# Dentsu Group (4324.JP)

Canonical: https://gigainvestors.com/s/4324.JP

Analysis as of: 2026-10-15T07:10:14.819Z. Financial observations: FY2012–FY2025.

Listing currency: JPY. Reporting currency: JPY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: JPY 3,743.00 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 5

- Operating margin variation: 4.06×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.16×

- FY2017: 0.15×

- FY2018: 0.11×

- FY2019: -0.00×

- FY2020: -0.15×

- FY2021: 0.22×

- FY2022: 0.09×

- FY2023: 0.03×

- FY2024: -0.09×

- FY2025: -0.20×

### moat: fail

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 6.3pp below the typical margin (limit 4pp)

- ROIC, median of available years: 21.1%

- ROIC, second-lowest year: -56.4%

- Typical minus recent gross margin: 6.3 pp

- Typical gross margin (annual median): 89.7%

- Recent gross margin (lower of latest and 3-year median): 83.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.3%

- ROIC including acquisitions, ten-year median: 9.0%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 24.7%

- FY2017: 23.1%

- FY2018: 19.1%

- FY2019: -0.6%

- FY2020: -55.1%

- FY2021: >100%

- FY2022: >100%

- FY2023: 25.8%

- FY2024: -56.4%

- FY2025: -100.3%

### economics: fail

- Cash conversion uses consolidated free cash flow after all capital expenditure and consolidated net income (informational).

- incremental invested capital return below threshold

- Cash conversion uses consolidated totals: Yes

- Owner earnings, five-year total: JPY 172B

- Net income, five-year total: JPY -327B

- Return on incremental invested capital: 0.0%

- Working capital / revenue, annual change: 0.1 pp

- Working capital / revenue, change between three-year averages: 0.6 pp

- Working capital / revenue, final three-year average: 6.9%

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 23.1% vs -56.4%

- Per-share earnings: 292.85 to -734.56 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.0%

- Ordinary dilution, 5-year annual growth: -1.5%

- Market cap gain: JPY -705B

- Cumulative retained earnings: JPY -608B

- Diluted shares, 10-year annual growth: -1.0%

- Diluted shares, 5-year annual growth: -1.5%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: JPY -1K

- Per-share value, starting three-year median: JPY 292.85

- Per-share value, ending three-year median: JPY -734.56

- Buybacks concentrated in cheaper years (correlation): 0.15

- Average buyback yield: 1.4%

- Buyback history: 9 years

- Debt-funded buybacks: No

- Acquisition spending: JPY 408B

- Cumulative net income, 10 years: JPY -323B

- ROIC, first three-year median: 23.1%

- ROIC, last three-year median: -56.4%

Chart: Earnings per share; fiscal year observations.

- FY2016: JPY 292.85

- FY2017: JPY 373.11

- FY2018: JPY 320.39

- FY2019: JPY -287.92

- FY2020: JPY -571.19

- FY2021: JPY 388.79

- FY2022: JPY 223.33

- FY2023: JPY -40.52

- FY2024: JPY -734.56

- FY2025: JPY -1K

### accounting: pass

- Sloan accruals: -13.9%

- Receivables to sales index (DSRI): 1.07×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Accounting red flags: 0

- Goodwill and intangibles / equity: 1.33×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -1.9%

- FY2017: -1.0%

- FY2018: -1.2%

- FY2019: -4.2%

- FY2020: -7.4%

- FY2021: -0.8%

- FY2022: -0.6%

- FY2023: -2.4%

- FY2024: -7.2%

- FY2025: -13.9%

## Holders

## Price story

Down 25% since Mar 2022 · sales +1.7%

Story as of 2026-10-16T10:00:14.147Z; price observation 2026-10-15.

### Sales · FY2024–2025

sales +1.7%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XS0O.pdf; observed 2026-03-26.

- FY2016: JPY 838B 

- FY2017: JPY 929B 

- FY2018: JPY 1.02T 

- FY2019: JPY 1.05T 

- FY2020: JPY 939B 

- FY2021: JPY 1.09T 

- FY2022: JPY 1.25T 

- FY2023: JPY 1.30T 

- FY2024: JPY 1.41T 

- FY2025: JPY 1.44T 

### Gross margin · FY2025

gross margin 83.4%; source https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XS0O.pdf; observed 2026-03-26.

- FY2016: 94.1% 

- FY2017: 94.5% 

- FY2018: 91.6% 

- FY2019: 89.6% 

- FY2020: 88.9% 

- FY2021: 90.0% 

- FY2022: 89.8% 

- FY2023: 87.8% 

- FY2024: 85.2% 

- FY2025: 83.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in advertising agencies; annual sales are JPY 1.4 trillion.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XS0O.pdf (filed 2026-03-26); FY2025: revenue 1435245000000; grossProfit 1197530000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 83.4% to 87.8% during 2023–25; it earns 21.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2023: grossProfit / revenue = 87.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2024: grossProfit / revenue = 85.2%.

- Source: https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XS0O.pdf (filed 2026-03-26); FY2025: grossProfit / revenue = 83.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); 10-year return on capital observations [[2016,0.2466571786093974],[2017,0.2309233339105145],[2018,0.1910772327362868],[2019,-0.0061686028666300815],[2020,-0.5511504859426394],[2021,5.251616944509404],[2022,1.2979924990834746],[2023,0.2576865534528465],[2024,-0.5640239904038384],[2025,-1.002951998419701]]; median 0.21100028332340065. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/api/fundamentals/DEN.F.json#2016-12-31 (filed 2026-03-26); FY2016: growth capex 0; upkeep 22234000000; owner earnings 121351000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/DEN.F.json#2017-12-31 (filed 2026-03-26); FY2017: growth capex 0; upkeep 27767000000; owner earnings 113790000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2018: growth capex 0; upkeep 31631000000; owner earnings 116993000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2021: growth capex 0; upkeep 21036000000; cash acquisitions 49671000000; owner earnings 130262000000. Growth capex plus acquisitions / owner earnings = 0.3813161167493206.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2022: growth capex 0; upkeep 18526000000; cash acquisitions 40873000000; owner earnings 79743000000. Growth capex plus acquisitions / owner earnings = 0.5125590960962091.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); FY2023: growth capex 0; upkeep 28892000000; cash acquisitions 136544000000; owner earnings 2746000000. Growth capex plus acquisitions / owner earnings = 49.72469045884924.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); Dividend observations: [[2016,22811000000],[2017,25516000000],[2018,25370000000],[2019,26075000000],[2020,26508000000],[2021,20888000000],[2022,37035000000],[2023,43229000000],[2024,34323000000],[2025,18105000000]]. Zero only counted when supported by a complete cash-flow statement.

### What the price says

The price is 0.7 times annual sales.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-26); Closing price 3743 JPY; reporting-to-trading FX 1; FY2025 annual sales per share 5529.09362242484; price multiple 0.6769644819937901. FY2024 cash earnings/share -672.3197127573216. Closing-price date 2026-10-15.

## Monthly share-price history (JPY per share)

- 2016-11: JPY 5,230.00 per share

- 2016-12: JPY 5,500.00 per share

- 2017-01: JPY 5,220.00 per share

- 2017-02: JPY 6,220.00 per share

- 2017-03: JPY 6,040.00 per share

- 2017-04: JPY 6,280.00 per share

- 2017-05: JPY 5,640.00 per share

- 2017-06: JPY 5,370.00 per share

- 2017-07: JPY 5,160.00 per share

- 2017-08: JPY 4,600.00 per share

- 2017-09: JPY 4,940.00 per share

- 2017-10: JPY 4,825.00 per share

- 2017-11: JPY 5,080.00 per share

- 2017-12: JPY 4,775.00 per share

- 2018-01: JPY 4,885.00 per share

- 2018-02: JPY 4,945.00 per share

- 2018-03: JPY 4,670.00 per share

- 2018-04: JPY 5,180.00 per share

- 2018-05: JPY 5,200.00 per share

- 2018-06: JPY 5,250.00 per share

- 2018-07: JPY 4,690.00 per share

- 2018-08: JPY 5,190.00 per share

- 2018-09: JPY 5,270.00 per share

- 2018-10: JPY 5,240.00 per share

- 2018-11: JPY 5,060.00 per share

- 2018-12: JPY 4,905.00 per share

- 2019-01: JPY 5,160.00 per share

- 2019-02: JPY 4,650.00 per share

- 2019-03: JPY 4,675.00 per share

- 2019-04: JPY 4,535.00 per share

- 2019-05: JPY 3,550.00 per share

- 2019-06: JPY 3,760.00 per share

- 2019-07: JPY 3,620.00 per share

- 2019-08: JPY 3,630.00 per share

- 2019-09: JPY 3,805.00 per share

- 2019-10: JPY 3,890.00 per share

- 2019-11: JPY 3,970.00 per share

- 2019-12: JPY 3,775.00 per share

- 2020-01: JPY 3,660.00 per share

- 2020-02: JPY 2,812.00 per share

- 2020-03: JPY 2,087.00 per share

- 2020-04: JPY 2,278.00 per share

- 2020-05: JPY 2,885.00 per share

- 2020-06: JPY 2,555.00 per share

- 2020-07: JPY 2,348.00 per share

- 2020-08: JPY 2,784.00 per share

- 2020-09: JPY 3,095.00 per share

- 2020-10: JPY 2,991.00 per share

- 2020-11: JPY 3,400.00 per share

- 2020-12: JPY 3,065.00 per share

- 2021-01: JPY 3,315.00 per share

- 2021-02: JPY 3,670.00 per share

- 2021-03: JPY 3,550.00 per share

- 2021-04: JPY 3,360.00 per share

- 2021-05: JPY 3,760.00 per share

- 2021-06: JPY 3,975.00 per share

- 2021-07: JPY 3,795.00 per share

- 2021-08: JPY 4,080.00 per share

- 2021-09: JPY 4,305.00 per share

- 2021-10: JPY 4,170.00 per share

- 2021-11: JPY 3,610.00 per share

- 2021-12: JPY 4,100.00 per share

- 2022-01: JPY 3,940.00 per share

- 2022-02: JPY 4,575.00 per share

- 2022-03: JPY 5,020.00 per share

- 2022-04: JPY 4,705.00 per share

- 2022-05: JPY 4,300.00 per share

- 2022-06: JPY 4,075.00 per share

- 2022-07: JPY 4,630.00 per share

- 2022-08: JPY 4,515.00 per share

- 2022-09: JPY 4,110.00 per share

- 2022-10: JPY 4,635.00 per share

- 2022-11: JPY 4,400.00 per share

- 2022-12: JPY 4,145.00 per share

- 2023-01: JPY 4,165.00 per share

- 2023-02: JPY 4,370.00 per share

- 2023-03: JPY 4,650.00 per share

- 2023-04: JPY 4,875.00 per share

- 2023-05: JPY 4,480.00 per share

- 2023-06: JPY 4,713.00 per share

- 2023-07: JPY 4,752.00 per share

- 2023-08: JPY 4,355.00 per share

- 2023-09: JPY 4,400.00 per share

- 2023-10: JPY 4,350.00 per share

- 2023-11: JPY 3,985.00 per share

- 2023-12: JPY 3,618.00 per share

- 2024-01: JPY 3,932.00 per share

- 2024-02: JPY 4,148.00 per share

- 2024-03: JPY 4,184.00 per share

- 2024-04: JPY 4,269.00 per share

- 2024-05: JPY 4,158.00 per share

- 2024-06: JPY 4,053.00 per share

- 2024-07: JPY 4,003.00 per share

- 2024-08: JPY 4,477.00 per share

- 2024-09: JPY 4,407.00 per share

- 2024-10: JPY 4,734.00 per share

- 2024-11: JPY 3,824.00 per share

- 2024-12: JPY 3,812.00 per share

- 2025-01: JPY 3,605.00 per share

- 2025-02: JPY 3,105.00 per share

- 2025-03: JPY 3,290.00 per share

- 2025-04: JPY 2,974.00 per share

- 2025-05: JPY 3,122.00 per share

- 2025-06: JPY 3,196.00 per share

- 2025-07: JPY 2,988.50 per share

- 2025-08: JPY 2,924.00 per share

- 2025-09: JPY 3,238.00 per share

- 2025-10: JPY 3,044.00 per share

- 2025-11: JPY 3,545.00 per share

- 2025-12: JPY 3,324.00 per share

- 2026-01: JPY 2,992.50 per share

- 2026-02: JPY 2,925.50 per share

- 2026-03: JPY 2,699.00 per share

- 2026-04: JPY 2,986.00 per share

- 2026-05: JPY 3,006.00 per share

- 2026-06: JPY 3,097.00 per share

- 2026-07: JPY 3,545.00 per share

- 2026-08: JPY 3,704.00 per share

- 2026-09: JPY 3,563.00 per share

- 2026-10: JPY 3,635.00 per share

## Annual estimated value (JPY per share)

- FY2017: low JPY 5,601.36 per share, central JPY 6,233.60 per share, high JPY 7,075.24 per share

- FY2018: low JPY 6,322.88 per share, central JPY 7,000.84 per share, high JPY 7,903.33 per share

- FY2019: low JPY 6,393.34 per share, central JPY 7,081.93 per share, high JPY 7,998.59 per share

- FY2020: low JPY 6,052.57 per share, central JPY 6,634.48 per share, high JPY 7,409.12 per share

- FY2021: low JPY 7,406.45 per share, central JPY 8,080.54 per share, high JPY 8,977.89 per share

- FY2022: low JPY 5,412.52 per share, central JPY 5,860.98 per share, high JPY 6,457.97 per share

- FY2023: low JPY 1,492.37 per share, central JPY 1,508.02 per share, high JPY 1,528.86 per share

- FY2024: low JPY 1,438.11 per share, central JPY 1,455.22 per share, high JPY 1,478.00 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original EDINET filing](https://disclosure2dl.edinet-fsa.go.jp/searchdocument/pdf/S100XS0O.pdf); period 2025-12-31, filed 2026-03-26.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.