As a method for individual investors to learn stock analysis, this article introduces the 3-step process of decomposition, comparison and scoring presented by 3DIP, along with an example applying it to break down the profit structure of SQUARE ENIX HOLDINGS.
The analysis of SQUARE ENIX HOLDINGS presented by 3DIP centers on a 3-step method of decomposing, comparing and scoring a company’s underlying condition, and explains how individual investors can apply it to the analysis of other stocks.
The material examines the decline in operating profit by separating it into a decline in revenue and a decline in profit margins. It states that revenue fell by an annual average of 4% over the 3 years from the fiscal year ended March 2022 to the fiscal year ended March 2025, while ROE declined 12 percentage points from 19% to 7%.
The segment analysis identifies weak sales in the HD Games and SD Games businesses as causes of the decline in profit margins. The issues are described as “weak sales in the HD business,” “weak sales in the SD business” and “a lack of synergies with non-game businesses,” and each issue is examined through a scoring process.
The overall process breaks major changes down into smaller questions and presents a reproducible analytical approach that can serve as a reference for individual investors analyzing other stocks.