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DIGITAL HEARTS HOLDINGS Co., Ltd.
(3676)
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Rating:62Neutral
Price Target:
¥1,116.00
▲(22.77% Upside)
Action:Reiterated
Date:08/11/26
The score is driven primarily by decent overall financial health supported by strong cash generation and manageable leverage, offset by volatile profitability and weakening revenue momentum. Technicals show a strong uptrend, but extremely overbought signals raise near-term risk. Valuation is moderate with a modest dividend yield, offering limited additional support.
Positive Factors
Strong Cash Generation
Consistently positive operating cash flow and a strong 2025 free-cash-flow rebound support internal funding, financial flexibility, and resilience. This reduces reliance on external financing while the company continues investing in its QA and digital-support operations.
Negative Factors
Weakening Revenue Momentum
The recent slowdown and decline in revenue growth indicate weaker near-term demand or execution after several years of expansion. If sustained, lower volume across game releases or digital projects could limit operating leverage and constrain future earnings growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
Consistently positive operating cash flow and a strong 2025 free-cash-flow rebound support internal funding, financial flexibility, and resilience. This reduces reliance on external financing while the company continues investing in its QA and digital-support operations.
Read all positive factors
DIGITAL HEARTS HOLDINGS Co., Ltd. (3676) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥22.89B
Dividend Yield2.36%
Average Volume (3M)70.74K
Price to Earnings (P/E)21.9
Beta (1Y)0.67
Revenue Growth0.26%
EPS Growth22.01%
CountryJP
Employees2,132
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)48.26
Shares Outstanding23,890,800
10 Day Avg. Volume80,220
30 Day Avg. Volume70,740
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)1.93
Price to Sales (P/S)0.48
P/FCF Ratio6.35
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)59.75
Revenue Forecast (FY)¥40.84B
DIGITAL HEARTS HOLDINGS Co., Ltd. Business Overview & Revenue Model
Company Description
DIGITAL HEARTS HOLDINGS Co., Ltd., operating with its subsidiaries, is engaged in a wide array of services primarily focused on quality assurance (debugging), media content, and various other IT solutions. The company delivers extensive testing an...
How the Company Makes Money
The company makes money primarily by selling outsourced QA/testing services to corporate clients (typically on a B2B basis) and consolidating the resulting revenues at the holding-company level through its subsidiaries. Key revenue streams general...
DIGITAL HEARTS HOLDINGS Co., Ltd. Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
67
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 39.40B | 38.93B | 39.75B | 38.79B | 36.52B | 29.18B |
| Gross Profit | 10.07B | 10.00B | 10.14B | 10.09B | 10.63B | 8.39B |
| EBITDA | 3.26B | 2.84B | 2.70B | 1.91B | 3.18B | 3.49B |
| Net Income | 1.08B | 1.18B | 629.46M | 176.93M | 799.55M | 1.78B |
Balance Sheet | ||||||
| Total Assets | 21.35B | 21.53B | 19.95B | 21.10B | 19.58B | 17.61B |
| Cash, Cash Equivalents and Short-Term Investments | 6.54B | 7.13B | 7.59B | 6.90B | 6.50B | 5.24B |
| Total Debt | 6.24B | 5.67B | 5.25B | 7.13B | 5.13B | 5.59B |
| Total Liabilities | 11.17B | 11.57B | 10.69B | 12.25B | 10.11B | 10.04B |
| Stockholders Equity | 9.86B | 9.63B | 8.95B | 8.42B | 8.81B | 6.99B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 2.93B | 2.69B | 946.83M | 1.82B | 2.70B |
| Operating Cash Flow | 0.00 | 3.22B | 3.12B | 1.76B | 2.85B | 3.08B |
| Investing Cash Flow | 0.00 | -3.72B | -147.41M | -2.37B | -1.90B | -2.54B |
| Financing Cash Flow | 0.00 | -97.42M | -2.41B | 934.08M | 141.47M | -546.57M |
DIGITAL HEARTS HOLDINGS Co., Ltd. Technical Analysis
Positive
909.00
Price Trends
820.30
Positive
805.76
Positive
857.77
Positive
Market Momentum
79.31
Negative
89.80
Negative
33.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3676, the sentiment is Positive. The current price of 909 is below the 20-day moving average (MA) of 959.15, above the 50-day MA of 820.30, and above the 200-day MA of 857.77, indicating a bullish trend. The MACD of 79.31 indicates Negative momentum. The RSI at 89.80 is Negative, neither overbought nor oversold. The STOCH value of 33.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3676.
DIGITAL HEARTS HOLDINGS Co., Ltd. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | ¥21.69B | 19.68 | ― | 1.03% | 9.38% | 14.45% | |
67 Neutral | ¥8.51B | 19.32 | ― | 0.95% | 9.86% | -35.09% | |
67 Neutral | ¥20.76B | 28.41 | ― | 2.13% | -4.37% | -29.68% | |
66 Neutral | ¥23.33B | 10.66 | ― | 1.72% | 52.56% | 326.22% | |
62 Neutral | ¥22.89B | 21.92 | ― | 2.36% | 0.26% | 22.01% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
53 Neutral | ¥12.77B | -4.73 | ― | 5.03% | -10.76% | -199.88% |
* Technology Sector Average
JP:3676
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DIGITAL HEARTS HOLDINGS Co., Ltd. Corporate Events
DIGITAL HEARTS Chairman Launches MBO Tender Offer via Sandbox K.K.
Aug 6, 2026
Sandbox K.K., a newly established company wholly owned by DIGITAL HEARTS chairman and largest shareholder Eiichi Miyazawa, has launched a tender offer to acquire common shares of DIGITAL HEARTS HOLDINGS Co., Ltd. The move targets all listed shares...
DIGITAL HEARTS backs management buyout and plans delisting via tender offer
Aug 6, 2026
DIGITAL HEARTS HOLDINGS Co., Ltd. has endorsed a management buyout led by Sandbox K.K., a newly established vehicle fully owned and directed by the company’s chairman and largest shareholder, Eiichi Miyazawa. The board has resolved to suppor...
Digital Hearts Scraps FY2027 Dividends and Shareholder Perks Ahead of MBO Tender Offer
Aug 6, 2026
Digital Hearts Holdings has revised its dividend forecast for the fiscal year ending March 31, 2027, deciding to pay no interim or year-end dividends, conditional on the successful completion of a tender offer by Sandbox K.K. The board said the mo...
DIGITAL HEARTS HOLDINGS Posts Q1 Profit Decline, Scraps Dividend While Keeping Full-Year Outlook
Aug 6, 2026
DIGITAL HEARTS HOLDINGS reported first-quarter consolidated net sales of ¥9.85 billion, up 5% year on year, but saw operating income fall 11.7% to ¥624 million and profit attributable to owners of parent decline 22.7% to ¥358 millio...
DIGITAL HEARTS HOLDINGS Updates Segment Reporting in Q1 FY2026 Results
Aug 6, 2026
DIGITAL HEARTS HOLDINGS released presentation materials for the three months ended June 30, 2026, outlining its financial performance by business segment. The company noted that net sales figures include inter-segment transactions and that segment...
Digital Hearts Holdings Overhauls Governance With New Audit and Supervisory Committee
May 22, 2026
Digital Hearts Holdings plans to shift its governance structure from a company with an Audit and Supervisory Board to one with an Audit and Supervisory Committee, pending shareholder approval at its June 25, 2026 general meeting. The company aims ...
DIGITAL HEARTS HOLDINGS Plans Governance Shift and Adds Investment Business to Charter
May 22, 2026
DIGITAL HEARTS HOLDINGS Co., Ltd. plans to partially amend its Articles of Incorporation, subject to shareholder approval at the June 25, 2026 annual meeting, to support a transition to a company with an Audit and Supervisory Committee. The move w...
DIGITAL HEARTS HOLDINGS to Maintain Restricted Stock Plan Amid Governance Shift
May 22, 2026
DIGITAL HEARTS HOLDINGS plans to continue its restricted stock compensation plan as it transitions to a Company with an Audit and Supervisory Committee, subject to shareholder approval at the June 25, 2026 general meeting. The plan targets interna...
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.