DeNA Co Ltd

DeNA maintains a strong liquidity position with a current ratio of 2.54 and cash and equivalents of ¥71.33 billion, which provides a buffer against short-term obligations. However, the company reported negative free cash flow of ¥319 million, indicating that operating cash flow is insufficient to cover capital expenditures. The debt-to-equity ratio of 0.21 suggests a conservative capital structure with limited leverage.

Profitability metrics show a return on equity of 1.44% and a return on assets of 0.92%, both of which are below the industry median for software companies. This indicates that DeNA is underperforming in terms of generating returns relative to its equity and asset base. The operating margin of 5.64% (¥1.92 billion operating income on ¥33.98 billion revenue) is also below the median for the software industry, suggesting room for improvement in cost management.

DeNA's revenue is concentrated in a few key segments, with the majority derived from mobile gaming and online services. The company has a strong presence in the Japanese market, but its geographic exposure is limited, with no significant international revenue streams disclosed in the latest financials. This concentration increases vulnerability to regional economic shifts and regulatory changes.

Looking ahead, DeNA is expected to maintain a stable revenue trajectory, with no significant growth or contraction projected in the current or next fiscal year. The company's operating cash flow of ¥7.09 billion supports ongoing operations, but the negative free cash flow suggests that capital expenditures are outpacing cash generation. Analysts have assigned a mean price target of ¥2,766.67, with a median of ¥2,600, indicating a generally neutral outlook.

Risk factors for DeNA include the potential for dilution, although the risk is currently assessed as low. No immediate filing-based liquidity or dilution flags were detected, and the company has not issued any recent equity or debt that would significantly impact shareholder value. The conservative capital structure and strong liquidity position mitigate credit risk, but the low return on equity and assets suggest that the company may need to improve operational efficiency to enhance shareholder returns.

Recent events, including quarterly earnings reports and investor relations updates, have not revealed any material changes in the company's strategic direction or financial health. The company continues to focus on its core mobile gaming and online services segments, with no significant new product launches or market expansions disclosed in the latest filings.

Operating margin of 5.64% is well above the 1.83% software industry median, demonstrating strong operational efficiency.

Cash conversion ratio of 2.32 ranks in the top quartile, outperforming the 0.92 cohort median.

Analysts project 3.5% upside to a mean price target of 2,767 JPY, suggesting modest valuation support.

Low dilution, liquidity, and credit risk flags indicate a stable financial profile with minimal immediate threats.

Return on equity of 1.44% lags the 2.80% software cohort median, indicating inefficient capital utilization.

Four-year net income CAGR of -11.1% highlights a persistent long-term trend of declining profitability.

Revenue ¥33.25B, −29,7% YoY; Operating income −77,5% YoY.

• ▍Revenue ¥33.25B, −29,7% YoY
• ▍Operating income −77,5% YoY
• ▍Net income −73,6% YoY
• ▍Free cash flow −129,3% YoY
• ▍Net margin 6.7%

Revenue ¥31.30B, −32,6% YoY; Operating income −152,0% YoY.

• ▍Revenue ¥31.30B, −32,6% YoY
• ▍Operating income −152,0% YoY
• ▍Net income −148,7% YoY
• ▍Free cash flow −176,7% YoY
• ▍Net margin -19.8%

Revenue ¥41.42B, +14,2% YoY; Operating income +211,7% YoY.

• ▍Revenue ¥41.42B, +14,2% YoY
• ▍Operating income +211,7% YoY
• ▍Net income +22 838,5% YoY
• ▍Free cash flow +1 631,5% YoY
• ▍Net margin 28.5%

Revenue ¥41.73B, +22,8% YoY; Operating income +619,9% YoY.

• ▍Revenue ¥41.73B, +22,8% YoY
• ▍Operating income +619,9% YoY
• ▍Net income +267,1% YoY
• ▍Free cash flow +993,1% YoY
• ▍Net margin 26.8%

Revenue ¥47.27B; Operating income ¥7.99B.

• ▍Revenue ¥47.27B
• ▍Operating income ¥7.99B
• ▍Net margin 17.9%

Revenue ¥46.47B; Operating income ¥15.49B.

• ▍Revenue ¥46.47B
• ▍Operating income ¥15.49B
• ▍Net margin 27.5%

Revenue ¥36.28B; Operating income ¥3.58B.

• ▍Revenue ¥36.28B
• ▍Operating income ¥3.58B
• ▍Net margin -0.1%

Revenue ¥33.98B; Operating income ¥1.92B.

• ▍Revenue ¥33.98B
• ▍Operating income ¥1.92B
• ▍Net margin 9.0%

Revenue ¥147.70B, −9,9% YoY; Operating income −34,1% YoY.

• ▍Revenue ¥147.70B, −9,9% YoY
• ▍Operating income −34,1% YoY
• ▍Net income −21,3% YoY
• ▍Free cash flow −77,0% YoY
• ▍Net margin 12.9%

Revenue ¥164.00B, +19,9% YoY; Operating income +200,0% YoY.

• ▍Revenue ¥164.00B, +19,9% YoY
• ▍Operating income +200,0% YoY
• ▍Net income +184,3% YoY
• ▍Free cash flow +142,4% YoY
• ▍Net margin 14.8%

Revenue ¥136.73B, +1,4% YoY; Operating income −453,5% YoY.

• ▍Revenue ¥136.73B, +1,4% YoY
• ▍Operating income −453,5% YoY
• ▍Net income −423,8% YoY
• ▍Free cash flow −2 128,9% YoY
• ▍Net margin -21.0%

Revenue ¥134.91B, +3,1% YoY; Operating income −20,6% YoY.

• ▍Revenue ¥134.91B, +3,1% YoY
• ▍Operating income −20,6% YoY
• ▍Net income −71,0% YoY
• ▍Free cash flow −93,1% YoY
• ▍Net margin 6.6%