Digital Arts Inc

Digital Arts Inc maintains a strong liquidity position, with cash and equivalents amounting to ¥17.05 billion, representing 79.4% of total assets. The company operates with no long-term debt and a debt-to-equity ratio of 0.0, indicating a conservative capital structure. The current ratio of 3.51 further supports its ability to meet short-term obligations.

Profitability metrics show a return on equity (ROE) of 3.66% and a return on assets (ROA) of 2.72%, both below the typical thresholds for high-performing software firms. The price-to-earnings (P/E) ratio of 94.69 is significantly higher than the industry median, suggesting potential overvaluation relative to earnings.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification. This lack of diversification increases exposure to market-specific risks and limits growth opportunities outside its primary market.

Outlook data indicates a projected revenue growth of 12.3% for the current fiscal year and 10.1% for the next fiscal year. However, the high P/E ratio and low ROE suggest that earnings growth may not be sufficient to justify the current valuation.

Risk assessment reveals low liquidity and dilution risks, with no immediate filing-based flags detected. The absence of long-term debt and the high cash reserves mitigate financial risk. However, the high P/E ratio and low ROE indicate potential earnings volatility and inefficiency in capital use.

Recent events include analyst estimates with a mean price target of ¥11,550 and a median price target of ¥11,550. The mean recommendation is 2.00, indicating a "Buy" rating, with two "Buy" and no "Strong Buy" recommendations. These estimates suggest a potential upside from the current market price of ¥4,120.

Analysts project 222% upside to a mean price target of 11,550 JPY, signaling strong market confidence in future performance.

The company maintains zero long-term debt across all reported periods, eliminating interest expense risks and ensuring financial stability.

Revenue grew at a 4.6% CAGR over four years, indicating consistent top-line expansion despite recent fiscal year volatility.

Return on equity of 3.7% lags significantly behind major peers like Microsoft, suggesting less efficient capital utilization.

Only two analysts cover the stock, creating a wide price target range and potential for limited market scrutiny.

Revenue ¥3.00B, +10,8% YoY; Operating income +2,5% YoY.

• ▍Revenue ¥3.00B, +10,8% YoY
• ▍Operating income +2,5% YoY
• ▍Net income +9,0% YoY
• ▍Net margin 36.6%

Revenue ¥2.84B, +16,7% YoY; Operating income +20,9% YoY.

• ▍Revenue ¥2.84B, +16,7% YoY
• ▍Operating income +20,9% YoY
• ▍Net income +21,5% YoY
• ▍Net margin 32.4%

Revenue ¥2.72B, +4,5% YoY; Operating income +1,0% YoY.

• ▍Revenue ¥2.72B, +4,5% YoY
• ▍Operating income +1,0% YoY
• ▍Net income +2,3% YoY
• ▍Net margin 31.3%

Revenue ¥2.27B, +1,6% YoY; Operating income −5,1% YoY.

• ▍Revenue ¥2.27B, +1,6% YoY
• ▍Operating income −5,1% YoY
• ▍Net income −5,0% YoY
• ▍Net margin 24.5%

Revenue ¥2.71B; Operating income ¥1.41B.

• ▍Revenue ¥2.71B
• ▍Operating income ¥1.41B
• ▍Net margin 37.2%

Revenue ¥2.44B; Operating income ¥1.09B.

• ▍Revenue ¥2.44B
• ▍Operating income ¥1.09B
• ▍Net margin 31.1%

Revenue ¥2.60B; Operating income ¥1.21B.

• ▍Revenue ¥2.60B
• ▍Operating income ¥1.21B
• ▍Net margin 32.0%

Revenue ¥2.23B; Operating income ¥838.0M.

• ▍Revenue ¥2.23B
• ▍Operating income ¥838.0M
• ▍Net margin 26.2%

Revenue ¥10.84B, +8,6% YoY; Operating income +5,1% YoY.

• ▍Revenue ¥10.84B, +8,6% YoY
• ▍Operating income +5,1% YoY
• ▍Net income +7,7% YoY
• ▍Free cash flow −0,7% YoY
• ▍Net margin 31.6%

Revenue ¥9.98B, −13,3% YoY; Operating income −28,3% YoY.

• ▍Revenue ¥9.98B, −13,3% YoY
• ▍Operating income −28,3% YoY
• ▍Net income −27,3% YoY
• ▍Free cash flow −38,8% YoY
• ▍Net margin 31.9%

Revenue ¥11.51B, +10,3% YoY; Operating income +44,0% YoY.

• ▍Revenue ¥11.51B, +10,3% YoY
• ▍Operating income +44,0% YoY
• ▍Net income +42,9% YoY
• ▍Free cash flow +55,7% YoY
• ▍Net margin 38.0%

Revenue ¥10.44B, +15,3% YoY; Operating income +7,0% YoY.

• ▍Revenue ¥10.44B, +15,3% YoY
• ▍Operating income +7,0% YoY
• ▍Net income +5,5% YoY
• ▍Free cash flow +2,6% YoY
• ▍Net margin 29.4%