Anritsu (TSE:6754): Assessing Valuation After a 63% One-Year Share Price Surge

Why Anritsu Stock Is On Investors' Radar

Anritsu (TSE:6754) has quietly pulled ahead of the broader market over the past year, with the share price climbing roughly 63% while fundamentals in its test and measurement business continue to trend in the right direction.

See our latest analysis for Anritsu.

After a strong run that has delivered a 1 year total shareholder return of about 63 percent, the recent 16 percent 90 day share price return suggests momentum is still building rather than cooling off, even as the stock consolidates around ¥2,244.5.

If Anritsu’s move has caught your attention, this could be a good moment to see what else is gathering steam across high growth tech and AI stocks.

With shares up strongly yet still trading at a notable discount to some intrinsic value estimates, investors face a key question: is Anritsu a rare undervalued growth story, or has the market already priced in its next leg higher?

Price-to-Earnings of 26.5x: Is it justified?

Anritsu currently trades on a price-to-earnings ratio of 26.5 times, which leaves the stock looking expensive versus both peers and its last close of ¥2,244.5.

The price-to-earnings multiple compares what investors pay today with the company’s current earnings. This can be a particularly important lens for a profitable test and measurement specialist like Anritsu where visibility on earnings is improving.

Here, the market is assigning a materially richer multiple than both the estimated fair price-to-earnings ratio of 19.6 times and typical sector levels. This implies investors are willing to pay up for Anritsu’s recent earnings acceleration and forecast double digit profit growth. If sentiment cools, that gap to the fair ratio is a level valuations could drift back towards.

Compared with the broader Japanese electronic industry average of 15 times earnings and a peer average of 19 times, Anritsu’s 26.5 times valuation stands out as notably higher. This signals a substantial premium that assumes the company can keep outperforming both the market and its direct competitors.

Explore the SWS fair ratio for Anritsu

Result: Price-to-Earnings of 26.5x (OVERVALUED)

However, risks remain, including a recent pullback from highs, a premium valuation versus targets, and potential disappointment if anticipated growth in test demand slows.

Find out about the key risks to this Anritsu narrative.

Another View: Our DCF Model Sees Upside

While the 26.5 times earnings multiple looks stretched, our DCF model paints a different picture, suggesting fair value around ¥2,917.5 versus today’s ¥2,244.5. Trading roughly 23 percent below that mark, is the market underestimating Anritsu’s improving earnings story?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Anritsu for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 875 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Anritsu Narrative

If you see the story differently or simply want to dig into the numbers yourself, you can craft a custom view in minutes, Do it your way.

A great starting point for your Anritsu research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Do not stop your research with Anritsu alone. Use the Simply Wall Street Screener to uncover fresh, data backed opportunities that other investors may be overlooking.

• Consider misunderstood bargains by reviewing these 875 undervalued stocks based on cash flows where strong cash flow analysis suggests the market may be pricing them cautiously.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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