KDDI (KDDIY) AI Stock Analysis

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KDDI

(OTC:KDDIY)

Rating:64Neutral

Price Target:―

KDDIY's overall stock score reflects strong financial performance and positive earnings call sentiment, counterbalanced by technical indicators suggesting bearish momentum and a relatively high valuation. The company's strengths in revenue growth and strategic collaborations are significant, but risks such as competitive pressures and high P/E ratio are notable.

KDDI (KDDIY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$64.06B

Dividend Yield1.86%

Average Volume (3M)7.10K

Price to Earnings (P/E)15.2

Beta (1Y)0.17

Revenue Growth-5.67%

EPS Growth-11.74%

CountryUS

Employees61,288

SectorCommunication Services

Sector Strength79

IndustryTelecommunications Services

Share Statistics

EPS (TTM)0.30

Shares Outstanding4,187,847,700

10 Day Avg. Volume0

30 Day Avg. Volume7,103

Financial Highlights & Ratios

PEG Ratio1.93

Price to Book (P/B)0.87

Price to Sales (P/S)0.00

P/FCF Ratio10.05

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

KDDI Business Overview & Revenue Model

Company DescriptionKDDI 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 services, as well as fixed-line services under the au Hikari brand; MVNO services; mobile services under the au brand; and voice communications, data transmission, FTTH services, and CATV services. It also provides smartphone-centric payment, financial, and other services through au PAY gateway; au HOME, an IoT service that watches over pets using sensors and cameras; au Denki to conserve energy usage; AEON, an English conversation school. The Business Services segment offers data center services to corporate customers under the TELEHOUSE brand; and various solutions for network and cloud services, smartphones, and other devices. It is also involved in the provision of broadcasting, wireless broadband, mail order, IT support, call center, and temporary personnel services; and design, construction, maintenance, and operation support for communication equipment and submarine cable. The company was founded in 1953 and is headquartered in Tokyo, Japan.

How the Company Makes MoneyKDDI makes money primarily through its telecommunications services. The company generates revenue from its mobile communications segment, which includes voice and data services provided under the 'au' brand. Additionally, KDDI earns income from its fixed-line services, offering broadband internet and phone services to households and businesses. Another key revenue stream is the company's business solutions segment, providing ICT solutions, cloud services, and data center operations to corporate clients. KDDI also has partnerships with global technology firms to enhance its service offerings. The company's earnings are bolstered by its investments in cutting-edge technologies and infrastructure, enabling it to expand its service offerings and improve customer satisfaction.

KDDI Earnings Call Summary

Earnings Call Date:Feb 05, 2025

(Q3-2025)

% Change Since: 1.07%|

Next Earnings Date:Jul 25, 2025

Earnings Call Sentiment Positive

The earnings call reflects a company experiencing steady growth, particularly in ARPU revenues and collaborative initiatives with Lawson. However, challenges remain in specific segments such as MVNO, roaming revenues, and BPO services. Overall, the highlights slightly outweigh the lowlights, suggesting a generally positive outlook.

Q3-2025 Updates

Positive Updates

Record Operating Revenue Growth

The 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.

Steady Increase in Operating Income

The operating income was ¥864.6 billion, up 2.0% year-on-year, with a progress ratio of 77.9%.

Growth in ARPU Revenues

Total ARPU revenues increased steadily, with communications ARPU revenues up ¥3.5 billion and value-added ARPU revenues up ¥27.9 billion year-on-year.

Lawson's Strong Performance

Lawson's equity method accounted income increased by ¥18.2 billion, contributing to the consolidated income growth.

Expansion in Business Services Segment

The Business Services segment saw consolidated operating revenue reach ¥1,012 billion, driven by a 19.9% year-on-year growth in the growth area.

Successful Collaborative Initiatives with Lawson

New acquisitions for Ponta Pass increased by about 20% quarter-on-quarter, and Lawson's daily sales increased by 3.4% year-on-year.

Negative Updates

Decline in MVNO and Roaming Revenues

Group MVNO and Rakuten roaming revenues were down ¥12.2 billion year-on-year.

Increased Competition and Churn Rates

Intensifying competition led to an increased churn rate, although the au brand maintained a low churn rate.

Challenges in BPO and Data Center Growth

BPO sales have been sluggish due to rapid digitalization, and data center sales were flat due to changes in billing for electricity.

Company Guidance

During the third quarter of the fiscal year ending March 2025, KDDI reported consolidated operating revenue of ¥4,364.2 billion, marking a 2.3% year-on-year increase, with a progress ratio of 75.6% towards the full-year forecast. Operating income reached ¥864.6 billion, a 2.0% increase year-on-year, with a progress ratio of 77.9%. Net income also showed a progress ratio of 77.8%, excluding temporary impacts, with a year-on-year increase of 0.6%. Key growth drivers included communications ARPU revenues, financial and energy business expansions, and strong performance from Lawson, contributing an equity method accounted income increase of ¥18.2 billion. The Business Services segment saw a 19.9% year-on-year growth, with IoT connections increasing by 22.2%. The company aims to leverage advancements in AI and communications to further drive growth, with strategic collaborations and new service offerings like the Money Activity Plan+ and Ponta Pass enhancing customer engagement and sales.

KDDI Financial Statement Overview

Summary

KDDI demonstrates strong financial health with consistent revenue growth, robust profit margins, and effective cash flow management. The company maintains a low leverage and strong equity base, although there is room for improvement in operating efficiency and return on equity.

Income Statement

Very Positive

KDDI has shown a consistent growth trajectory in revenue, with a 1.45% increase from 2023 to 2024. The company maintains strong gross and net profit margins at approximately 42.24% and 11.08% respectively, indicating robust profitability. However, there was a slight decline in EBIT and EBITDA margins, reflecting some pressure on operating efficiencies.

Balance Sheet

Positive

The balance sheet reflects a solid equity base with a debt-to-equity ratio of 0.46, indicating low leverage and financial stability. The company boasts a healthy equity ratio of 37.12%, suggesting a strong capital structure. Return on equity stands at 12.14%, which is competitive within the industry, though there is potential for improvement.

Cash Flow

Positive

KDDI demonstrates strong cash flow generation with a 115.16% growth in free cash flow from 2023 to 2024. The operating cash flow to net income ratio of 2.68 indicates efficient cash management. However, the free cash flow to net income ratio of 1.50 suggests a significant portion of earnings translates into free cash flow, but there is room for optimization.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
5.81T	5.75T	5.67T	5.45T	5.31T	5.24T
	Gross Profit
2.46T	2.43T	2.41T	2.46T	2.38T	2.31T
	EBIT
957.91B	961.58B	1.08T	1.06T	1.04T	1.03T
	EBITDA
1.63T	1.62T	1.71T	1.78T	1.76T	1.71T
	Net Income Common Stockholders
637.88B	637.87B	679.11B	672.49B	651.50B	639.77B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.47T	887.21B	844.97B	1.12T	1.11T	639.16B
	Total Assets
15.64T	14.15T	11.92T	11.08T	10.54T	9.58T
	Total Debt
3.39T	2.43T	1.65T	1.74T	1.76T	1.75T
	Net Debt
1.92T	1.55T	1.17T	944.84B	951.49B	1.38T
	Total Liabilities
9.84T	8.35T	6.25T	5.57T	5.28T	4.72T
	Stockholders Equity
5.27T	5.25T	5.12T	4.98T	4.76T	4.38T
Cash Flow		Free Cash Flow
1.51T	956.97B	444.74B	793.08B	1.06T	704.05B
	Operating Cash Flow
2.22T	1.71T	1.08T	1.47T	1.68T	1.32T
	Investing Cash Flow
-1.29T	-832.43B	-732.48B	-761.59B	-658.92B	-610.95B
	Financing Cash Flow
49.08B	-476.48B	-669.84B	-727.26B	-585.57B	-546.38B

KDDI Technical Analysis

Technical Analysis Sentiment

Positive

Last Price16.98

Price Trends

50DMA

17.35

Negative

100DMA

16.81

Positive

200DMA

16.48

Positive

Market Momentum

MACD

-0.19

Positive

RSI

44.81

Neutral

STOCH

33.29

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KDDIY, the sentiment is Positive. The current price of 16.98 is below the 20-day moving average (MA) of 17.23, below the 50-day MA of 17.35, and above the 200-day MA of 16.48, indicating a neutral trend. The MACD of -0.19 indicates Positive momentum. The RSI at 44.81 is Neutral, neither overbought nor oversold. The STOCH value of 33.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KDDIY.

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
TLK	79 Outperform	$17.05B	12.17	16.28%	6.18%	-5.14%	-7.47%
CHT	76 Outperform	$34.98B	29.72	9.59%	3.32%	-0.19%	-0.79%
VOD	71 Outperform	$24.26B	9.21	-7.17%	5.16%	-24.84%	-74.77%
AMX	71 Outperform	$51.98B	31.28	8.54%	2.83%	0.19%	-49.68%
KDDIY	64 Neutral	$64.06B	15.15	13.04%	1.86%	-5.67%	-11.74%
TEF	64 Neutral	$30.06B	―	-0.55%	5.99%	1.18%	―
Sector *	61 Neutral	$14.64B	5.81	-3.99%	6.03%	2.71%	-31.56%

* Communication Services Sector Average

Performance Comparison

KDDIY

KDDI

16.83

3.61

27.31%

AMX

America Movil

17.41

1.07

6.55%

CHT

Chunghwa Telecom Co

45.63

7.19

18.70%

TLK

PT Telekomunikasi Indonesia Tbk

16.65

0.36

2.21%

TEF

Telefonica

5.24

1.13

27.49%

VOD

Vodafone

9.98

1.54

18.25%

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.