KDDI Corporation (JP:9433)
:9433
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KDDI
(9433)
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Rating:68Neutral
Price Target:
¥2,918.00
▲(8.88% Upside)
Action:DowngradedDate:03/26/26
The score is driven by strong cash flow and solid profitability, offset by earnings-call risks tied to suspected fictitious transactions, restatement uncertainty, and governance concerns. Technicals are neutral and valuation/dividend are supportive but not strong enough to outweigh the near-term trust and reporting overhang.
Positive Factors
Free Cash Flow Strength
Exceptionally strong free cash flow growth indicates the company generates cash well above accounting profits, supporting sustainable dividends, debt servicing, and reinvestment. This durable cash conversion provides flexibility to absorb shocks, fund network and AI capex, and pursue recovery efforts over months.
Negative Factors
Suspected Fictitious Transactions
The scale of potentially invalid revenue and estimated profit impact is material and creates persistent uncertainty over historical earnings quality. Restatements and recoveries could materially alter prior results, consume management time, and constrain capital allocation and investor trust for months.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Strength
Exceptionally strong free cash flow growth indicates the company generates cash well above accounting profits, supporting sustainable dividends, debt servicing, and reinvestment. This durable cash conversion provides flexibility to absorb shocks, fund network and AI capex, and pursue recovery efforts over months.
Read all positive factors
KDDI (9433) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥10.08T
Dividend Yield2.85%
Average Volume (3M)9.18M
Price to Earnings (P/E)16.1
Beta (1Y)0.38
Revenue Growth3.34%
EPS Growth20.36%
CountryJP
Employees61,288
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)42.09
Shares Outstanding4,187,847,700
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 TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)193.5
Revenue Forecast (FY)¥6.14T
KDDI Business Overview & Revenue Model
Company Description
KDDI Corporation provides telecommunications services in Japan and internationally. It operates in two segments, Personal Services and Business Services. The Personal Services segment offers smartphone, mobile phone, and other mobile communication...
How the Company Makes Money
KDDI makes money primarily by selling connectivity and related services to consumers and enterprises. Its core revenue stream is telecommunications service revenue: (1) consumer mobile services, where it earns recurring fees from monthly service p...
KDDI Earnings Call Summary
Earnings Call Date:Feb 06, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jul 31, 2026
Earnings Call Sentiment Negative
The call contained a mixed message: operationally KDDI reported steady underlying performance — revenue and profit growth, improved mobile ARPU and churn metrics, strong card/deposit momentum, IoT scale, and progress on AI and network initiatives — and management maintained the dividend. However, the disclosure of large-scale suspected fictitious transactions at subsidiaries (reference revenue cancellations of up to JPY 246 billion, provisional profit impact around JPY 50 billion, provisioning and possible impairments) and clear governance failures are material negatives that create financial statement uncertainty, reputational damage, and potential legal consequences. The operational positives are meaningful, but the scale and unresolved nature of the subsidiary fraud and the need for restatements make the near-term outlook and trust in controls materially uncertain.Positive Updates
Consolidated financial performance (Q3 nine-month cumulative, preliminary)
Operating revenue +3.8% year-on-year; operating income +2.0% year-on-year; profit for the period +5.3% year-on-year (reference values after provisional adjustments). Management states core businesses are performing steadily despite the subsidiary issue.
Negative Updates
Large-scale fictitious transactions at consolidated subsidiaries (BIGLOBE / G-PLAN)
Investigation identified suspected fictitious advertising-agency transactions recorded over multiple years. Reference cancellations of booked revenue: before FY'24 ~JPY 96 billion; FY'25 ~JPY 82 billion; FY'26 ~JPY 68 billion — total ~JPY 246 billion (presented as a current maximum estimate). Management indicated an estimated negative profit impact of around JPY 50 billion (subject to audit/investigation).
Read all updates
Q3-2026 Updates
Positive
Negative
Consolidated financial performance (Q3 nine-month cumulative, preliminary)
Operating revenue +3.8% year-on-year; operating income +2.0% year-on-year; profit for the period +5.3% year-on-year (reference values after provisional adjustments). Management states core businesses are performing steadily despite the subsidiary issue.
Read all positive updates
Company Guidance
The company said the Special Investigation Committee’s report is expected by end‑March and that corrected Q3 and FY Mar‑26 results will be disclosed then (no change to the dividend outlook); management currently recognizes up to JPY 246.0 billion of fictitious revenue to be canceled (JPY 96.0b pre‑FY24, JPY 82.0b FY25, JPY 68.0b FY26) with an approximate profit impact of about −JPY 50.0 billion, income reversals and impairments (operating‑income reversals cited ~JPY 8b, ~JPY 17b, ~JPY 25b) and provisions for externally flowed fees of up to ~JPY 33.0 billion (about JPY 17.0b already provisioned through Q3) that the company will attempt to recover; separately, core operations remain resilient with Q3 nine‑month cumulative consolidated operating revenue +3.8%, operating income +2.0% and profit for the period +5.3%, driven by segment contributions (Mobile +JPY27.2b, Finance/Energy/Lawson +JPY18.2b, DX +JPY8.5b, tech reform +JPY12.9b, offset by prior‑year promotion −JPY28.9b, net +JPY17.4b), mobile nine‑month growth +JPY29.9b YoY, mobile ARPU +JPY190 YoY, smartphone churn −0.01pp in Q3, UQ device‑bundle retention +4pp, 5G SA coverage target >90% population, au Starlink Direct rollout (launched Apr‑25; >80 device types, ~3.5m connections reported), credit‑card operating income +30.5% YoY, retail deposits 1.3x YoY, gold card members +24.5% YoY, Business Services Q3 alone +7.7% and IoT connections >66 million, and management plans to strengthen governance and hire ~3,000 engineers for its new AI integration business by FY2028.KDDI Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.03T | 5.92T | 5.75T | 5.67T | 5.45T | 5.31T |
| Gross Profit | 2.53T | 2.51T | 2.43T | 2.41T | 2.46T | 2.38T |
| EBITDA | 1.80T | 1.78T | 1.62T | 1.71T | 1.78T | 1.76T |
| Net Income | 712.20B | 685.68B | 637.87B | 679.11B | 672.49B | 651.50B |
Balance Sheet | ||||||
| Total Assets | 18.02T | 16.88T | 14.15T | 11.92T | 11.08T | 10.54T |
| Cash, Cash Equivalents and Short-Term Investments | 910.45B | 944.14B | 907.73B | 504.62B | 819.05B | 840.07B |
| Total Debt | 5.40T | 4.69T | 2.66T | 1.66T | 1.74T | 1.76T |
| Total Liabilities | 12.54T | 11.23T | 8.35T | 6.25T | 5.57T | 5.28T |
| Stockholders Equity | 4.97T | 5.13T | 5.25T | 5.13T | 4.98T | 4.76T |
Cash Flow | ||||||
| Free Cash Flow | 958.47B | 958.47B | 1.12T | 834.45B | 1.04T | 1.27T |
| Operating Cash Flow | 1.33T | 1.36T | 1.64T | 1.23T | 1.47T | 1.68T |
| Investing Cash Flow | -1.05T | -1.28T | -820.24B | -739.43B | -767.35B | -663.74B |
| Financing Cash Flow | -503.58B | -5.76B | -462.97B | -671.76B | -721.50B | -580.76B |
KDDI Technical Analysis
Positive
2680.00
Price Trends
2662.06
Positive
2665.44
Positive
2552.75
Positive
Market Momentum
1.65
Negative
52.77
Neutral
61.04
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 2680 is above the 20-day moving average (MA) of 2665.10, above the 50-day MA of 2662.06, and above the 200-day MA of 2552.75, indicating a bullish trend. The MACD of 1.65 indicates Negative momentum. The RSI at 52.77 is Neutral, neither overbought nor oversold. The STOCH value of 61.04 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
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | ¥317.70B | 18.43 | 13.42% | 2.27% | 5.10% | 12.48% | |
68 Neutral | ¥10.08T | 16.09 | 13.75% | 2.85% | 3.34% | 20.36% | |
66 Neutral | ¥21.02B | 23.11 | ― | ― | 30.15% | 31.28% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
60 Neutral | ¥430.11B | 19.63 | 15.67% | 1.31% | 12.48% | 18.38% | |
60 Neutral | ¥10.31T | 19.08 | ― | 3.99% | 7.79% | 5.53% | |
56 Neutral | ¥13.33T | 9.80 | 11.22% | 3.36% | 2.10% | -9.29% |
* Communication Services Sector Average
JP:9433
KDDI
2,677.50
338.59
14.48%
JP:3774
Internet Initiative Japan
2,431.00
-123.05
-4.82%
JP:9432
Nippon Telegraph and Telephone
156.40
12.62
8.77%
JP:9436
Okinawa Cellular Telephone Company
3,455.00
1,342.53
63.55%
JP:9424
Japan Communications Inc.
130.00
-15.00
-10.34%
JP:9434
SoftBank Corp.
217.40
9.17
4.40%
KDDI Corporate Events
KDDI Flags Potential Revisions to Q3 Results Amid Probe Into Inappropriate Subsidiary Transactions
Feb 6, 2026
KDDI has released preliminary consolidated financial figures for the third quarter of the fiscal year ending March 2026, cautioning that the numbers may be revised pending the outcome of an internal special investigation and an external audit into...
KDDI Delays Q3 Earnings as Probe Uncovers Large-Scale Fictitious Transactions at Subsidiaries
Feb 6, 2026
KDDI has postponed the official disclosure of its third-quarter earnings for the fiscal year ending March 2026 due to an ongoing investigation into suspected inappropriate transactions at its consolidated subsidiaries BIGLOBE Inc. and G-PLAN INC.,...
KDDI Delays Q3 Earnings Amid Probe Into Suspected Inappropriate Transactions
Feb 6, 2026
KDDI has decided to postpone the release of its earnings report for the third quarter of the fiscal year ending March 2026, acknowledging that this delay will push disclosure beyond the standard 45-day post-quarter window and apologizing to shareh...
KDDI Probes Suspected Inappropriate Transactions at Advertising Subsidiaries
Jan 14, 2026
KDDI has uncovered suspected inappropriate transactions within the advertising agency business of its consolidated subsidiaries BIGLOBE and G-PLAN, including potential overstatement of revenue and related figures, following delayed payments from c...
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.