Square Enix Holdings Co (9684) AI Stock Analysis

• Market Cap: ¥1.32T
• Dividend Yield: 1.17%
• Average Volume (3M): 664.23K
• Price to Earnings (P/E): 71.4
• Beta (1Y): 0.40
• Revenue Growth: 0.58%
• EPS Growth: -56.67%
• Country: JP
• Employees: 4,770
• Sector: Communication Services
• Sector Strength: 81
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): -2.56
• Shares Outstanding: 122,531,600
• 10 Day Avg. Volume: 315,250
• 30 Day Avg. Volume: 664,230
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 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: ¥7,255.28
• Price Target Upside: -34.37% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 70 Outperform
• Price Target: ―

Square Enix Holdings Co benefits from strong financial stability and technical momentum, reflected in high trading levels and robust market indicators. However, operational efficiency and cash flow transparency pose challenges. The stock is currently trading at a high valuation, which may limit immediate upside potential.

Positive Factors

Market Valuation

Despite the gloomy outlook, the current valuation is at a historical high.

Merchandise Segment

The merchandise segment noted success with MTG-FF, indicating potential in this area.

Negative Factors

Core Games Business

The core games business of Square Enix shows signs of structural decline.

Digital Entertainment Segment

The digital entertainment segment, which contributes to more than 90% of total profits, experienced widespread weakness.

Operating Profit

The first quarter results with an operating profit of ¥9 billion highlight the fragility of Square Enix's core games business.

Stock Buyback

The firm rejected a proposed ¥60b buyback.

Square Enix Holdings Co Business Overview & Revenue Model

Company Description

Square Enix Holdings Co., Ltd. is a leading Japanese entertainment conglomerate known for its wide array of products and services in the video game, manga, and merchandise industries. The company is renowned for its development and publishing of iconic video game franchises such as Final Fantasy, Dragon Quest, and Kingdom Hearts. In addition to video games, Square Enix also engages in the publication of manga, operates amusement facilities, and produces related merchandise, contributing to its diverse entertainment portfolio.

How the Company Makes Money

Square Enix generates revenue primarily through the sale of video games, which includes both physical and digital formats. The company's video game revenue is driven by the success of its popular franchises and new game releases, which often include additional downloadable content (DLC), expansion packs, and in-game purchases that provide ongoing revenue streams. Additionally, Square Enix earns from licensing its intellectual properties for merchandise and media adaptations, such as films and animation. The company also operates amusement facilities, which contribute to its revenue, although at a smaller scale compared to its gaming division. Strategic partnerships and collaborations with other technology and media companies further enhance its revenue potential by expanding its market reach and product offerings.

Square Enix Holdings Co Financial Statement Overview

Summary

Square Enix Holdings Co demonstrates strong profitability with zero debt and healthy equity. However, recent operational and cash flow challenges, along with a slight decline in margins, suggest caution in maintaining financial strength.

Income Statement

Square Enix Holdings Co has shown stable revenue and profitability metrics. The company experienced a slight decrease in revenue in TTM compared to the last fiscal year, but it remains strong overall. The Gross Profit Margin and Net Profit Margin are healthy, reflecting efficient cost management and profitability. However, the decline in EBIT and EBITDA margins in TTM indicates a slight pressure on operational efficiency.

Balance Sheet

The balance sheet is robust with zero total debt, indicating strong financial stability. The company maintains a high equity ratio, reflecting a solid financial foundation. Additionally, a negative net debt position emphasizes excellent liquidity. However, a slight decline in stockholder's equity growth compared to previous years suggests a need for caution.

Cash Flow

Cash flow metrics reflect some challenges. While free cash flow growth has been positive in previous years, the TTM period shows zero free cash flow due to missing operating cash flow data. The lack of recent cash flow data limits the ability to fully evaluate cash generation efficiency. Historical data indicates strong cash flow management, though current transparency is limited.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	324.51B	356.34B	343.27B	365.27B	331.05B
Gross Profit	158.65B	167.37B	175.89B	195.31B	159.21B
EBITDA	48.25B	25.68B	51.25B	66.86B	54.74B
Net Income	24.41B	14.91B	49.26B	51.01B	26.94B
Balance Sheet
Total Assets	416.16B	411.93B	400.59B	380.90B	336.14B
Cash, Cash Equivalents and Short-Term Investments	247.76B	225.90B	193.50B	163.09B	146.23B
Total Debt	0.00	2.15B	2.17B	4.34B	3.78B
Total Liabilities	79.79B	94.80B	83.32B	96.47B	92.86B
Stockholders Equity	336.06B	316.87B	317.04B	284.24B	243.13B
Cash Flow
Free Cash Flow	31.91B	41.79B	3.68B	19.61B	28.60B
Operating Cash Flow	42.78B	52.24B	12.23B	27.57B	35.00B
Investing Cash Flow	-15.11B	-13.21B	27.60B	-8.12B	-6.65B
Financing Cash Flow	-6.60B	-14.79B	-15.52B	-9.34B	-6.65B

Square Enix Holdings Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11055.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9684, the sentiment is Positive. The current price of 11055 is above the 20-day moving average (MA) of 10312.85, above the 50-day MA of 10022.04, and above the 200-day MA of 7566.40, indicating a bullish trend. The MACD of 250.89 indicates Negative momentum. The RSI at 71.61 is Negative, neither overbought nor oversold. The STOCH value of 83.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9684.

Square Enix Holdings Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7832	75 Outperform	$3.44T	25.96	18.09%	1.13%	21.09%	157.99%
6460	75 Outperform	$638.90B	41.26	4.51%	1.59%	-8.32%	39.87%
9766	72 Outperform	¥3.33T	44.17	16.24%	0.67%	13.45%	16.03%
9684	70 Outperform	¥1.32T	71.37	5.77%	1.17%	0.58%	-56.67%
7974	69 Neutral	¥16.71T	56.87	11.31%	0.81%	-27.51%	-35.35%
9697	66 Neutral	¥1.66T	29.72	26.13%	1.01%	34.28%	58.34%
Sector *	60 Neutral	$41.55B	-3.91	-10.69%	4.16%	2.78%	-48.99%

Square Enix Holdings Co Corporate Events

Square Enix Reports No Share Repurchases in March 2025

Square Enix Holdings Co., Ltd. announced that no shares were repurchased during the period from March 1, 2025, to March 31, 2025, despite a prior board resolution allowing for the repurchase of up to 5 million shares. This lack of share repurchase activity may indicate a strategic decision to maintain current capital levels or reflect market conditions, potentially impacting investor perceptions and the company’s stock performance.