75, above the 50-day MA of 2463.35, and above the 200-day MA of 2437.21, indicating a bullish trend. The MACD of 3.66 indicates Negative momentum. The RSI at 60.46 is Neutral, neither overbought nor oversold. The STOCH value of 73.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9433.

KDDI Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$9.50T14.6413.04%4.28%2.85%12.58%
77
Outperform
¥10.44T19.88
3.91%7.57%6.30%
76
Outperform
¥235.69B19.3113.98%2.48%8.11%6.49%
75
Outperform
$13.02T12.709.84%3.42%2.47%-20.92%
66
Neutral
$17.77T15.1410.28%0.36%7.21%
66
Neutral
¥382.85B14.982.24%2.39%5.42%-14.79%
60
Neutral
¥478.40B23.7614.78%1.32%14.76%0.69%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:9433
KDDI
2,512.00
309.34
14.04%
JP:9434
SoftBank Corp.
218.20
30.12
16.01%
JP:9436
Okinawa Cellular Telephone Company
5,120.00
1,248.06
32.23%
JP:3774
Internet Initiative Japan
2,683.00
176.51
7.04%
JP:9432
Nippon Telegraph and Telephone
152.10
-2.14
-1.38%
JP:9984
SoftBank Group
12,205.00
2,870.88
30.76%

KDDI Corporate Events

KDDI Announces No Share Repurchases in June 2025
Jul 4, 2025

KDDI Corporation announced that no shares were repurchased during the specified period from June 1 to June 30, 2025, despite a prior resolution allowing for the repurchase of up to 196 million shares. This indicates a pause or delay in the company’s share repurchase strategy, which could impact its financial strategies and shareholder value.

The most recent analyst rating on (JP:9433) stock is a Sell with a Yen3730.00 price target. To see the full list of analyst forecasts on KDDI stock, see the JP:9433 Stock Forecast page.

KDDI Reports No Share Repurchases in May 2025
Jun 5, 2025

KDDI Corporation announced that no shares were repurchased during the period from May 15 to May 31, 2025, despite a board resolution allowing for the repurchase of up to 196 million shares at a cost of up to 400 billion yen. This lack of repurchase activity may impact the company’s stock market strategy and investor relations, as share buybacks are often used to enhance shareholder value and signal confidence in the company’s financial health.

The most recent analyst rating on (JP:9433) stock is a Hold with a Yen4920.00 price target. To see the full list of analyst forecasts on KDDI stock, see the JP:9433 Stock Forecast page.

KDDI Announces Strategic Cancellation of Treasury Stock
May 14, 2025

KDDI Corporation announced the cancellation of a portion of its treasury stock, amounting to 195,845,358 shares or 4.47% of the total issued shares, as part of its strategic financial management. This move is expected to optimize the company’s capital structure and potentially enhance shareholder value by reducing the number of outstanding shares, which could positively impact the company’s stock performance.

The most recent analyst rating on (JP:9433) stock is a Sell with a Yen3730.00 price target. To see the full list of analyst forecasts on KDDI stock, see the JP:9433 Stock Forecast page.

KDDI Announces Treasury Share Repurchase to Boost Shareholder Returns
May 14, 2025

KDDI has announced a repurchase of treasury shares through a tender offer, as part of its strategy to enhance shareholder returns and support sustainable growth. This move aligns with KDDI’s Mid-Term Management Strategy and Satellite Growth Strategy, which focus on business transformation centered on 5G, generative AI, and data-driven management, aiming to strengthen profit growth and shareholder returns.

The most recent analyst rating on (JP:9433) stock is a Sell with a Yen3730.00 price target. To see the full list of analyst forecasts on KDDI stock, see the JP:9433 Stock Forecast page.

KDDI Proposes Revisions to Executive Compensation Plan
May 14, 2025

KDDI Corporation announced a proposal to continue and partially revise its performance-linked stock compensation plan for directors and executives, aiming to strengthen the connection between executive compensation and the company’s performance and share price. The proposed changes, contingent on shareholder approval, include extending the target period and increasing the total contribution to the trust, reflecting KDDI’s commitment to aligning executive incentives with its medium-term management strategy.

The most recent analyst rating on (JP:9433) stock is a Sell with a Yen3730.00 price target. To see the full list of analyst forecasts on KDDI stock, see the JP:9433 Stock Forecast page.

KDDI Proposes Amendments to Articles of Incorporation for Business Expansion
May 14, 2025

KDDI Corporation has announced a proposal to amend its Articles of Incorporation to expand its business purposes, which will be presented for approval at the upcoming Annual Meeting of Shareholders. The changes aim to prepare the company for future business expansion, particularly in information and communication technology services, and include the addition of fee-charging employment placement services.

The most recent analyst rating on (JP:9433) stock is a Sell with a Yen3730.00 price target. To see the full list of analyst forecasts on KDDI stock, see the JP:9433 Stock Forecast page.

KDDI Reports Strong Financial Results for Fiscal Year 2025
May 14, 2025

KDDI Corporation reported its financial results for the fiscal year ending March 31, 2025, showing a notable increase in operating income by 16.3% and profit for the period by 16.8% compared to the previous year. The company also conducted a two-for-one stock split on April 1, 2025, which affected earnings per share calculations. The financial results reflect a strong performance, with increased revenue and profitability, positioning KDDI favorably in the telecommunications industry. The announcement also included plans for dividend payments and a forecast for the next fiscal year, indicating continued growth expectations.

The most recent analyst rating on (JP:9433) stock is a Sell with a Yen3730.00 price target. To see the full list of analyst forecasts on KDDI stock, see the JP:9433 Stock Forecast page.

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.Date of analysis: Jul 24, 2025