NSD (TSE:9759) Sales Momentum Keeps Valuation In Focus

NSD (TSE:9759) drew attention after reporting preliminary unaudited consolidated net sales of ¥10,585 million for July 2026 and ¥40,515 million year to date, compared with ¥9,498 million and ¥36,797 million a year earlier.

See our latest analysis for NSD.

The sales update comes as NSD’s share price has gained 9.0% over the past 90 days but remains down 16.67% year to date, while the 5 year total shareholder return of 70.69% points to a stronger long run record.

If this kind of momentum catches your eye, it can be useful to see what else is moving and uncover 11 top founder-led companies

Recent sales figures and the share price pullback have investors split between a recovery story and a value trap. The next step is to weigh NSD’s current valuation against the evidence on each side.

Preferred P/E of 16.1x: Is it justified?

On simple valuation metrics, NSD looks inexpensive compared to both peers and the broader JP IT industry. The stock trades on a P/E of 16.1x, which sits below the peer average of 23.6x and slightly under the JP IT industry average of 16.8x.

The P/E ratio compares the current share price with earnings per share. For an IT solutions company like NSD, it is a quick way to see how much investors are paying for each unit of current earnings, especially when earnings have a track record of growth.

NSD has earnings growth of 12.2% over the past year, which is broadly in line with its 5 year average and a little ahead of the IT industry figure of 12%. Against that backdrop, a P/E below both peers and an estimated fair P/E of 18.6x suggests the market valuation could shift toward that higher level if current trends hold.

Compared with the industry average P/E of 16.8x, NSD trades at a modest discount while still showing annual revenue growth of 6.7% and earnings that are forecast to keep growing, albeit at a single digit rate. The fair P/E estimate of 18.6x adds another reference point that sits meaningfully above the current 16.1x multiple.

Explore the SWS fair ratio for NSD

Result: Price-to-earnings of 16.1x (UNDERVALUED)

However, NSD still faces risks if IT spending softens or key industry clients delay projects, and any earnings disappointment could quickly challenge the current P/E gap.

Find out about the key risks to this NSD narrative.

Another view on NSD using our DCF model

The first look at NSD used the current P/E of 16.1x and suggested the stock could be inexpensive. Our DCF model points in a similar direction. It indicates a fair value of ¥3,561.09 per share versus the current price of ¥2,834, which implies NSD is undervalued.

That gap gives investors a different way to think about potential upside and downside. The question is which signal you may rely on more when earnings or sentiment shift next: the simpler earnings multiple or the cash flow based DCF output.

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 NSD 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 24 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 sentiment on NSD finely balanced between value opportunity and risk, it makes sense to look through the data yourself and move quickly while the picture is fresh. To see which positives are standing out in the numbers and decide how they fit your own thesis, take a closer look at the 5 key rewards.

Looking for more investment ideas beyond NSD?

If you like what you see with NSD, do not stop there. Use the screener to widen your options and spot opportunities others might overlook.

• Target resilient income by checking out companies in the 33 dividend fortresses that may suit a yield focused approach.
• Hunt for potential mispricing opportunities through the 24 high quality undervalued stocks that match your quality and valuation preferences.
• Prioritise capital protection and steadier returns by reviewing the 60 resilient stocks with low risk scores before market sentiment shifts again.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com