DIGITAL HEARTS HOLDINGS Co., Ltd. (3676) AI Stock Analysis

• Market Cap: ¥20.12B
• Dividend Yield: 2.26%
• Average Volume (3M): 70.74K
• Price to Earnings (P/E): 23.5
• Beta (1Y): 0.84
• Revenue Growth: -0.09%
• EPS Growth: 1653.62%
• Country: JP
• Employees: 1,870
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 20.82
• Shares Outstanding: 23,890,800
• 10 Day Avg. Volume: 80,220
• 30 Day Avg. Volume: 70,740
• PEG Ratio: 0.14
• Price to Book (P/B): 2.44
• Price to Sales (P/S): 0.55
• P/FCF Ratio: 8.11
• 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: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 73 Outperform
• Price Target: ¥1,085.00 ▲(11.51% Upside)

DIGITAL HEARTS HOLDINGS Co., Ltd. scores well due to its strong financial performance, characterized by revenue growth and profitability improvements. The technical analysis indicates neutral momentum, while the valuation suggests a moderate price level with a reasonable dividend yield. The absence of earnings call data and corporate events does not impact the overall score.

DIGITAL HEARTS HOLDINGS Co., Ltd. Business Overview & Revenue Model

Company Description

DIGITAL HEARTS HOLDINGS Co., Ltd. (3676) is a Japanese company specializing in the development and provision of digital content and IT services. The company operates primarily in the gaming and media sectors, offering a range of products including mobile games, software development, and IT consulting services. DIGITAL HEARTS is also involved in the testing and quality assurance of digital content, ensuring that games and applications meet high standards before their release.

How the Company Makes Money

DIGITAL HEARTS generates revenue through multiple channels, with key streams including the sale of mobile games and in-app purchases, software development contracts, and quality assurance services for other developers. The company partners with various gaming companies and content creators to enhance their offerings, thereby securing contracts that provide consistent income. Additionally, they may earn revenue through licensing agreements and collaborations with other firms in the digital content space, leveraging their expertise in testing and consulting to assist clients in optimizing their products for market success.

DIGITAL HEARTS HOLDINGS Co., Ltd. Financial Statement Overview

Summary

DIGITAL HEARTS HOLDINGS Co., Ltd. exhibits strong financial performance with consistent revenue growth, improving profitability margins, and a stable financial position. The company demonstrates sound cash flow generation, supporting its operations and growth strategies. While there is notable debt on the balance sheet, the company's equity ratio and cash flow capabilities mitigate potential risks.

Income Statement

DIGITAL HEARTS HOLDINGS Co., Ltd. has demonstrated robust revenue growth, with a revenue increase from ¥21.1 billion in 2020 to ¥39.7 billion in 2025. The gross profit margin remains healthy at around 25.5% in 2025, indicating efficient cost management. Net profit margin improved significantly, reaching 1.6% in 2025 from a low of 0.5% in 2024, showcasing enhanced profitability. EBIT and EBITDA margins have also shown positive trends, suggesting strong operational performance.

Balance Sheet

The company maintains a strong equity base with a debt-to-equity ratio of 0.58 in 2025, reflecting a balanced capital structure. ROE improved to 7.03% in 2025, demonstrating effective use of equity capital. The equity ratio stands at 44.9%, indicating a solid financial position with a substantial portion of assets financed by equity, reducing financial risk. However, the total debt level remains significant, which could pose potential risks if not managed carefully.

Cash Flow

The operating cash flow to net income ratio is robust, indicating strong cash generation relative to net income. Free cash flow has grown steadily, with a significant increase in free cash flow from ¥829 million in 2020 to ¥2.69 billion in 2025. The free cash flow to net income ratio is favorable, suggesting efficient conversion of profits to cash flows. Overall, the company's cash flow management appears effective, supporting its operational and strategic needs.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	39.29B	39.75B	38.79B	36.52B	29.18B	22.67B
Gross Profit	10.32B	10.14B	10.09B	10.63B	8.39B	6.43B
EBITDA	3.08B	2.70B	1.91B	3.18B	3.49B	1.92B
Net Income	881.41M	629.46M	176.93M	799.55M	1.78B	974.49M
Balance Sheet
Total Assets	19.71B	19.95B	21.10B	19.58B	17.57B	14.34B
Cash, Cash Equivalents and Short-Term Investments	7.22B	7.59B	6.90B	6.50B	5.24B	5.23B
Total Debt	5.39B	5.20B	7.10B	5.11B	5.59B	4.80B
Total Liabilities	10.45B	10.69B	12.25B	10.11B	9.99B	8.02B
Stockholders Equity	8.97B	8.95B	8.42B	8.81B	7.00B	5.70B
Cash Flow
Free Cash Flow	0.00	2.69B	946.83M	1.82B	2.70B	1.10B
Operating Cash Flow	0.00	3.12B	1.76B	2.85B	3.08B	1.42B
Investing Cash Flow	0.00	-147.41M	-2.37B	-1.90B	-2.54B	-1.81B
Financing Cash Flow	0.00	-2.41B	934.08M	141.47M	-546.57M	1.73B

DIGITAL HEARTS HOLDINGS Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 973.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 973 is above the 20-day moving average (MA) of 963.77, above the 50-day MA of 962.84, and above the 200-day MA of 943.33, indicating a bullish trend. The MACD of 0.75 indicates Negative momentum. The RSI at 52.59 is Neutral, neither overbought nor oversold. The STOCH value of 64.25 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6199	80 Outperform	¥20.89B	12.01	―	0.86%	11.50%	11.23%
3676	73 Outperform	¥20.12B	23.51	―	2.26%	-0.09%	1653.62%
2185	70 Outperform	¥21.50B	10.03	―	3.19%	-1.95%	34.62%
3788	69 Neutral	¥25.94B	34.03	―	1.62%	5.38%	-8.86%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
6572	60 Neutral	¥21.20B	46.22	―	1.62%	13.47%	296.94%
3657	50 Neutral	¥11.77B	―	―	4.76%	7.53%	49.93%

DIGITAL HEARTS HOLDINGS Co., Ltd. Corporate Events

DIGITAL HEARTS HOLDINGS Announces Capital Reduction for Subsidiary AGEST

DIGITAL HEARTS HOLDINGS Co., Ltd. has announced a planned reduction in the stated capital of its subsidiary, AGEST, Inc., from 100 million yen to 10 million yen. This move is aimed at enhancing financial flexibility and is part of the company’s broader financial and tax strategies. The capital reduction will not affect the number of shares or net assets of AGEST and is expected to have no impact on the consolidated business results of DIGITAL HEARTS HOLDINGS.

The most recent analyst rating on (JP:3676) stock is a Buy with a Yen1074.00 price target. To see the full list of analyst forecasts on DIGITAL HEARTS HOLDINGS Co., Ltd. stock, see the JP:3676 Stock Forecast page.

DIGITAL HEARTS HOLDINGS Reports Strong Profit Growth Amid Decline in Sales

DIGITAL HEARTS HOLDINGS Co., Ltd. reported its consolidated financial results for the first quarter ending June 30, 2025, showing a slight decline in net sales by 4.6% compared to the previous year. However, the company experienced significant growth in operating income, ordinary income, and profit attributable to owners of the parent, with increases of 139.2%, 124.0%, and 119.0% respectively. This improvement in profitability suggests a strong operational performance despite the decrease in sales, potentially strengthening the company’s position in the market.