DMS INC. (9782) AI Stock Analysis

• Market Cap: ¥23.94B
• Dividend Yield: 9.87%
• Average Volume (3M): 23.46K
• Price to Earnings (P/E): 24.0
• Beta (1Y): 0.69
• Revenue Growth: 11.51%
• EPS Growth: -29.82%
• Country: JP
• Employees: 314
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 50.30
• Shares Outstanding: 7,262,020
• 10 Day Avg. Volume: 19,910
• 30 Day Avg. Volume: 23,463
• PEG Ratio: -0.45
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.59
• P/FCF Ratio: -98.51
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: ¥4,232.00 ▲(46.18% Upside)
• Action: Reiterated Date: 01/17/26
• Date: Action: Reiterated 01/17/26

The score is driven primarily by solid overall financial stability (notably low leverage and a strong equity base) offset by weakening profitability and negative free cash flow. Technicals show strong trend strength but extremely overbought signals raise pullback risk, while valuation is supported by a very high dividend yield despite a mid-range P/E.

Positive Factors

Balance Sheet Strength

Low leverage and a high equity base provide durable financial flexibility, allowing the company to fund R&D, absorb cyclical shocks, pursue strategic M&A or partnerships, and sustain operations without urgent refinancing. This underpins resilience over the next 2–6 months.

Recurring Revenue Model

A recurring subscription and cloud-based revenue mix increases predictability and customer lifetime value, supporting steady top-line growth. With ~11.5% revenue growth, this model enhances cash visibility and supports investment in product and retention over a multi-month horizon.

Operational Margin Stability

Sustained gross and stable EBIT/EBITDA margins indicate consistent operational efficiency and scale benefits. This stability helps preserve core profitability even if headwinds occur, enabling reinvestment in product development and client services over the medium term.

Negative Factors

Negative Free Cash Flow

Declining operating cash flow and negative free cash flow constrain the company’s ability to self-fund growth, dividends, or M&A, increasing reliance on external financing. Over 2–6 months, this limits strategic flexibility and raises execution risk for expansion plans.

Profitability Pressure

A falling net margin signals compression from cost increases, pricing pressure, or mix shifts. If persistent, margin erosion reduces internal cash generation and returns on invested capital, necessitating structural cost or pricing actions to restore long-term profitability.

Declining EPS

A near-30% decline in EPS despite revenue growth suggests margin or non-operating headwinds materially affecting earnings quality. Persisting EPS weakness undermines reinvestment capacity and shareholder returns, and signals the need for operational fixes to restore earnings power.

DMS INC. Business Overview & Revenue Model

Company Description

DMS INC. (9782) is a leading provider in the technology sector, specializing in software development and digital solutions for businesses across various industries. The company offers a range of products and services, including cloud-based software applications, data analytics tools, and IT consulting services, aimed at enhancing operational efficiency and driving digital transformation for its clients.

How the Company Makes Money

DMS INC. generates revenue primarily through the sale of software licenses and subscription-based services. The company has established key revenue streams from its cloud-based applications, which provide recurring income through monthly or annual subscriptions. Additionally, DMS INC. earns income from offering customized IT consulting services and data analytics solutions tailored to the specific needs of its clients. Strategic partnerships with other technology firms and integrations with third-party platforms also enhance their product offerings, contributing to increased sales and customer retention.

DMS INC. Financial Statement Overview

Summary

Financials are broadly stable with a strong balance sheet (low leverage, high equity ratio) and steady operating margins, but profitability has come under pressure and cash flow is a key concern as free cash flow has turned negative.

Income Statement

DMS INC. shows a stable revenue base with a slight increase in total revenue from the previous year. The gross profit margin is healthy, although it has slightly decreased over the years. The net profit margin has decreased, indicating some pressure on profitability. EBIT and EBITDA margins are stable, suggesting operational efficiency.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio, indicating low leverage and financial stability. The equity ratio is high, reflecting a solid equity base. Return on equity is moderate, showing decent profitability relative to shareholder investment.

Cash Flow

Operating cash flow has decreased, impacting free cash flow negatively. The free cash flow to net income ratio is concerning, indicating potential cash flow challenges. However, the operating cash flow to net income ratio remains positive, suggesting operational cash generation is still aligned with profitability.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	26.33B	27.56B	26.90B	29.29B	27.97B	25.73B
Gross Profit	2.83B	2.58B	2.82B	3.34B	3.06B	2.78B
EBITDA	2.27B	1.63B	2.58B	2.07B	2.00B	1.93B
Net Income	1.36B	841.33M	1.52B	1.15B	1.04B	1.00B
Balance Sheet
Total Assets	21.14B	20.62B	21.32B	22.16B	19.42B	17.91B
Cash, Cash Equivalents and Short-Term Investments	8.25B	7.75B	9.11B	7.98B	5.12B	4.66B
Total Debt	482.30M	293.49M	444.53M	595.59M	272.15M	457.22M
Total Liabilities	4.73B	3.89B	4.63B	6.80B	5.08B	4.40B
Stockholders Equity	16.41B	16.73B	16.69B	15.35B	14.34B	13.51B
Cash Flow
Free Cash Flow	780.65M	-164.30M	99.60M	2.47B	905.06M	1.07B
Operating Cash Flow	780.65M	669.46M	879.30M	2.71B	1.18B	1.37B
Investing Cash Flow	0.00	-930.07M	875.91M	79.51M	-269.79M	-274.62M
Financing Cash Flow	0.00	-1.11B	-624.71M	76.64M	-326.46M	-323.79M

DMS INC. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2895.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:9782, the sentiment is Positive. The current price of 2895 is below the 20-day moving average (MA) of 3877.25, below the 50-day MA of 3670.50, and below the 200-day MA of 3167.57, indicating a bullish trend. The MACD of 79.42 indicates Positive momentum. The RSI at 64.65 is Neutral, neither overbought nor oversold. The STOCH value of 81.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:9782.

DMS INC. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
4767	73 Outperform	¥17.27B	13.01	―	3.96%	3.83%	-18.07%
9782	71 Outperform	¥23.94B	23.98	―	9.87%	11.51%	-29.82%
2130	69 Neutral	¥16.11B	15.77	―	2.51%	10.17%	327.27%
2389	63 Neutral	¥32.08B	19.69	―	2.14%	-22.10%	-16.33%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6094	50 Neutral	¥13.68B	17.08	―	―	-2.68%	91.68%
4499	43 Neutral	¥30.58B	-25.70	―	―	4.53%	-464.41%