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KDDI Corporation (JP:9433)
:9433

KDDI (9433) AI Stock Analysis

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JP

KDDI

(OTC:9433)

Rating:70Outperform
Price Target:
¥2,701.00
▲(11.34%Upside)
KDDI's strong financial performance and positive earnings outlook are offset by bearish technical signals and moderate valuation. The company's strategic initiatives and collaborations provide growth potential, but technical indicators suggest caution in the near term.
Positive Factors
Earnings
KDDI’s Q4 operating profit of ¥254 billion surpassed expectations, driven by strong growth in Business and Personal Services.
Financial Performance
A 9.3% year-over-year increase in earnings per share was supported by a ¥400 billion buyback.
Negative Factors
Guidance
The guidance for fiscal year operating profit is below consensus expectations.
Sector Growth
Japan's telecommunications companies are generally seen as part of an ex-growth sector.

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

KDDI Business Overview & Revenue Model

Company DescriptionKDDI Corporation is a leading telecommunications company in Japan, operating under the brand name 'au.' It offers a wide range of services including mobile communications, fixed-line communications, and internet services. In addition to these core offerings, KDDI is involved in solution services for corporate clients and has a growing presence in global telecommunications markets through strategic partnerships and investments.
How the Company Makes MoneyKDDI makes money primarily through its telecommunications services, which include mobile phone services, fixed-line communications, and internet services. The largest revenue stream is from mobile communications, where KDDI provides both voice and data services. The company also generates revenue from its fixed-line and internet services, catering to both residential and business clients. Additionally, KDDI offers solution services for enterprises, which contribute to its revenue by providing IT solutions, data center services, and cloud services. Significant partnerships with global and local technology companies enhance its service offerings and customer reach, further supporting its revenue growth.

KDDI Earnings Call Summary

Earnings Call Date:Feb 05, 2025
(Q3-2025)
|
% Change Since: -5.16%|
Next Earnings Date:Jul 25, 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 shows strong financial performance with consistent revenue growth and efficient operations. However, there is room for improvement in net income growth and free cash flow optimization. The balance sheet is stable, although further debt reduction could enhance financial stability.
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.
Breakdown
Mar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
5.92T5.75T5.67T5.45T5.31T
Gross Profit
2.51T2.43T2.41T2.46T2.38T
EBIT
1.08T926.85B1.08T1.06T1.04T
EBITDA
1.79T1.68T1.71T1.78T1.77T
Net Income Common Stockholders
685.68B637.87B679.11B672.49B651.50B
Balance SheetCash, Cash Equivalents and Short-Term Investments
921.17B887.21B844.97B819.05B1.11T
Total Assets
16.88T14.15T11.92T11.08T10.54T
Total Debt
4.44T2.43T1.65T1.74T1.76T
Net Debt
3.52T1.55T1.17T944.84B951.49B
Total Liabilities
11.23T8.35T6.25T5.57T5.28T
Stockholders Equity
5.13T5.25T5.12T4.98T4.76T
Cash FlowFree Cash Flow
958.47B956.97B444.74B793.08B1.06T
Operating Cash Flow
1.36T1.71T1.08T1.47T1.68T
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
Negative
Last Price2426.00
Price Trends
50DMA
2499.73
Negative
100DMA
2461.21
Negative
200DMA
2422.19
Positive
Market Momentum
MACD
-28.39
Positive
RSI
38.97
Neutral
STOCH
47.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9433, the sentiment is Negative. The current price of 2426 is below the 20-day moving average (MA) of 2475.63, below the 50-day MA of 2499.73, and above the 200-day MA of 2422.19, indicating a neutral trend. The MACD of -28.39 indicates Positive momentum. The RSI at 38.97 is Neutral, neither overbought nor oversold. The STOCH value of 47.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:9433.

KDDI Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
¥10.42T19.96
3.92%7.57%6.30%
80
Outperform
$13.29T12.939.84%2.84%2.47%-20.86%
76
Outperform
¥230.75B18.7712.86%2.64%8.11%6.49%
73
Outperform
$519.44B25.1014.78%<0.01%14.76%0.69%
70
Outperform
$9.17T14.3213.04%3.00%2.85%12.58%
64
Neutral
¥11.79T10.6210.28%0.55%7.21%
61
Neutral
$14.64B5.81-3.99%6.03%2.71%-31.56%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:9433
KDDI
2,426.00
400.42
19.77%
JP:9434
SoftBank Corp.
219.40
32.86
17.62%
JP:9436
Okinawa Cellular Telephone Company
4,890.00
1,421.29
40.97%
JP:3774
Internet Initiative Japan
2,828.50
680.57
31.68%
JP:9432
Nippon Telegraph and Telephone
154.70
14.76
10.55%
JP:9984
SoftBank Group
8,292.00
-1,775.28
-17.63%

KDDI Corporate Events

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.