KDDI Corporation (KDDIY)
OTHER OTC:KDDIY
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KDDI
(OTC:KDDIY)
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Rating:69Neutral
Price Target:
$18.50
▲(5.35% Upside)
Action:Reiterated
Date:06/11/26
The score is driven primarily by solid operating fundamentals and positive free cash flow, tempered by the recent rise in leverage that increases balance-sheet risk. Technicals are mildly supportive with neutral momentum, and valuation appears reasonable with a moderate dividend yield.
Positive Factors
Consistent, improving free cash flow
KDDI’s recurring telecom revenues drive consistently positive free cash flow, which improved in 2025–2026 and historically covered a meaningful share of earnings (56–77%). Durable FCF supports capex, dividend funding, and strategic investments without immediate reliance on markets.
Negative Factors
Rising leverage reduces financial flexibility
Material debt growth to a debt/equity near 1.06 meaningfully raises refinancing and interest-rate sensitivity. Higher leverage constrains balance-sheet flexibility, limits optionality for large investments or buybacks, and increases vulnerability to funding-cost shocks over the medium term.
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Positive Factors
Negative Factors
Consistent, improving free cash flow
KDDI’s recurring telecom revenues drive consistently positive free cash flow, which improved in 2025–2026 and historically covered a meaningful share of earnings (56–77%). Durable FCF supports capex, dividend funding, and strategic investments without immediate reliance on markets.
Read all positive factors
KDDI (KDDIY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$60.77B
Dividend Yield2.38%
Average Volume (3M)68.90K
Price to Earnings (P/E)14.2
Beta (1Y)0.11
Revenue Growth5.14%
EPS Growth14.89%
CountryUS
Employees61,288
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)123.18
Shares Outstanding4,007,451,000
10 Day Avg. Volume0
30 Day Avg. Volume68,904
Financial Highlights & Ratios
PEG Ratio1.81
Price to Book (P/B)4.02
Price to Sales (P/S)3.18
P/FCF Ratio16.00
Enterprise Value/Market Cap240.80
Enterprise Value/Revenue3.06
Enterprise Value/Gross Profit7.23
Enterprise Value/Ebitda10.58
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.25
Revenue Forecast (FY)$39.96B
KDDI Business Overview & Revenue Model
Company Description
KDDI Corporation is a prominent telecommunications firm headquartered in Tokyo, Japan, offering a broad spectrum of communication solutions to both domestic and international markets. Its business is strategically divided into two core segments: P...
How the Company Makes Money
KDDI primarily makes money by charging recurring service fees and usage-based charges across its telecommunications and digital service businesses. The largest revenue driver is its consumer mobile business, where it earns monthly subscription rev...
KDDI Earnings Call Summary
Earnings Call Date:Feb 06, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jul 24, 2026
Earnings Call Sentiment Neutral
The call presents a mixed picture: operationally the core businesses (mobile, finance, business services, IoT and AI initiatives) demonstrated solid growth trends (revenue +3.8%, profit +5.3% cumulative; mobile ARPU +JPY190; credit card operating income +30.5%; IoT >66 million connections) and management has concrete plans for AI infrastructure and human capital. However, these positives are offset by a material fraud-like issue at subsidiaries—reference revenue cancellations totaling JPY 246 billion, an expected profit reversal of about JPY 50 billion, provisioning for external outflows of JPY 33 billion and ongoing investigations that have delayed official Q3 results and raised serious governance and reputational concerns. Given the magnitude and uncertainty of the subsidiary matter, while core business momentum is healthy, the call’s net tone is cautious and balanced between strong operating performance and significant downside risk from the identified misconduct.Positive Updates
Consolidated Top-Line and Profit Growth (Cumulative 9 Months)
Reference consolidated results for Q3 show operating revenue up +3.8% year-on-year, operating income up +2.0% and profit for the period up +5.3% on a cumulative basis, after adjusting for the impact of the subsidiary matter (figures subject to revision).
Negative Updates
Massive Fictitious Transactions at Consolidated Subsidiary
BIGLOBE and subsidiary G-PLAN engaged in suspected fictitious advertising-agency transactions. Reference impact on revenue to be canceled totals JPY 246 billion (JPY 96b before FY'24, JPY 82b FY'25, JPY 68b FY'26) based on currently recognized facts (subject to revision).
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Q3-2026 Updates
Positive
Negative
Consolidated Top-Line and Profit Growth (Cumulative 9 Months)
Reference consolidated results for Q3 show operating revenue up +3.8% year-on-year, operating income up +2.0% and profit for the period up +5.3% on a cumulative basis, after adjusting for the impact of the subsidiary matter (figures subject to revision).
Read all positive updates
Company Guidance
KDDI said the Special Investigation Committee’s report is expected by end‑March and Q3 and FY‑March‑2026 results will be disclosed promptly then; the company currently estimates reversal of booked revenue of ¥96.0bn (pre‑FY‑24), ¥82.0bn (FY‑25) and ¥68.0bn (FY‑26) — ¥246.0bn total — and operating‑income reversals totaling about ¥50.0bn (≈¥8bn/¥17bn/¥25bn by period), with provisions for externally flowed commissions of ¥5bn/¥11bn/¥17bn (¥33bn total) and ¥17bn already provisioned through Q3 while efforts to recover up to ¥33bn continue; despite this, KDDI left its dividend forecast unchanged and reiterated operational momentum: Q3 nine‑month consolidated operating revenue +3.8%, operating income +2.0% and profit for the period +5.3%; mobile nine‑month revenue +¥29.9bn YoY, mobile ARPU +¥190 YoY, smartphone churn down 0.01pp YoY, device‑bundle retention +4pp and a 5G SA coverage target of >90% population by year‑end; au Starlink Direct has expanded to >80 device partners with ~10 million units and ~3.5 million connections, credit‑card operating income +30.5% YoY, personal deposits 1.3x YoY and gold card members +24.5% YoY, Business Services Q3 +7.7%, IoT >66 million connections, >1,000 drone ports, new AI hubs (Sakai live, Miyazaki opening) and an AI engineering headcount target of ~3,000 by FY2028.KDDI Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
64
Positive
| Breakdown | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.44T | 5.92T | 5.75T | 5.67T | 5.45T |
| Gross Profit | 2.75T | 2.51T | 2.43T | 2.41T | 2.46T |
| EBITDA | 1.86T | 1.78T | 1.62T | 1.71T | 1.78T |
| Net Income | 749.76B | 685.68B | 637.87B | 679.11B | 672.49B |
Balance Sheet | |||||
| Total Assets | 19.15T | 16.88T | 14.15T | 11.92T | 11.08T |
| Cash, Cash Equivalents and Short-Term Investments | 1.08T | 921.17B | 887.21B | 844.97B | 1.12T |
| Total Debt | 5.40T | 4.55T | 2.39T | 1.65T | 1.74T |
| Total Liabilities | 13.53T | 11.23T | 8.35T | 6.25T | 5.57T |
| Stockholders Equity | 5.10T | 5.13T | 5.25T | 5.12T | 4.98T |
Cash Flow | |||||
| Free Cash Flow | 1.28T | 958.47B | 956.97B | 444.74B | 793.08B |
| Operating Cash Flow | 1.71T | 1.25T | 1.71T | 1.08T | 1.47T |
| Investing Cash Flow | -1.15T | -1.18T | -832.43B | -732.48B | -761.59B |
| Financing Cash Flow | -577.29B | -33.55B | -476.48B | -669.84B | -727.26B |
KDDI Technical Analysis
Neutral
17.56
Price Trends
16.63
Positive
16.82
Positive
16.77
Positive
Market Momentum
0.09
Positive
50.28
Neutral
38.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KDDIY, the sentiment is Neutral. The current price of 17.56 is above the 20-day moving average (MA) of 16.92, above the 50-day MA of 16.63, and above the 200-day MA of 16.77, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 50.28 is Neutral, neither overbought nor oversold. The STOCH value of 38.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KDDIY.
KDDI Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $35.22B | 29.62 | 10.23% | 3.15% | 9.48% | 9.11% | |
71 Outperform | $82.92B | 15.83 | 20.61% | 2.69% | 9.51% | 187.55% | |
69 Neutral | $60.77B | 14.19 | 14.41% | 2.38% | 5.14% | 14.89% | |
64 Neutral | $14.34B | 17.17 | 11.99% | 6.14% | -4.78% | -32.55% | |
62 Neutral | $33.12B | ― | -0.79% | 3.77% | 16.69% | 87.12% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
KDDIY
KDDI
16.88
0.40
2.44%
AMX
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26.46
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60.17%
CHT
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1.26%
TLK
PT Telekomunikasi Indonesia Tbk
14.88
-0.08
-0.53%
VOD
Vodafone
14.30
4.47
45.52%
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.