NTT (TSE:9432) First Quarter Strength Keeps Valuation Questions In Play
NTT (TSE:9432) has drawn fresh attention after reporting first quarter results for the period ended June 30, 2026, with sales of ¥3,617,707 million and net income of ¥274,830 million.
See our latest analysis for NTT.
The latest first quarter update and NTT's presence at the OCP APAC Summit in August appear to sit alongside a clear shift in sentiment. The 30 day share price return of 8.47% and 90 day share price return of 7.18% contrast with a more measured 1 year total shareholder return of 3.23% and 5 year total shareholder return of 67.98%.
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NTT now trades slightly below the average analyst price target, even after the recent share price move. Is that simply the market remaining cautious, or does it point to a broader disconnect in valuation?
Most Popular Narrative: 3.8% Undervalued
NTT's most followed narrative sets a fair value of ¥169.21 per share, compared with the latest close of ¥162.70. This frames the current discount as relatively modest rather than dramatic.
NTT's investment in proprietary technologies (e.g., IOWN, advanced LLMs like tsuzumi 2, and photonics) is described as positioning it to benefit from surging connectivity and low-latency compute requirements driven by the global rollout of 5G/6G and edge computing. These developments are cited as underpinning sustainable earnings growth and an expanded addressable market for high-value services, which in turn is presented as supporting potential future margin and EBIT expansion.
Want to see what bridges that fair value and today's share price? The narrative leans heavily on steady revenue expansion, tight margins and a higher future earnings multiple. Curious which assumptions really carry the model?
Result: Fair Value of ¥169.21 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, you also need to weigh the ongoing pressure on legacy and mobile revenues, as well as the heavy data center and network investment that could constrain NTT's future cash flexibility.
Find out about the key risks to this NTT narrative.
Another View On NTT: DCF Points In The Other Direction
The narrative points to a modest 3.8% undervaluation, yet the Simply Wall St DCF model paints a different picture. At ¥162.70, NTT sits above an estimated future cash flow value of ¥136.56. This implies the shares screen as overvalued on this framework. Which set of assumptions feels more realistic to you?
To see how this cash flow view is built and what would need to change for the conclusion to shift, 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 NTT 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 26 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
With NTT caught between cautious and optimistic views, this is a good time to look through the figures yourself and decide where you stand. To weigh both sides in one place, take a close look at the 3 key rewards and 2 important warning signs.
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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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