CyberAgent Earnings: Game Segment Stabilizing With New Mobile Game Hit; Maintain FVE of JPY 1,200

CyberAgent’s June quarter revenue and operating income of JPY 190 billion and JPY 8.6 billion exceeded expectations, mainly driven by the game segment. Based on the solid results, management raised its revenue and operating income guidance for fiscal 2024 (ending September 2024) to JPY 790 billion and JPY 41 billion, respectively, from JPY 750 billion and JPY 30 billion. We believe the new guidance is still conservative and, therefore, raise our forecasts to JPY 799 billion and JPY 44 billion, respectively. Meanwhile, we keep our fair value estimate of JPY 1,200 as we broadly maintain our medium-term forecasts. We think shares are attractive at current levels, as we remain confident in the longevity of CyberAgent’s game titles and think profitability will continue to stabilize.