New Risk • Apr 23
New major risk - Share price stability The company's share price has been highly volatile over the past 3 months. It is more volatile than 90% of Japanese stocks, typically moving 9.7% a week. This is considered a major risk. Share price volatility increases the risk of potential losses in the short-term as the stock tends to have larger drops in price more frequently than other stocks. It may also indicate the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. Currently, the following risks have been identified for the company: Major Risks Share price has been highly volatile over the past 3 months (9.7% average weekly change). High level of non-cash earnings (119% accrual ratio). Valuation Update With 7 Day Price Move • Apr 23
Investor sentiment improves as stock rises 18% After last week's 18% share price gain to JP¥2,778, the stock trades at a forward P/E ratio of 26x. Average forward P/E is 16x in the IT industry in Japan. Total loss to shareholders of 36% over the past three years. Upcoming Dividend • Mar 23
Upcoming dividend of JP¥47.00 per share Eligible shareholders must have bought the stock before 30 March 2026. Payment date: 29 June 2026. The company is paying out more than 100% of its profits and is cash flow negative. Trailing yield: 2.4%. Lower than top quartile of Japanese dividend payers (3.6%). Higher than average of industry peers (1.8%). Major Estimate Revision • Mar 06
Consensus EPS estimates fall by 26% The consensus outlook for fiscal year 2026 has been updated. 2026 EPS estimate fell from JP¥135 to JP¥100 per share. Revenue forecast steady at JP¥42.7b. Net income forecast to grow 150% next year vs 7.4% growth forecast for IT industry in Japan. Consensus price target down from JP¥3,800 to JP¥3,200. Share price fell 2.1% to JP¥2,076 over the past week. Reported Earnings • Feb 14
Third quarter 2026 earnings released: EPS: JP¥44.48 (vs JP¥72.93 in 3Q 2025) Third quarter 2026 results: EPS: JP¥44.48 (down from JP¥72.93 in 3Q 2025). Revenue: JP¥10.6b (up 13% from 3Q 2025). Net income: JP¥2.04b (down 39% from 3Q 2025). Profit margin: 19% (down from 36% in 3Q 2025). The decrease in margin was driven by higher expenses. Revenue is forecast to grow 13% p.a. on average during the next 3 years, compared to a 5.2% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has increased by 29% per year but the company’s share price has fallen by 25% per year, which means it is significantly lagging earnings. New Risk • Feb 13
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 5.4% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Minor Risks Share price has been volatile over the past 3 months (5.4% average weekly change). Large one-off items impacting financial results. Announcement • Dec 24
Digital Garage, Inc. to Report Q3, 2026 Results on Feb 12, 2026 Digital Garage, Inc. announced that they will report Q3, 2026 results on Feb 12, 2026 Major Estimate Revision • Dec 04
Consensus EPS estimates increase by 62% The consensus outlook for earnings per share (EPS) in fiscal year 2026 has improved. 2026 revenue forecast increased from JP¥42.5b to JP¥45.0b. EPS estimate increased from JP¥84.94 to JP¥137 per share. Net income forecast to grow 103% next year vs 14% growth forecast for IT industry in Japan. Consensus price target down from JP¥5,060 to JP¥4,100. Share price fell 7.8% to JP¥2,917 over the past week. Buy Or Sell Opportunity • Nov 28
Now 21% undervalued after recent price drop Over the last 90 days, the stock has fallen 18% to JP¥3,010. The fair value is estimated to be JP¥3,834, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Meanwhile, the company has become profitable. For the next 3 years, revenue is forecast to grow by 8.5% per annum. Earnings are also forecast to grow by 22% per annum over the same time period. Declared Dividend • Nov 15
Dividend of JP¥47.00 announced Shareholders will receive a dividend of JP¥47.00. Ex-date: 30th March 2026 Payment date: 29th June 2026 Dividend yield will be 1.5%, which is about the same as the industry average. Sustainability & Growth Dividend is covered by both earnings (61% earnings payout ratio) and cash flows (17% cash payout ratio). The dividend has increased by an average of 12% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. EPS is expected to grow by 83% over the next 3 years, which should provide support to the dividend and adequate earnings cover. Buy Or Sell Opportunity • Nov 05
Now 21% undervalued after recent price drop Over the last 90 days, the stock has fallen 13% to JP¥3,220. The fair value is estimated to be JP¥4,057, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 12% over the last 3 years. Meanwhile, the company became loss making. Buy Or Sell Opportunity • Oct 15
Now 20% undervalued after recent price drop Over the last 90 days, the stock has fallen 23% to JP¥3,255. The fair value is estimated to be JP¥4,069, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 12% over the last 3 years. Meanwhile, the company became loss making. Announcement • Sep 27
Digital Garage, Inc. to Report Q2, 2026 Results on Nov 13, 2025 Digital Garage, Inc. announced that they will report Q2, 2026 results on Nov 13, 2025 Announcement • Sep 22
Resona Holdings, Inc. (TSE:8308) completed the acquisition of additional 17.9% stake in Digital Garage, Inc. (TSE:4819) from Oasis Management Company Ltd. Resona Holdings, Inc. (TSE:8308) entered into a share transfer agreement to acquire additional 17.9% stake in Digital Garage, Inc. (TSE:4819) from Oasis Management Company Ltd. on July 31, 2025. Before completion, Resona Holdings, Inc. held 12.42% stake and Oasis Management Company Ltd. held 18.52% stake in Digital Garage, Inc. After completion, Resona Holdings, Inc. will hold 30.95% stake and Oasis Management Company Ltd. will no longer hold any stake in Digital Garage, Inc.
The expected completion of the transaction is from late August 2025 to late September 2025.
Resona Holdings, Inc. (TSE:8308) completed the acquisition of additional 17.9% stake in Digital Garage, Inc. (TSE:4819) from Oasis Management Company Ltd. on September 22, 2025. Reported Earnings • Aug 08
First quarter 2026 earnings released: JP¥14.68 loss per share (vs JP¥67.04 profit in 1Q 2025) First quarter 2026 results: JP¥14.68 loss per share (down from JP¥67.04 profit in 1Q 2025). Revenue: JP¥8.34b (down 20% from 1Q 2025). Net loss: JP¥673.0m (down 121% from profit in 1Q 2025). Revenue is forecast to grow 18% p.a. on average during the next 3 years, compared to a 5.3% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 78 percentage points per year, which is a significant difference in performance. Announcement • Jun 30
Ceres Inc. (TSE:3696) acquired 19.14% stake in CyberBuzz, Inc. (TSE:7069) from Digital Garage, Inc. (TSE:4819). Ceres Inc. (TSE:3696) acquired 19.14% stake in CyberBuzz, Inc. (TSE:7069) from Digital Garage, Inc. (TSE:4819) on June 30, 2025. As a result of this transfer, Digital Garage will no longer be one of our other affiliates or major shareholders. Masashi Tanaka, who was appointed from Digital Garage as an outside director of the Company, will resign as of June 30, 2025 in connection with this transfer.
Ceres Inc. (TSE:3696) completed the acquisition of 19.14% stake in CyberBuzz, Inc. (TSE:7069) from Digital Garage, Inc. (TSE:4819) on June 30, 2025. Announcement • Jun 27
Digital Garage, Inc. Appoints Hiroyuki Nozaki as Head of Group CEO Division, Effective August 1, 2025 Digital Garage, Inc. Announces executive change: Name: Hiroyuki Nozaki: New position: Corporate Officer, Head of Group CEO Division, Deputy Head of Corporate Division . Current Position: Corporate Officer, Deputy Head of Corporate Division. Effective Date: August 1, 2025. Announcement • May 31
Digital Garage, Inc. to Report Q1, 2026 Results on Aug 07, 2025 Digital Garage, Inc. announced that they will report Q1, 2026 results on Aug 07, 2025 Reported Earnings • May 15
Full year 2025 earnings: Revenues exceed analysts expectations while EPS lags behind Full year 2025 results: JP¥155 loss per share (down from JP¥127 profit in FY 2024). Revenue: JP¥32.2b (up 2.6% from FY 2024). Net loss: JP¥7.19b (down 224% from profit in FY 2024). Revenue exceeded analyst estimates by 7.8%. Earnings per share (EPS) missed analyst estimates by 31%. Revenue is forecast to grow 20% p.a. on average during the next 2 years, compared to a 5.8% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 96 percentage points per year, which is a significant difference in performance. Announcement • May 13
Digital Garage, Inc., Annual General Meeting, Jun 26, 2025 Digital Garage, Inc., Annual General Meeting, Jun 26, 2025. Announcement • Mar 27
Digital Garage, Inc. to Report Fiscal Year 2025 Results on May 13, 2025 Digital Garage, Inc. announced that they will report fiscal year 2025 results on May 13, 2025 Upcoming Dividend • Mar 21
Upcoming dividend of JP¥53.00 per share Eligible shareholders must have bought the stock before 28 March 2025. Payment date: 24 June 2025. The company is not currently making a profit but it is cash flow positive. Trailing yield: 0.9%. Lower than top quartile of Japanese dividend payers (3.7%). Lower than average of industry peers (1.4%). Announcement • Feb 12
Digital Garage, Inc. (TSE:4819) acquired an additional unknown stake in Pocket Change Inc. Digital Garage, Inc. (TSE:4819) acquired an additional unknown stake in Pocket Change Inc. on February 10, 2025.
Digital Garage, Inc. (TSE:4819) completed the acquisition of additional unknown stake in Pocket Change Inc. on February 10, 2025. Reported Earnings • Feb 11
Third quarter 2025 earnings released: EPS: JP¥72.93 (vs JP¥26.78 loss in 3Q 2024) Third quarter 2025 results: EPS: JP¥72.93 (up from JP¥26.78 loss in 3Q 2024). Revenue: JP¥9.42b (up 100% from 3Q 2024). Net income: JP¥3.34b (up JP¥4.54b from 3Q 2024). Profit margin: 36% (up from net loss in 3Q 2024). Revenue is forecast to grow 14% p.a. on average during the next 3 years, compared to a 5.5% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 94 percentage points per year, which is a significant difference in performance. Announcement • Feb 10
Digital Garage, Inc. Announces Special Dividend for the Fiscal Year Ending March 31, 2025 Digital Garage, Inc. announced Special dividend for the fiscal year ending March 31, 2025. For the period, the company announced special dividend of JPY 10 per share. Announcement • Feb 10
Digital Garage, Inc. Provides Year-End Dividend Guidance for the Fiscal Year Ending March 31, 2025 Digital Garage, Inc. provided year-end dividend guidance for the fiscal year ending March 31, 2025. For the period, the company expects dividend of JPY 43 per share compared to JPY 40 per share a year ago. Major Estimate Revision • Jan 08
Consensus EPS estimates fall from profit to JP¥116 loss The consensus outlook for fiscal year 2025 has been updated. Expected to report loss instead of -JP¥116 instead of JP¥113 per share profit previously forecast. Revenue forecast unchanged at JP¥40.5b IT industry in Japan expected to see average net income growth of 16% next year. Consensus price target up from JP¥2,500 to JP¥3,650. Share price fell 2.1% to JP¥3,780 over the past week. Price Target Changed • Jan 07
Price target increased by 43% to JP¥3,650 Up from JP¥2,550, the current price target is provided by 1 analyst. New target price is approximately in line with last closing price of JP¥3,835. Stock is up 6.5% over the past year. The company is forecast to post a net loss per share of JP¥116 compared to earnings per share of JP¥127 last year. Announcement • Jan 03
Digital Garage, Inc. to Report Q3, 2025 Results on Feb 10, 2025 Digital Garage, Inc. announced that they will report Q3, 2025 results on Feb 10, 2025 New Risk • Nov 14
New minor risk - Shareholder dilution The company's shareholders have been diluted in the past year. Increase in shares outstanding: 2.1% This is considered a minor risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. Currently, the following risks have been identified for the company: Minor Risks Share price has been volatile over the past 3 months (6.0% average weekly change). Shareholders have been diluted in the past year (2.1% increase in shares outstanding). Declared Dividend • Nov 09
Dividend of JP¥53.00 announced Shareholders will receive a dividend of JP¥53.00. Ex-date: 28th March 2025 Payment date: 24th June 2025 Dividend yield will be 1.5%, which is about the same as the industry average. Sustainability & Growth Dividend is being paid despite the company being loss-making over the last 12 months. However, the dividend is well covered by cash flows (12% cash payout ratio). The dividend has increased by an average of 24% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. New Risk • Nov 08
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 5.8% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Minor Risks Share price has been volatile over the past 3 months (5.8% average weekly change). Large one-off items impacting financial results. Major Estimate Revision • Aug 31
Consensus revenue estimates increase by 11% The consensus outlook for revenues in fiscal year 2025 has improved. 2025 revenue forecast increased from JP¥36.2b to JP¥40.1b. EPS estimate increased from JP¥104 to JP¥113 per share. Net income forecast to grow 7.5% next year vs 16% growth forecast for IT industry in Japan. Consensus price target broadly unchanged at JP¥2,500. Share price was steady at JP¥2,928 over the past week. Reported Earnings • Aug 11
First quarter 2025 earnings released: EPS: JP¥67.04 (vs JP¥88.96 in 1Q 2024) First quarter 2025 results: EPS: JP¥67.04 (down from JP¥88.96 in 1Q 2024). Revenue: JP¥10.4b (down 4.5% from 1Q 2024). Net income: JP¥3.17b (down 23% from 1Q 2024). Profit margin: 30% (down from 38% in 1Q 2024). Revenue is forecast to grow 12% p.a. on average during the next 3 years, compared to a 4.9% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 54 percentage points per year, which is a significant difference in performance. New Risk • Aug 10
New minor risk - Shareholder dilution The company's shareholders have been diluted in the past year. Increase in shares outstanding: 2.7% This is considered a minor risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. Currently, the following risks have been identified for the company: Major Risk High level of non-cash earnings (21% accrual ratio). Minor Risk Shareholders have been diluted in the past year (2.7% increase in shares outstanding). Valuation Update With 7 Day Price Move • Aug 05
Investor sentiment deteriorates as stock falls 16% After last week's 16% share price decline to JP¥2,375, the stock trades at a forward P/E ratio of 23x. Average forward P/E is 17x in the IT industry in Japan. Total loss to shareholders of 48% over the past three years. Announcement • Jun 28
Digital Garage, Inc. to Report Q1, 2025 Results on Aug 08, 2024 Digital Garage, Inc. announced that they will report Q1, 2025 results on Aug 08, 2024 Reported Earnings • Jun 26
Full year 2024 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2024 results: EPS: JP¥127 (up from JP¥193 loss in FY 2023). Revenue: JP¥31.4b (up 25% from FY 2023). Net income: JP¥5.81b (up JP¥14.9b from FY 2023). Profit margin: 19% (up from net loss in FY 2023). Revenue missed analyst estimates by 13%. Earnings per share (EPS) exceeded analyst estimates by 8.7%. Revenue is forecast to grow 11% p.a. on average during the next 3 years, compared to a 5.0% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 43 percentage points per year, which is a significant difference in performance. Announcement • Jun 20
Digital Garage, Inc. (TSE:4819) announces an Equity Buyback for 2,200,000 shares, representing 4.64% for ¥4,000 million. Digital Garage, Inc. (TSE:4819) announces a share repurchase program. Under the program, the company will repurchase up to 2,200,000 shares, representing 4.64% of its issued share capital, for ¥4,000 million. The purpose of the program is to actively return profits to shareholders based on the progress of our business. The share repurchase program will run until January 31, 2025. As of March 31, 2024, the company had 47,379,729 shares issued (excluding treasury stock) and 239,371 shares in treasury. New Risk • Jun 11
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 5.5% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk High level of non-cash earnings (33% accrual ratio). Minor Risks Paying a dividend despite having no free cash flows. Share price has been volatile over the past 3 months (5.5% average weekly change). Shareholders have been diluted in the past year (2.8% increase in shares outstanding). Major Estimate Revision • Jun 06
Consensus EPS estimates fall by 14%, revenue upgraded The consensus outlook for fiscal year 2025 has been updated. 2025 revenue forecast increased from JP¥33.8b to JP¥36.2b. EPS estimate fell from JP¥121 to JP¥104 per share. Net income forecast to shrink 15% next year vs 14% growth forecast for IT industry in Japan . Consensus price target down from JP¥3,550 to JP¥2,550. Share price rose 2.7% to JP¥2,354 over the past week. New Risk • May 21
New minor risk - Dividend sustainability The dividend is not well covered by cash flows. The company is paying a dividend despite having no free cash flows. Dividend yield: 1.7% This is considered a minor risk. Dividends are ultimately paid out of the company's available cash reserves. Companies that pay out too much of their cash flow are at risk of having to reduce or cut their dividend in future. If cash flow growth slows or cash flows fall, then there may not be enough cash reserves to maintain the same dividend. Or in extreme cases, companies may opt to take on debt to maintain the dividend. This risk is mitigated by the fact the dividend is covered by earnings, however, cash flows are generally more important. For dividend paying companies, any reduction in the dividend can significantly impact the share price. Currently, the following risks have been identified for the company: Major Risk High level of non-cash earnings (33% accrual ratio). Minor Risks Paying a dividend despite having no free cash flows. Shareholders have been diluted in the past year (2.8% increase in shares outstanding). Reported Earnings • May 11
Full year 2024 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2024 results: EPS: JP¥127 (up from JP¥193 loss in FY 2023). Revenue: JP¥31.4b (up 25% from FY 2023). Net income: JP¥5.81b (up JP¥14.9b from FY 2023). Profit margin: 19% (up from net loss in FY 2023). The move to profitability was primarily driven by lower expenses. Revenue missed analyst estimates by 13%. Earnings per share (EPS) exceeded analyst estimates by 8.7%. Revenue is forecast to grow 8.7% p.a. on average during the next 2 years, compared to a 4.9% growth forecast for the IT industry in Japan. Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 49 percentage points per year, which is a significant difference in performance. Announcement • May 11
Digital Garage, Inc., Annual General Meeting, Jun 21, 2024 Digital Garage, Inc., Annual General Meeting, Jun 21, 2024. New Risk • Apr 30
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 5.9% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Minor Risks Share price has been volatile over the past 3 months (5.9% average weekly change). Large one-off items impacting financial results. Shareholders have been diluted in the past year (3.4% increase in shares outstanding). Valuation Update With 7 Day Price Move • Apr 19
Investor sentiment deteriorates as stock falls 15% After last week's 15% share price decline to JP¥2,548, the stock trades at a forward P/E ratio of 21x. Average forward P/E is 18x in the IT industry in Japan. Total loss to shareholders of 42% over the past three years. Announcement • Apr 03
Digital Garage, Inc. (TSE:4819) completed the acquisition of 20% stake in Resona Kessai Service Co.,Ltd. from Resona Holdings, Inc. (TSE:8308). Digital Garage, Inc. (TSE:4819) has reached a basic agreement to acquire 20% stake in Resona Kessai Service Co.,Ltd. from Resona Holdings, Inc. (TSE:8308) on December 22, 2023. Resona and Digital Garage plans to discuss separately and reach an agreement on the terms and conditions of such share acquisition. BofA Securities acted as exclusive financial advisor to Resona Holdings.
Digital Garage, Inc. (TSE:4819) completed the acquisition of 20% stake in Resona Kessai Service Co.,Ltd. from Resona Holdings, Inc. (TSE:8308) on April 1, 2024. Major Estimate Revision • Mar 30
Consensus revenue estimates fall by 11% The consensus outlook for revenues in fiscal year 2024 has deteriorated. 2024 revenue forecast decreased from JP¥40.3b to JP¥36.0b. EPS estimate fell from JP¥178 to JP¥117 per share. Net income forecast to grow 62% next year vs 18% growth forecast for IT industry in Japan. Consensus price target down from JP¥3,850 to JP¥3,550. Share price was steady at JP¥3,315 over the past week. Announcement • Mar 29
Digital Garage, Inc. Announces Management Appointments, Effective April 1, 2024 At the Board of Directors meeting on March 29, 2024, Digital Garage Inc. resolved to make corporate officer appointments and personnel changes. Daniel Brandt appointed as Corporate Officer and Chief Investor Relations Officer (CIRO) and responsible for investor relations. Lisa Katayama appointed as Corporate Officer and Chief Transformation Officer (CTrO) and responsible for corporate transformation. Effective date on April 1, 2024. Announcement • Mar 28
Digital Garage, Inc. to Report Fiscal Year 2024 Results on May 09, 2024 Digital Garage, Inc. announced that they will report fiscal year 2024 results on May 09, 2024 Upcoming Dividend • Mar 21
Upcoming dividend of JP¥40.00 per share Eligible shareholders must have bought the stock before 28 March 2024. Payment date: 26 June 2024. Payout ratio is a comfortable 51% but the company is not cash flow positive. Trailing yield: 1.1%. Lower than top quartile of Japanese dividend payers (3.2%). Lower than average of industry peers (1.4%). New Risk • Mar 13
New minor risk - Shareholder dilution The company's shareholders have been diluted in the past year. Increase in shares outstanding: 5.3% This is considered a minor risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. Currently, the following risks have been identified for the company: Minor Risks Large one-off items impacting financial results. Shareholders have been diluted in the past year (5.3% increase in shares outstanding). Declared Dividend • Feb 24
Dividend increased to JP¥40.00 Dividend of JP¥40.00 is 8.1% higher than last year. Ex-date: 28th March 2024 Payment date: 26th June 2024 Dividend yield will be 1.2%, which is lower than the industry average of 1.4%. Sustainability & Growth Dividend is covered by earnings (51% earnings payout ratio) but the company has no free cash flows available, indicating it may be using cash reserves or debt to pay the dividend. The dividend has increased by an average of 22% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability. EPS is expected to grow by 45% over the next 2 years, which should provide support to the dividend and adequate earnings cover. Reported Earnings • Feb 10
Third quarter 2024 earnings released: JP¥26.79 loss per share (vs JP¥76.80 loss in 3Q 2023) Third quarter 2024 results: JP¥26.79 loss per share (improved from JP¥76.80 loss in 3Q 2023). Revenue: JP¥4.72b (down 23% from 3Q 2023). Net loss: JP¥1.20b (loss narrowed 67% from 3Q 2023). Revenue is forecast to grow 8.0% p.a. on average during the next 3 years, compared to a 5.5% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has fallen by 55% per year but the company’s share price has only fallen by 9% per year, which means it has not declined as severely as earnings. Announcement • Dec 28
Digital Garage, Inc. to Report Q3, 2024 Results on Feb 08, 2024 Digital Garage, Inc. announced that they will report Q3, 2024 results on Feb 08, 2024 New Risk • Nov 13
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Japanese stocks, typically moving 5.4% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 1.4% per year for the foreseeable future. Minor Risks Share price has been volatile over the past 3 months (5.4% average weekly change). Large one-off items impacting financial results. Profit margins are more than 30% lower than last year (2.9% net profit margin). New Risk • Nov 10
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 1.4% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 1.4% per year for the foreseeable future. Minor Risks Large one-off items impacting financial results. Profit margins are more than 30% lower than last year (2.9% net profit margin). Buying Opportunity • Nov 10
Now 21% undervalued after recent price drop Over the last 90 days, the stock is down 20%. The fair value is estimated to be JP¥3,932, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Meanwhile, the company became loss making. Announcement • Sep 28
Digital Garage, Inc. to Report Q2, 2024 Results on Nov 09, 2023 Digital Garage, Inc. announced that they will report Q2, 2024 results on Nov 09, 2023 Price Target Changed • Sep 15
Price target decreased by 7.8% to JP¥4,700 Down from JP¥5,100, the current price target is an average from 2 analysts. New target price is 25% above last closing price of JP¥3,770. Stock is up 1.8% over the past year. The company is forecast to post earnings per share of JP¥178 next year compared to a net loss per share of JP¥193 last year. Reported Earnings • Aug 10
First quarter 2024 earnings released: EPS: JP¥88.96 (vs JP¥158 in 1Q 2023) First quarter 2024 results: EPS: JP¥88.96 (down from JP¥158 in 1Q 2023). Revenue: JP¥10.9b (down 19% from 1Q 2023). Net income: JP¥4.10b (down 45% from 1Q 2023). Profit margin: 38% (down from 55% in 1Q 2023). Revenue is forecast to grow 13% p.a. on average during the next 3 years, compared to a 6.0% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has fallen by 26% per year but the company’s share price has increased by 3% per year, which means it is well ahead of earnings. Price Target Changed • Jul 25
Price target decreased by 9.8% to JP¥4,600 Down from JP¥5,100, the current price target is provided by 1 analyst. New target price is 14% above last closing price of JP¥4,025. Stock is up 2.2% over the past year. The company is forecast to post earnings per share of JP¥120 next year compared to a net loss per share of JP¥193 last year. Announcement • Jun 29
Digital Garage, Inc. to Report Q1, 2024 Results on Aug 09, 2023 Digital Garage, Inc. announced that they will report Q1, 2024 results on Aug 09, 2023 Announcement • Jun 06
Digital Garage, Inc. (TSE:4819) announces an Equity Buyback for 1,600,000 shares, representing 3.47% for ¥5,000 million. Digital Garage, Inc. (TSE:4819) announces a share repurchase program. Under the program, the company will repurchase up to 1,600,000 shares, representing 3.47% of its issued share capital, for ¥5,000 million. The purpose of the program is to improve company's corporate value and implement flexible capital policy. The share repurchase program will run until November 30, 2023. As of March 31, 2023, the company had 46,072,674 shares issued (excluding treasury stock) and 1,534,826 shares in treasury. Announcement • May 16
Digital Garage, Inc. Announces Dividend for the Fiscal Year Ended March 31, 2023, Payable on June 26, 2023 Digital Garage, Inc. announced dividend of JPY 37.00 per share for the fiscal year ended March 31, 2023 against JPY 35.00 per share paid a year ago. Scheduled date to commence dividend payments is June 26, 2023. Reported Earnings • May 14
Full year 2023 earnings: EPS and revenues miss analyst expectations Full year 2023 results: JP¥193 loss per share (down from JP¥655 profit in FY 2022). Revenue: JP¥25.1b (down 53% from FY 2022). Net loss: JP¥9.06b (down 130% from profit in FY 2022). Revenue missed analyst estimates by 9.3%. Earnings per share (EPS) also missed analyst estimates by 64%. Revenue is forecast to grow 19% p.a. on average during the next 3 years, compared to a 6.3% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has increased by 2% per year whereas the company’s share price has increased by 5% per year. Announcement • May 13
Digital Garage, Inc., Annual General Meeting, Jun 23, 2023 Digital Garage, Inc., Annual General Meeting, Jun 23, 2023. Buying Opportunity • Mar 28
Now 20% undervalued after recent price drop Over the last 90 days, the stock is down 7.9%. The fair value is estimated to be JP¥5,230, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 27% over the last 3 years. Meanwhile, the company became loss making. Price Target Changed • Mar 24
Price target increased by 8.5% to JP¥5,100 Up from JP¥4,700, the current price target is an average from 2 analysts. New target price is 21% above last closing price of JP¥4,220. Stock is down 4.6% over the past year. The company is forecast to post earnings per share of JP¥25.30 for next year compared to JP¥655 last year. Reported Earnings • Feb 12
Third quarter 2023 earnings released: JP¥76.80 loss per share (vs JP¥93.32 profit in 3Q 2022) Third quarter 2023 results: JP¥76.80 loss per share (down from JP¥93.32 profit in 3Q 2022). Revenue: JP¥6.13b (down 42% from 3Q 2022). Net loss: JP¥3.61b (down 184% from profit in 3Q 2022). Revenue is forecast to grow 17% p.a. on average during the next 3 years, compared to a 6.6% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has increased by 24% per year but the company’s share price has only increased by 3% per year, which means it is significantly lagging earnings growth. Announcement • Dec 29
Digital Garage, Inc. to Report Q3, 2023 Results on Feb 10, 2023 Digital Garage, Inc. announced that they will report Q3, 2023 results on Feb 10, 2023 Major Estimate Revision • Nov 29
Consensus EPS estimates fall by 44% The consensus outlook for earnings per share (EPS) in 2023 has deteriorated. 2023 revenue forecast decreased from JP¥53.1b to JP¥49.6b. EPS estimate also fell from JP¥311 per share to JP¥174 per share. Net income forecast to grow 29% next year vs 12% growth forecast for IT industry in Japan. Consensus price target reaffirmed at JP¥4,700. Share price rose 2.9% to JP¥4,115 over the past week. Major Estimate Revision • Nov 26
Consensus forecasts updated The consensus outlook for 2023 has been updated. 2023 revenue forecast fell from JP¥53.1b to JP¥45.9b. EPS estimate increased from JP¥302 to JP¥328 per share. Net income forecast to grow 77% next year vs 12% growth forecast for IT industry in Japan. Consensus price target up from JP¥4,700 to JP¥4,950. Share price rose 4.3% to JP¥4,130 over the past week. Reported Earnings • Nov 16
Second quarter 2023 earnings released: JP¥250 loss per share (vs JP¥329 profit in 2Q 2022) Second quarter 2023 results: JP¥250 loss per share (down from JP¥329 profit in 2Q 2022). Net loss: JP¥11.8b (down 178% from profit in 2Q 2022). Revenue is forecast to grow 14% p.a. on average during the next 3 years, compared to a 6.6% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has increased by 40% per year but the company’s share price has fallen by 1% per year, which means it is significantly lagging earnings. Reported Earnings • Nov 13
Second quarter 2023 earnings released: JP¥250 loss per share (vs JP¥329 profit in 2Q 2022) Second quarter 2023 results: JP¥250 loss per share (down from JP¥329 profit in 2Q 2022). Net loss: JP¥11.8b (down 178% from profit in 2Q 2022). Revenue is forecast to grow 14% p.a. on average during the next 3 years, compared to a 6.9% growth forecast for the IT industry in Japan. Over the last 3 years on average, earnings per share has increased by 40% per year but the company’s share price has only increased by 1% per year, which means it is significantly lagging earnings growth. Price Target Changed • Nov 02
Price target decreased to JP¥4,700 Down from JP¥5,200, the current price target is an average from 2 analysts. New target price is 30% above last closing price of JP¥3,620. Stock is down 34% over the past year. The company is forecast to post earnings per share of JP¥303 for next year compared to JP¥655 last year.